Recently, an agreement was reached between the United States Federal Trade Commission and Wyndham Worldwide over allegations of a breach of security regarding personal customer records.
There were allegations that the company had broken federal law over the protection of their customers’ personal records. This agreement settled the situation between these two parties and is seen as a positive step further. It could have a significant effect on e-commerce since it has ended a huge legal challenge to FTC’s authority which was slowly extending over the world of cybersecurity.
According to the settlement terms, Wyndham will no longer be opposing the FTC as it was since four years over their allegations against the company. The Commission had essentially asserted that federal law allowed them to pursue charges against any business entity that was unable to protect their customer records from security breaches.
Beneficial for both sides
Each side had to agree to terms that are beneficial for both parties in the long run. On their part, the FTC consented to retracting their allegation against Wyndham regarding violation of federal law. There was a stipulation that came with this agreement which stated that Wyndham will have to improve their consumer protection program and oversee its effective implementation.
Wyndham will be implementing a comprehensive program for consumer protection and the FTC will have jurisdiction to supervise it. The settlement between these two parties was reached when New Jersey’s U.S District Court and the United States Court of Appeals both backed the FTC’s claim.
It triggered a number of debates between government officials and businessmen. While some agreed that this settlement had ended challenges to FTC’s authority and strengthened its position in the realm of cybersecurity, there were others who argued against it.
No challenges ahead
There were a number of arguments made against FTC’s authority and position as far as cybersecurity is concerned. However, despite everything, one aspect is very clear. The FTC’s authority to enforce cybersecurity laws had been established by the U.S Court of Appeals. Wyndham had to agree to a settlement rather than take any further action, hence reaffirming the Third Circuit’s decision.
Cybersecurity and legal experts both were of the view that the FTC’s position was strong and it was unlikely to face any kind of similar challenge in the near future.
The Commission itself viewed this settlement as a milestone which had ratified its stance legally and supported its position. The chairman of the body also made a statement regarding this which said that the FTC would now be able to protect consumer against security threats and urge companies to take measures against cyber threats as well.
Even Wyndham was happy with the settlement since the company was no longer held accountable for violation of law or liable to pay penalties. The company even upped their standard security measures according to the government’s approval rating. The protection of the consumers was more focused towards credit card information and the entire program of security was in compliance with the FTC’s terms.