FTC's Data Security Authority Limited In LabMD Ruling

Law360, New York (November 17, 2015, 10:58 PM EST) -- In tossing the Federal Trade Commission's data security suit against LabMD, an administrative law judge set a high bar for the agency to prove consumer harm similar to the one that has consistently plagued plaintiffs in private litigation over data breaches, attorneys say.

Chief Administrative Law Judge D. Michael Chappell brought to a close a lengthy administrative proceeding by releasing a highly anticipated initial decision late Friday. The decision rejected the commission's argument that LabMD Inc.'s purported failure to institute reasonable and appropriate data security standards constituted an unfair trade practice under Section 5 of the FTC Act because the conduct...

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