Alan Friel Says LabMD Ruling "Does Not Change Basic Tenents" of Section 5 Data Protection Obligations

News / August 2, 2016

Partner Alan Friel is quoted in an article published on Bloomberg BNA’s Privacy and Data Security webpage. The article, “FTC Reasserts Data Security Authority in LabMD Ruling,” discusses how the Federal Trade Commission (FTC) recently issued an Opinion and Final Order reversing an Administrative Law Judge (ALJ) Initial Decision that had dismissed FTC charges against medical testing laboratory LabMD, Inc. In reversing the ALJ ruling, the Commission relied on expert testimony regarding the likelihood of material consumer injury from medical identity theft to conclude that LabMD’s data security practices were unreasonable and constitute an unfair act or practice that violated Section 5 of the Federal Trade Commission Act.  Friel told the publication that the LabMD case has to be looked at it the proper context.  Here, the Commission found that facts established “both highly sensitive data, which created a higher standard of care, and the ‘lack of basic protections' to protect the data.”  He added that the opinion does, however, provide “helpful insight into the FTC's expectation as to data security….” 

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