On July 29, 2016, the Federal Trade Commission (FTC) made the latest move in its battle with LabMD, Inc. (LabMD) when it reversed an initial decision by an administrative law judge (ALJ). The FTC determined that LabMD’s data security practices constitute an unfair act or practice within the meaning of Section 5 of the Federal Trade Commission Act. It issued an Opinion and Final Order requiring LabMD to “notify affected consumers, establish a comprehensive information security program reasonably designed to protect the security and confidentiality of the personal consumer information in its possession, and obtain independent assessments regarding its implementation of the program.”
This fight began in 2013 when the FTC first filed a Complaint contending that LabMD failed to reasonably protect data maintained on its computer network. Two alleged security incidents form the basis of the Complaint. In the first incident, Tiversa, trying to solicit LabMD’s business, discovered that a June 2007 insurance aging report containing personal information was available on a peer-to-peer (P2P) file-sharing network and informed LabMD. In the second incident, dozens of day sheets and a small number of Continue reading