New Jersey Federal Court Upholds The FTC’s Authority To Regulate Data Security

On April 7, a highly anticipated opinion was issued by New Jersey District Court Judge Esther Salas in a case that will likely have broad implications in the realms of privacy and data security. The case in question is FTC v. Wyndham Worldwide Corp. et al., where the defendant has raised fundamental challenges to the Federal Trade Commission (FTC)'s power to regulate data security under the FTC Act. Through a motion to dismiss, Wyndham argued that the FTC had no authority to assert a claim in the data security context, that the FTC must first formally promulgate data security regulations before bringing such a claim, and that the FTC's pleadings of consumer harm were insufficient to support their claims. The Wyndham court sided with the FTC on all of these arguments, and dismissed Wyndham's motion to dismiss.