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10 Lessons from FTC Guidance on Data Security

By Marc S. Roth
April 01, 2016

“Not if, but when.” These simple words are enough to keep privacy officers, corporate counsel, compliance officers and IT managers up at night when faced with the reality that their network will at some point be breached. This is no surprise given the spate of corporate breaches and unauthorized network intrusions reported in recent years, as well as the costs, reputational harm and investigations and lawsuits that follow in their wake. While there are no silver bullets to stop breaches from occurring, understanding and following legal actions brought by regulatory agencies and heeding security guidance they issue can go a long way in preventing security lapses and unauthorized attacks.

There is no omnibus federal law that prescribes the level of security that companies must use to protect consumer information. Instead, Congress has identified certain categories of sensitive data that warrant regulation, such as health and financial information, and online information collected from children under 13, resulting in the Health Information Portability and Accountability Act (HIPAA), the Gramm-Leach-Bliley Act (GLB Act), the Fair Credit Reporting Act (FRCA), and the Children's Online Privacy Protection Act (COPPA), respectively.

Each of the above laws (and their implementing regulations) to some extent dictate specific data security standards for companies that possess consumer information in these industries. But for the vast number of companies that do not fall within these categories, knowing what standards they are expected to employ to protect consumer information remains an elusive task. Notwithstanding this void, companies that fail to develop a comprehensive data security plan and implement at least some level of minimum security measures to protect consumer information remain vulnerable to attacks, lawsuits and regulatory investigations.

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