FTC and Wyndham to Mediate Dispute Over FTC Data-Security Authority

Meena Harris writes:

Earlier this week, U.S. District Court Judge Esther Salas directed the Federal Trade Commission (“FTC”) and Wyndham Hotels and Resorts to seek mediation to resolve their landmark dispute over whether the FTC has the authority to regulate companies’ data-security practices. As we’ve previously reported, the FTC alleged that Wyndham violated Section 5 of the FTC Act’s prohibition against “unfair practices” by failing to provide “reasonable” security for the personal information of its customers. Although the FTC has settled complaints relying on this broad interpretation of its unfairness authority, this case was closely watched because it was the first time a court had the opportunity to weigh in on the scope of that authority in the privacy and data-security context.

Read more on Covington & Burling InsidePrivacy.

If you’re as confused as I was reading that, Harris helpfully explains that “while the order for mediation stays the proceedings in district court, the legal question at issue remains pending before the circuit court.”

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