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The Federal Trade Commission (FTC) continues to put emphasis on the importance of corporate board involvement in privacy and data security.
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Corporate Boards: Don’t Underestimate Your Role in Data Security Oversight
The Federal Trade Commission (FTC) continues to put emphasis on the importance of corporate board involvement in privacy and data security. It states, “[I]t’s essential for corporate boards to do what they can to ensure that consumer and employee data is protected.” The FTC’s recent statement includes five recommendations for corporate boards: (1) make data security a priority, (2) understand the cybersecurity risks and challenges your company faces, (3) don’t confuse legal compliance with security, (4) it’s more than just prevention – take reasonable precautions, and (5) learn from mistakes.
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On April 22, 2021, the Supreme Court limited the Federal Trade Commission’s ability to seek restitution or disgorgement under Section 13(b) of the FTC Act. Justice Stephen G. Breyer, author of the unanimous 9-0 decision, interpreted the language and history of the statute to find that the FTC’s ability to obtain equitable monetary remedies under the statute would allow “a small statutory tail to wag a very large dog.”
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Background and Procedural History
Section 13(b) of the Federal Trade Commission Act (the “Act”) authorizes the FTC to seek “a permanent injunction” in federal court against “any person, partnership, or corporation” believed to be “violating, or [which] is about to violate, any provision of law” that the FTC enforces “in proper cases.”
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On 22 April, the Supreme Court dealt a striking blow to the Federal Trade Commission’s (FTC) longstanding reliance on Section 13(b) of the Federal Trade Commission Act (FTC Act) as a basis for obtaining monetary relief for consumers. In a unanimous ruling in AMG Capital Management, LLC v. Federal Trade Commission, the Court held that Section 13(b) does not authorize the FTC to recover monetary remedies such as restitution and disgorgement of profits. Acting FTC Chairwoman Rebecca Kelly Slaughter criticized the decision, noting that Section 13(b) cases have resulted in “$11.2 billion in refunds to consumers during just the past five years.” The FTC has asked Congress to amend Section 13(b) authority in light of the Court’s opinion. In the absence of Congressional intervention, the FTC is likely to increase reliance on a little-used and more burdensome mechanism under Section 19 of the FTC Act to obtain monetary reli
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On April 22, 2021, the Supreme Court issued a unanimous decision
prohibiting the Federal Trade Commission (FTC) from using its
preferred tool for regulating marketplace misconduct. The Court
held that Section 13(b) of the Federal Trade Commission Act (FTCA),
which allows the FTC to seek injunctive relief in federal court,
does not extend to monetary relief in the form of restitution or
disgorgement.
Sections 5 and 19 of the FTCA have long been used by the FTC to
seek monetary damages through administrative proceedings. Section
13(b) gives the FTC the power to seek injunctive relief in federal
Supreme Court Limits FTC Authority To Obtain Disgorgement Or Restitution, Rejecting Decades Of Precedent - Consumer Protection mondaq.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from mondaq.com Daily Mail and Mail on Sunday newspapers.