In LabMD, Inc. v. Federal Trade Commission, Case No.
16-16270 (decided June 6, 2018) the United States Court of Appeals
for the Eleventh Circuit addressed the enforcement of an FTC order
finding that a business's allegedly inadequate data security
practices were unfair trade practices under Section 5(a) of the
Federal Trade Commission Act.
LabMD operated a medical laboratory that conducted diagnostic
testing for cancer. Contrary to LabMD policy, an employee installed
on a company computer a file-sharing application. That application
allowed an outside party to download a file that contained the
personal information of thousands of customers.
The FTC initiated an administrative case against LabMD alleging
that it had committed an unfair act or practice prohibited by
Section 5(a) of the Federal Trade Commission Act. The FTC alleged
that LabMD had committed an unfair act or practice by failing to
provide reasonable and appropriate security for personal
information on
