FTC Says Outsourcing Data Security No Shield From Liability

Law360, Washington (October 22, 2015, 3:02 PM EDT) -- Federal Trade Commissioner Terrell McSweeny said Thursday that companies that farm out their data security practices to third parties can still find themselves on the wrong end of an FTC enforcement action when that vendor performs poorly and risks consumer information.

If a company’s hired gun for data monitoring fails to live up to its promises, or its Internet Service Provider stores consumer data in vulnerable places, the agency in many cases will find the primary businesses at fault, McSweeny said in what is sure to come as unwelcome news for those in the private sector who feel the FTC’s data...

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