FTC Blogs Help Define Reasonable Data Security, Attorneys Say

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By Jimmy H. Koo

The FTC’s weekly data security investigation blogs provide important tips and information for companies regarding the regulator’s views on what constitute best practices, privacy attorneys told Bloomberg BNA.

There is no data security compliance silver bullet revealed in the blogs, but the Federal Trade Commission posts offer more framing for companies seeking to meet the commission’s requirement that they employ reasonable data security to protect consumer data.

Companies under the FTC’s jurisdiction—from internet giants Amazon.com Inc. and Facebook Inc. to smaller businesses, such as now-defunct medical testing laboratory LabMD Inc.—have struggled with what level of data security they must provide to convince the nation’s main data security and privacy enforcement agency that their efforts to protect personal data are reasonable. Although the FTC makes public its administrative and federal court resolutions of formal data security enforcement actions, the process of investigations that are resolved short of such an action have been largely opaque.

The FTC announced July 21 that it will publish a blog every Friday on lessons learned from data security investigations by using hypothetical examples and highlighting some common themes that have emerged from closed data security investigations. Sharing information on the nonpublic resolutions process may help companies, and their legal counsel, better understand what the FTC expects from companies held to a “reasonable data security” standard.

Kurt Wimmer, Washington-based partner and chair of Covington & Burling LLP’s data privacy and cybersecurity practice, told Bloomberg BNA that the FTC’s Stick With Security” blog is “serving a highly useful role.” Wimmer said he doesn’t see the blog posts “forging any new ground,” but said the initiative is “taking many of the key principles from the ‘ Start with Security’ program and the FTC’s consent orders and rolling them out in a very accessible and understandable format, which is a real service.”

Craig A. Newman, a partner with Patterson Belknap Webb & Tyler LLP in New York and chair of the firm’s privacy and data security practice, told Bloomberg BNA that, “it’s always helpful to get a window into the Commission’s regulatory expectations.”

Elizabeth E. McGinn, privacy and cybersecurity partner at Buckley Sandler LLP in Washington, told Bloomberg BNA that the “blogs provide great insight as to what the FTC believes is reasonable data security.”

Common Sense

Katherine E. Armstrong, counsel at Drinker Biddle & Reath LLP in Washington, told Bloomberg BNA that there is “no one-and-done or one-size-fits-all solution in the world of data security because a robust data security program is always ongoing.”

McGinn said companies should understand that data security is an “evolving landscape.”

In the blogs, the FTC has so far addressed:

Much of the FTC’s tips are fundamental cybersecurity best practices but, according to Armstrong, who spent more than 30 years at the FTC working on consumer protection enforcement, “for some entities, the information contained in these blog posts could be new and helpful.”

Newman agreed, saying that “while much of the information discussed in the blog is rather general, a number of the posts have discussed issues important to organizations regardless of size or sector.”

Janis C. Kestenbaum, a commercial litigation partner in the privacy and security practice at Perkins Coie LLP in Washington, told Bloomberg BNA that the FTC’s blog posts “reinforce what the agency considers good data security practices, and help to flesh out some of the agency’s prior guidance.”

Brittany M. Bacon, privacy associate at Hunton & Williams LLP in New York, told Bloomberg BNA that the blog is a “useful resource” for all companies, but particularly for small- and medium-sized businesses.

The FTC’s tips and recommendations may be considered “basic by some, but they’re a good reminder for companies,” McGinn said. “What may be considered as basic for some companies are not for other companies,” she said. Bacon said the tips aren’t particularly new but the blogs “provide information in a usable and practical form that is beneficial to companies trying to develop information security programs and enhance compliance.”

According to Kestenbaum, “the line between what will be deemed ‘reasonable’ versus ‘unreasonable’ security is not always apparent, even to sophisticated businesses.” She said that “any additional guidance is helpful for businesses of any size, not just small businesses.”

Even some of the general guidance “is helpful especially for smaller organizations without teams of information technology security professionals and lawyers,” Newman said.

“Anything that keeps these commonsense best practices top of mind contributes to a safer cybersecurity ecosystem,” Wimmer said.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

For More Information

Full texts of the FTC's blogs are available at http://src.bna.com/rXf.

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