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FTC Finds Unauthorized Data Disclosure is "Substantial Injury" to Consumers

The Federal Trade Commission unanimously reversed an administrative law judge's dismissal of the FTC's complaint against LabMD, finding that LabMD's poor data security practices are "unfair" under the FTC Act. The Commission concluded that the judge had "applied the wrong legal standard for unfairness." The FTC's opinion explained that "the privacy harm resulting from the unauthorized disclosure of sensitive health or medical information is in and of itself a substantial injury." The FTC's authority to enforce data security standards was upheld last year in FTC v. Wyndham. EPIC filed an amicus brief in Wyndham, defending the FTC's "critical role in safeguarding consumer privacy and promoting stronger security standards."

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