FTC Makes Final Ruling in LabMD Case

On September 29, the Federal Trade Commission denied a request for a stay of final order by medical testing laboratory LabMD, pending review by an appeals court. This makes final their decision earlier this year, that sought to hold the company liable for failing to protect its customers’ personal data.

The FTC stated in its case summary:

The case is part of an ongoing effort by the Commission to ensure that companies take reasonable and appropriate measures to protect consumers’ personal data.

In July, the FTC found LabMD liable in two separate instances. The FTC claims that information on 9,300 individuals was found on a file-sharing network. Additionally, identity thieves had access to over 500 customers’ sensitive information. In its ruling, the FTC required LabMD establish a comprehensive information security program and acquire independent audits to ensure data security.

The 2015 ruling against Wyndham Hotels by the Third Circuit Court of Appeals in Philadelphia declared a broad standard for enforcement of data protection. According to the courts, the FTC is able to regulate companies that put users’ information at risk. The FTC sued the hotel company in 2012, blaming it for three data breaches that threatened hundreds of thousands of consumers and caused $10 million in fraudulent charges.

In that case, the FTC alleged that Wyndham’s policies “unreasonably and unnecessarily exposed consumers’ personal data to unauthorized access and theft.”

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Ashton DeLano is a junior at the George Washington University pursuing a Bachelor of Science in Economics with minors in Business Administration and Computer Science. He intends to cover developments in the health and energy sectors and the impact of new technologies on the consumer.

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