Target could face federal charges for failing to protect its customers’ data from hackers.
The retailer has been in contact with the Federal Trade Commission, Molly Snyder, a Target spokeswoman, told National Journal.
It’s unclear whether the FTC has issued any subpoenas or other formal demands for information. The FTC declined to comment on whether it has launched a formal investigation.
But former commission officials said the agency is almost certainly taking a hard look at the incident, which resulted in 40 million credit-card numbers falling into the hands of hackers.
“When you see a data breach of this size with clear harm to consumers, it’s clearly something that the FTC would be interested in looking at,” said Jon Leibowitz, a former FTC chairman who is now a partner at Davis Polk and Wardwell.
David Vladeck, a professor at Georgetown Law Center and a former head of the FTC’s Consumer Protection Bureau, said it “wouldn’t be surprising” if the FTC is investigating the case.
“This would be right in the FTC’s wheelhouse,” he said. “It demonstrates why the FTC needs to be the cop on the beat here.”
Sen. Richard Blumenthal, a Connecticut Democrat, urged the FTC to investigate the Target hack soon after it became public in December.
“If Target failed to adequately and appropriately protect its customers’ data, then the breach we saw this week was not just a breach of security; it was a breach of trust,” he wrote in a letter to the agency.
The former FTC officials noted that just because hackers managed to breach a company’s system doesn’t mean the company had inadequate security practices. Hackers are sometimes able to penetrate even the most secure systems.
But recent reports have shown that Target made a series of missteps leading up to the hack. The company gave a refrigeration, heating, and air-conditioning subcontractor credentials to its system. The hackers stole those credentials from the vendor, and then they placed a virus in Target’s registers that allowed them to obtain payment information for every credit and debit card that was swiped.
On Nov. 30, a data-security firm hired by Target alerted the company about a possible breach of its system, but the company failed to act, according to Bloomberg Businessweek.
The FTC polices data security under its legal authority over “unfair” business practices. Companies have a responsibility to take “reasonable and appropriate” steps to protect the data they collect from consumers, according to FTC lawyers.
The FTC has settled dozens of data-security cases in recent years with companies including Twitter, Rite Aid, and CVS. But Wyndham, a global hotel chain, is fighting charges that the FTC brought in 2012. The company claims that the FTC’s legal power to go after companies for “unfair” practices does not include inadequate data security.
A federal court in New Jersey is expected to rule on the case soon. If the court sides with Wyndham, it could strip the FTC of power to oversee data security.
But both Leibowitz and Vladeck said they expect the agency to beat back the challenge from Wyndham. If the FTC loses, Congress could step in to restore the FTC’s power.
Congress is already considering legislation that would expand the FTC’s authority to allow it to fine companies for inadequate data security. Currently, the agency can force a company to change its practices but cannot punish companies.
The former FTC officials as well as Edith Ramirez, the current chairwoman of the FTC, argue that Congress should give the agency fining authority for data security.
“We as a society experience too many data breaches, and I think there’s an under-deterrence in this field,” Vladeck said. “I think companies need to get the message.”
What We're Following See More »
At the end of the debate, moderator Lester Holt asked Donald Trump if he stands by his statement that Hillary Clinton didn't have the look of a president. Trump responded by saying Holt misquoted him, instead saying that Clinton "doesn't have the stamina." Clinton responded by saying that when Trump visits 112 countries as secretary of state, he can talk to her about stamina.
Donald Trump, when pressed by Lester Holt on why he finally admitted that President Obama was born in America, repeated his widely debunked claim that it was started by Hillary Clinton.
Hillary Clinton went point by point on how race can so often determine the treatment that people receive, mentioning recent shootings in Tulsa and Charlotte, calling for restored trust between communities and police, and demanding criminal justice reform. Trump responded by calling for law and order and touting his endorsements from police unions. He then said that “African Americans are living in hell,” saying they are just walking down the street and getting “shot ... being decimated by crime."
Just as Hillary Clinton was inviting debate viewers to visit her site for real-time fact checking, there appeared to be a problem with Donald Trump's own campaign website. For about a 15-minute period, a blank page or an error message appeared when we tried to load the Trump site.
Donald Trump has come out in the first segment of this debate raring to go. Trump has interrupted nearly every answer being given by Hillary Clinton, talking over her time and again. Clinton is sticking to her guns, smiling while Trump speaks and then calling on people to go to her website and see the fact checking being done.