FTC, DOJ Issue Antitrust Policy Statement Encouraging Private Sharing of Cybersecurity Information

by Davis Wright Tremaine LLP
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The Federal Trade Commission and the Department of Justice yesterday issued a joint policy statement on the sharing of cybersecurity information. Declaring that “properly designed cyber threat information sharing is not likely to raise antitrust concerns and can help secure the nation’s networks of information and resources,” the policy statement provides the agencies’ analytical framework for information sharing among private entities, and is aimed at reducing antitrust uncertainty for companies that want to share strategies for preventing and combating cyber-attacks. The statement, however, does not reduce potential liability under privacy laws, such as the Electronic Communications Privacy Act (ECPA), for the disclosure of communications or personal information related to cyber threats. Those laws remain a concern for cybersecurity information sharing efforts.

It is not often that federal antitrust authorities encourage rivals to share information. Indeed, information sharing among competitors often has led to either government prosecutions or private antitrust treble damage actions alleging price fixing and other antitrust conspiracy claims.

The joint Department of Justice/Federal Trade Commission Antitrust Guidelines for Collaborations Among Competitors have long been a principal guide to the agencies’ analytic approach to rivals’ information sharing practices and when DOJ and FTC will view such collaboration as crossing the line. Generally stated, the agencies consider whether information sharing, and any agreement flowing from such practices, is likely to harm competition by increasing the ability or incentive of participants to raise prices above, or reduce output, quality, service or innovation below, the levels that otherwise likely would prevail.

The FTC/DOJ announcement of their new cybersecurity policy observes that “[c]yber threats are increasing in number and sophistication, and sharing information about these threats, such as incident reports, indicators and threat signatures, is something companies can do to protect their information systems and help secure our nation’s infrastructure.” Recognizing that “[p]rivate parties play a critical role in mitigating and responding to cyber threats,” and that the sharing of cyber threat information has the potential to improve the security, availability, integrity and efficiency of the nation’s information systems, the agencies stated that their newly announced policy statement is intended to encourage the sharing of cybersecurity information. The FTC/DOJ action follows President Obama’s issuance last year of an Executive Order intended in part to facilitate increased information sharing among companies within critical infrastructure sectors and between the private sector and the government.

The FTC and DOJ previously have addressed sharing of cyber threat information, as early as October 2000. In that instance, the Department of Justice’s Antitrust Division issued a “business review letter” to Electric Power Research Institute, Inc. in response to the Institute’s request for guidance as to whether DOJ would challenge proposed cybersecurity information sharing under the antitrust laws. In its letter, the Antitrust Division stated that it had no intention of taking enforcement action against the proposal to exchange certain enumerated cybersecurity information, including actual real-time cyber-threat and attack information. DOJ concluded that, as long as the participants’ information exchange was limited to physical and cybersecurity issues, and did not encompass price, purchasing and future product innovation discussions, the proposed information exchange would not be likely to endanger competition or trigger enforcement action. The agencies still adhere to the legal analysis underpinning that advisory letter.

It is important to note, however, that the newly announced policy does not withdraw, or signal any retreat from, the agencies’ reliance on, and enforcement of, their Antitrust Guidelines for Collaborations Among Competitors. Stating that, “[w]ith proper safeguards in place, cyber threat information sharing can occur without posing competitive concerns,” the policy statement emphasizes that “the legitimate sharing of cyber threat information is very different from the sharing of competitively sensitive information such as current or future prices and output or business plans, which may raise antitrust concerns. Cyber threat information is typically technical in nature and covers a limited type of information, and disseminating that information appears unlikely to raise competitive concerns.” (Emphasis added)

Thus, companies or associations intending to engage in cybersecurity information sharing should proceed cautiously, to guard against such dialogues including prohibited exchanges of competitively sensitive information or even the appearance of unlawful collaboration. Cybersecurity information sharing practices should be framed to comply with the new FTC/DOJ policy statement, and in appropriate instances, participants in such exchanges may even wish to seek further guidance from the agencies pursuant to the business review letter procedure.

Companies engaging in cybersecurity information sharing also must proceed cautiously with respect to any possible disclosure of personal information, including the contents of communications, as the FTC/DOJ joint statement does not address, or create any safe-harbor from, existing restraints under privacy laws. For example, ECPA generally prohibits communications service providers from disclosing the content of communications, with no express exception for disclosure of communications relevant to potential cybersecurity threats. Privacy concerns over the sharing of threat information have contributed to Congress’ inability to pass the Cyber Intelligence Sharing and Protection Act (CISPA), which would have allowed voluntary sharing of cyber threat information between private companies and the government and created a safe harbor for companies that shared such information. Entities should keep existing privacy limitations in mind if they decide to engage in the sharing of cyber threat information as a result of the FTC/DOJ joint policy statement.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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