A Year in Review: FTC Data Privacy Actions and its Impacts on 2017 and Beyond

24 01 2018

Stephen R. Chuk

Proskauer Law

August 18, 2017

Whether it means taking a prominent role shaping data security for the Internet of Things, or addressing high profile breaches, the FTC has adopted an active position in policing data privacy and security. And, as data becomes increasingly digital in its form and protections, data security is of paramount importance for all types of intelligence—whether financial, medical, or otherwise sensitive.  The Commission’s emphasis on these areas has not slowed, even as the composition of the Bureau of Consumer Protection changes under a new administration.  The FTC’s actions over the past year reflect that Commission’s continued emphasis on data privacy and its recent data privacy settlements have provided companies with a trail of breadcrumbs from which they can extract lessons learned and help avoid potential FTC scrutiny.


The Commission has not adopted a particular “test” for whether they should bring an action. However, they have previously abided by a general standard that its data privacy enforcement actions were part of “an ongoing effort … to ensure that companies take reasonable and appropriate measures to protect consumers’ personal data.” Though the FTC’s litmus test may seem opaque, its focus has centered on two scenarios representing threats to private data: (1) when a company deceives consumers either through false representations of data security or misappropriations of private data; or (2) when a company fails to properly protect the data from hacking, and risks (or suffers) a breach. [1]

The FTC has taken a preventative approach to policing deceptive statements about privacy, in which companies’ advertising presents a false front about the level of security of consumer data. Over the past year, the Commission reached settlements with three different companies—Practice Fusion, Very Incognito Technologies, and Turn, Inc.—in various actions in which the Commission alleged the companies made misrepresentations about data privacy.


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