The Third Circuit released its decision in FTC v. Wyndham Worldwide Corp. earlier today, affirming the district court’s decision that the FTC has the authority to regulate companies’ data security practices under the “unfair practices” prong of Section 5 of the FTC Act.  The highly anticipated precedential opinion dismissed Wyndham’s arguments that the FTC lacks the authority to regulate cybersecurity practices, finding instead that neither Congressional legislation nor the FTC’s prior statements contradicted the FTC’s attempts to assert its cybersecurity powers.  The court also held that Wyndham received fair notice of the potential application of the unfairness standard under Section 5 to data security practices, rejecting Wyndham’s argument that it should receive notice of which specific cybersecurity practices are required to satisfy the Section 5 standard.  Finally, the court held that the FTC sufficiently alleged a “substantial injury” to consumers, as required under Section 5’s unfairness prong.  An analysis of the highlights of the Third Circuit’s opinion is available after the jump.
Continue Reading Third Circuit Upholds FTC’s Data Security Authority in FTC v. Wyndham