On Wednesday, the U.S. Court of Appeals for the 11th Circuit issued its long-awaited decision in LabMD’s challenge to an FTC enforcement action: LabMD, Inc. v. Federal Trade Commission (11th Cir. June 6, 2018). While there is some concern that the opinion will undermine the FTC’s power to enforce Section 5 for privacy and security issues, the opinion actually is quite narrow and is far from crippling.
While the LabMD opinion likely does have important implications for how the FTC will go about enforcing reasonable data security requirements, we think the opinion still allows the FTC to continue to build upon a coherent body of privacy and security complaints in an incremental way similar to how the common law develops. See Solove and Hartzog, The FTC and the New Common Law of Privacy, 114 Columbia Law Review 584 (2014).
The Federal Trade Commission is the most important federal agency regulating privacy and security. Its actions and guidance play a significant role in setting the privacy agenda for the entire country. With the Trump Administration about to take control, and three of the five Commissioner seats open, including the Chairperson, a lot could change at the FTC. But dramatic change is not common at the agency. What will likely happen with the FTC’s privacy and security enforcement over the next four years?
The Federal Trade Commission (FTC) has become the leading federal agency to regulate privacy and data security. The scope of its power is vast – it covers the majority of commercial activity – and it has been enforcing these issues for decades. An FTC civil investigative demand (CID) will send shivers down the spine of even the largest of companies, as the FTC requires a 20-year period of assessments to settle the score.Continue Reading
The article addresses the scope of FTC authority in the areas of privacy and data security (which together we refer to as “data protection”). We argue that the FTC not only has the authority to regulate data protection to the extent it has been doing, but that its granted jurisdiction can expand its reach much more. Normatively, we argue that the FTC’s current scope of data protection authority is essential to the United States data protection regime and should be fully embraced to respond to the privacy harms unaddressed by existing remedies available in tort or contract, or by various statutes. In contrast to the legal theories underlying these other claims of action, the FTC can regulate with a much different and more flexible understanding of harm than one focused on monetary or physical injury.
We contend that the FTC can and should push the development of norms a little more (though not in an extreme or aggressive way). We discuss why the FTC should act with greater transparency and more nuanced sanctioning and auditing.
The article was part of a great symposium organized by the George Washington University Law Review: The FTC at 100.
Here is a table of contents of the issue, along with links to where you can access each essay and article.