Privacy & Cybersecurity Update - August 2015

Third Circuit Affirms FTC’s Authority Over Cybersecurity:

In the Wyndham case, the Third Circuit affirmed that the FTC has the authority to regulate cybersecurity under Section 5 of the FTC Act, and that the language of the act itself constituted fair notice to Wyndham that its practices may be unlawful.

In a highly anticipated ruling, the U.S. Court of Appeals for the Third Circuit has ruled unanimously that the Federal Trade Commission (FTC) has the authority to bring actions against companies alleging that cybersecurity activities constitute unfair trade practices under Section 5 of the FTC Act.1 The August 24, 2015, ruling upheld the decision of the U.S. District Court for the District of New Jersey on two questions, namely: (i) whether the FTC has authority to regulate cybersecurity under Section 5 of the FTC Act, and (ii) if so, whether Wyndham had fair notice that its cybersecurity practices could violate Section 5. The Third Circuit affirmed the district court’s findings that the FTC does have such authority and that Wyndham did have fair notice...

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