FTC’s ‘Stick with Security’ Series Carries On

by Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

Continuing with its “Stick with Security” series of blog posts for businesses, the Federal Trade Commission worked its way through several more items found in the “Start with Security” guidance.

The FTC launched its initiative in August when it authored its first missive designed to ensure that companies take reasonable steps to protect and secure consumer data. Its advice was based on a review of FTC complaints and orders, litigated cases and settlements, closed enforcement actions, questions submitted by businesses, and hypothetical examples.

Businesses should store sensitive personal information securely and protect it during transmission, the FTC advised in a post, emphasizing the importance of encryption for sensitive data both at rest and in transit. Information should be kept secure throughout its life cycle, the FTC added, and companies should utilize industry-tested and acceptable methods of security and should ensure proper configuration of security measures.

A company may use state-of-the-art encryption technology, for example, but if it stores the encryption keys with the data they encrypt, the effort may be for nothing, the FTC said. Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection, wrote about the importance of “segmenting a network and monitoring who is trying to get in and out. By keeping information in separate compartments—confidential client information in one place and corporate Web site data in another—a company can reduce the risk to the sensitive data.”

Just as a business would monitor who is accessing a brick-and-mortar establishment, so should a company keep an eye on who is coming and going online. Tools that warn companies about access, uploads and downloads can make it easier to catch data thieves and protect consumers in the process, the FTC said.

Because employees work from anywhere in this day and age, 24/7 remote access to the network is often necessary—but businesses must ensure that remote access is secure, the FTC noted.

Before allowing employees to access the network remotely, a business should “set security ground rules, communicate them clearly, and verify that the employee, client, or service provider is in compliance,” the FTC advised. “Furthermore, wise companies take steps to make sure that devices used for remote access have updated software, patches, and other security features designed to protect against evolving threats.”

An example that the FTC frowned on involved an executive search firm that permitted a prospective employer remote access to search its confidential information about job candidates and failed to check whether the employer’s computers had any security measures in place. According to the FTC, “The better approach would be for the search firm to contractually require minimum security standards for employers that want to access the firm’s network remotely and to use automated tools to make sure employers meet the requirements.”

Most recently, the FTC blogged about applying sound security practices from the start, even when developing new products, as the cost-effective approach to innovation. Begin with a culture of security, the FTC suggested, and create a work environment where staff are encouraged at every stage of the process to factor security into product development (and not just lectured about the importance of getting the job done quickly).

Follow platform guidelines for security, verify that security features work—particularly before the company touts the security benefits it provides—and test for common vulnerabilities, the FTC said. Security should be a “dynamic process,” and businesses should remember to monitor the latest threats and developments.

To read the FTC’s “Stick with Security” blog posts, click here.

Why it matters: A few more posts are left in the FTC’s “Stick with Security” series, with the next focused on making sure service providers implement reasonable security measures.

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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