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Keeping an Eye on the Federal Trade Commission's View on Data Security Breaches by Companies

By Todd C. Taylor and Karin M. McGinnis

Editor's Note: In recent weeks, the entertainment industry has been rattled by the hacking and public release beginning in November of a massive amount of internal documents and e-mails from Sony Pictures Entertainment. By mid-December, the incident had already generated several class action lawsuits in California by current and former Sony employees and production associates who allege negligence and violation of state statutes. But the frequent hacking of consumer information is a liability issue that entertainment companies, from ticketing entities to content sellers, must be prepared for, too.

The following article examines a case in which the Federal Trade Commission (FTC) has sued the Wyndham hotel chain by alleging that the breach of the resort company's customers' credit card account numbers was an unfair trade practice. This article also discusses an earlier data-breach action by the FTC against the former Tower Records.

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