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The FTC Act

By L. Elise Dieterich
July 30, 2012

Read the Privacy Policy on the typical company's website, and it is likely to say something like this: “We recognize the importance of protecting the privacy of personally identifiable information [and] we safeguard out customers' personally identifiable information by using industry standard practices. We restrict access to non public personal information about you only to those employees who need to know that information to provide products and services to you. We use commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of your personal information [and] make commercially reasonable efforts to ensure the security of our systems.”

If your company's Privacy Policy contains similar statements, beware: These statements paraphrase the privacy policies of defendants Wyndham Hotels, Franklin Toyota/Scion, and RockYou.com, respectively, as quoted in recent Federal Trade Commission (FTC) complaints, in which the FTC alleged that such statements, if not backed up by adequate data security measures, constitute an “unfair or deceptive act or practice,” in violation of Section 5(a) of the FTC Act, 15 U.S.C. ' 45(a). See Federal Trade Commission, Plaintiff, v. Wyndham Worldwide Corporation; Wyndham Hotel Group, LLC; Wyndham Hotels & Resorts, LLC; and Wyndham Hotel Management, Inc. (U.S. District Court for the District of Arizona) Case No. 2:12-cv-01365-SPL, http://ftc.gov/os/caselist/1023142/120626wyndamhotelscmpt.pdf; In the Matter of Franklin's Budget Car Sales, Inc., also doing business as Franklin Toyota/Scion FTC File No. 102 3094, www.ftc.gov/os/caselist/1023094/120607franklinautomallcmpt.pdf; United States of America (For the Federal Trade Commission) v. RockYou, Inc. (U.S. District Court for the Northern District of California, San Francisco Division) Case No. 3:12-cv-01487-SI, www.ftc.gov/os/caselist/1023120/120327rockyoucmpt.pdf.

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