FTC Lets Taiwanese IoT Company Off the Hook


The Federal Trade Commission agreed to drop its complaint against Taiwan-based connected device maker D-Link Corp., opting to pursue claims against the company’s U.S. subsidiary, D-Link Systems. In January, the FTC sued D-Link Corp. and D-Link Systems, alleging that the companies put U.S. consumer privacy at risk by failing to take reasonable steps to secure their wireless routers and webcams.

The complaint said the company violated Section 5 of the FTC Act by unfairly treating consumers through lax data security and  by misrepresenting to consumers the security of its products. The company immediately denied the allegations. D-Link Systems President William Brown previously told Bloomberg BNA that the security of D-Link’s products and the protection customers’ private data “is always our top priority.”

FTC May 12 told Bloomberg BNA that it had no comments regarding the D-Link case.

Since the FTC first began enforcing privacy and data security, virtually all targeted companies have elected not to challenge the FTC's enforcement authority, instead entering no-fault consent orders. However, there are increasingly more companies, such as D-Link, that are challenging the FTC’s enforcement authority. This doesn’t necessarily mean that the FTC will hold back on its data security enforcement actions, and industry professionals have previously told Bloomberg BNA that the FTC will likely focus on internet of things data privacy and security.  

At a recent Bloomberg Government NEXT Tech event, FTC Commissioner Terrell McSweeny said that she is worried about the lack of security standards for the IoT industry. This creates vulnerable devices, she said. McSweeny noted that it’s important to acknowledge the power and potential of innovation but IoT devices create new level of intimacy that may be exploited.  

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