FTC Loses LabMD Data Security Suit

Law360, New York (November 16, 2015, 5:15 PM EST) -- An administrative law judge on Friday tossed the Federal Trade Commission's closely watched data security suit against LabMD, ruling the commission had failed to show that the laboratory's alleged conduct had caused harm to consumers and dealing a blow to the regulator's active privacy enforcement agenda.

In a long-awaited 92-page initial decision dismissing the action, Chief Administrative Law Judge D. Michael Chappell rejected the commission's argument that LabMD Inc.'s purported failure to institute reasonable data security constituted an unfair trade practice under Section 5 of the FTC Act because the conduct caused or is likely to cause substantial injury to consumers....

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