From: The National Law Review
The Federal Trade Commission (FTC), on July 29, 2016, vacated Chief Administrative Law Judge D. Michael Chappell’s Initial Decision dismissing the FTC’s data security complaint against medical testing company, LabMD, Inc. (“LabMD”). LabMD was the first litigated data security action before the FTC.
Key Takeaways:
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The FTC reverses Administrative Law Judge’s decision and concludes that LabMD’s data security practices constitute an unfair act or practice under Section 5(n) of the Federal Trade Commission Act.
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The Commission held that the privacy harm resulting from the unauthorized disclosure of sensitive health or medical information is in and of itself a substantial injury under Section 5(n) (the FTC’s unfairness authority). The case was decided unanimously with no dissenting statements.
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The Commission’s decision is likely to be appealed to the Court of Appeals.
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This is the first data security action litigated before the Commission and the first appealable Commission opinion in a data security action.
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