Court Says FTC Can Go After Companies Who Get Hacked For Their Weak Security Practices

Almost exactly a decade ago (man, time flies…), we first discussed the question of whether or not it should be against the law to get hacked. The FTC had gone after Tower Records (remember them?) for its weak data security practices. That resulted in a series of questions about where the liability should fall. Many people, quite reasonably, say that there should be incentives for companies to better manage data security and (especially) to protect their users. But, it’s also true that sooner or later, if you’re a target, you’re going to get hacked. Ten years later and this is still an issue. The FTC went after Wyndham hotels for its egregiously bad data security (which made it easy for hackers to get hotel guests’ information, including credit cards), but Wyndham fought back, saying the FTC had no authority over such matters, especially without having first issued specific rules.

However, a court has shot down that argument and will allow the FTC’s case against Wyndham to move forward.

Again, Wyndham’s security here was egregiously bad. It didn’t encrypt payment data, and also used default logins and passwords for its systems. So there’s an argument here that some kind of line can be drawn between purely negligent behavior, such as Wyndham’s (lack of) data security, and companies who actually do follow some rather basic security practices, and yet still fall prey to hacks. What makes things tricky is that pretty large gray area in between the two extremes.

Read the Full Article: Source – Tech Dirt

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