FTC May Use Unfair and Deceptive Trade Practices Authority To Regulate Cybersecurity

Even Where It Has Not Issued Regulations to Set an Acceptable Cyber Security Standard

Since the mid- to late 1990s, the Federal Trade Commission (FTC) has been the leading federal regulator in the field of data privacy and security. It has operated under its general grant of consumer protection authority in the Federal Trade Commission Act (FTCA). The FTCA was enacted in 1914 and obviously was not drafted to address directly Internet-related issues. Privacy lawyers and scholars alike have been wrestling with the question of whether the FTC really has a legislative grant of authority to regulate cybersecurity. But until the FTC sued the hotel chain Wyndham Worldwide, companies that received FTC complaints settled prior to the issue of FTC's authority being litigated. The somewhat abstruse issue of the FTC's authority was never given its day in court—until FTC v. Wyndham.