Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Keeping an Eye on the Federal Trade Commission's View on Data Security Breaches by Companies

By Todd C. Taylor and Karin M. McGinnis
December 31, 2014

Editor's Note: In recent weeks, the entertainment industry has been rattled by the hacking and public release beginning in November of a massive amount of internal documents and e-mails from Sony Pictures Entertainment. By mid-December, the incident had already generated several class action lawsuits in California by current and former Sony employees and production associates who allege negligence and violation of state statutes. But the frequent hacking of consumer information is a liability issue that entertainment companies, from ticketing entities to content sellers, must be prepared for, too.

The following article examines a case in which the Federal Trade Commission (FTC) has sued the Wyndham hotel chain by alleging that the breach of the resort company's customers' credit card account numbers was an unfair trade practice. This article also discusses an earlier data-breach action by the FTC against the former Tower Records.

In April 2014, Judge Esther Salas of the U.S. District Court for the District of New Jersey decided that that the Federal Trade Commission could pursue a claim that a hotel company's failure to have adequate data security measures is an unfair trade practice. Federal Trade Commission v. Wyndham Worldwide Corp., 10 F.Supp. 3d 602 (D.N.J. 2014). In its recent brief addressing Wyndham's appeal to the U.S. Court of Appeals for the Third Circuit, the FTC has made clear that it is not backing down. The agency believes that data security is a basic responsibility of any company that accepts consumer personal information, and that savvy companies should heed Wyndham's lessons.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.