InfoBytes Blog
FTC Settles Privacy, Data Security Charges Based On Peer-to-Peer File Sharing Against Two Firms
On June 7, the FTC announced two new cases (and simultaneous settlements), one against a debt collector and the other against an auto dealer, alleging privacy and data violations based on the use of peer-to-peer file sharing software. In both cases, the FTC claims that the firms allowed file-sharing software to be installed on company computers, thereby allowing files containing personal customer information to be accessed by any other person using a networked computer. Both companies, according to the FTC, (i) did not have adequate security plans, (ii) did not use reasonable measures to enforce compliance with existing security policies, (iii) did not adequately train employees, (iv) did not use reasonable methods to prevent, detect and investigate unauthorized access to personal information on its networks, and (v) failed to assess risk to consumers. For the debt collector, the FTC alleges that the failures constituted an unfair act or practice in violation of the FTC Act. The FTC claims that the auto dealer also violated the FTC Act and, for the first time, charges an auto dealer with violations of certain Gramm-Leach-Bliley (GLB) Act rules. The settlement orders with both companies bar misrepresentations regarding the privacy, security, confidentiality, and integrity of any personal information and require that the firms establish comprehensive information security programs that will be audited every other year for 20 years. The auto dealer also is barred from violating the GLB rules at issue.