FTC can finally sue Businesses that fail at basic best practices for Cyber security.
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@Dashrender said:
@scottalanmiller said:
@Dashrender said:
Sure, but in a Free Market those companies won't last long anyway - sure some people will be burned by the crap company, but soon the word will get out that they claim A and give B... and a competitor will come along and offer A for real and people will go to them.
Actually, free market studies say the opposite. Running fast and loose is often the best way to succeed as long as there is no regulatory system to stop it. Look at Lenovo as a great example. They didn't just put customers at risk by being lazy, they did it intentionally. How quickly did even IT pros forget and/or forgive and keep recommending the product or buying them? How many consumers or businesses even understand the risk that they were put under? Very few.
The free market does not have a long memory. Companies that do things so badly as to actually cause the market to hate them and remember them (can you even think of a company so bad that it falls into this category) can easily just rebrand and do the whole thing again (Cingular renamed themselves AT&T, everyone forgot how awful they were and Windstream changed their name to Windstream because no one would do business with them under the old name, now everyone buys them again and experiences the exact same problems.)
Free markets and consumers simply don't work like this. The best way to make money in a free market is to treat customers poorly in general. Customers are not rational and do not react to bad treatment in the way that you would expect.
I did say that though - consumers have proven that they just don't care enough to remember and be aware of what they are doing.
You did, but it is important that we not use free market as a reason to feel that government oversight is bad. You can only have a free market with good government oversight. Do we have too much? Yes. The US does a lot of this very badly, but this isn't an example of that, I don't feel. This seems like the government getting it very right.
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@scottalanmiller said:
@Dashrender said:
@scottalanmiller said:
@Dashrender said:
Sure, but in a Free Market those companies won't last long anyway - sure some people will be burned by the crap company, but soon the word will get out that they claim A and give B... and a competitor will come along and offer A for real and people will go to them.
Actually, free market studies say the opposite. Running fast and loose is often the best way to succeed as long as there is no regulatory system to stop it. Look at Lenovo as a great example. They didn't just put customers at risk by being lazy, they did it intentionally. How quickly did even IT pros forget and/or forgive and keep recommending the product or buying them? How many consumers or businesses even understand the risk that they were put under? Very few.
The free market does not have a long memory. Companies that do things so badly as to actually cause the market to hate them and remember them (can you even think of a company so bad that it falls into this category) can easily just rebrand and do the whole thing again (Cingular renamed themselves AT&T, everyone forgot how awful they were and Windstream changed their name to Windstream because no one would do business with them under the old name, now everyone buys them again and experiences the exact same problems.)
Free markets and consumers simply don't work like this. The best way to make money in a free market is to treat customers poorly in general. Customers are not rational and do not react to bad treatment in the way that you would expect.
I did say that though - consumers have proven that they just don't care enough to remember and be aware of what they are doing.
You did, but it is important that we not use free market as a reason to feel that government oversight is bad. You can only have a free market with good government oversight. Do we have too much? Yes. The US does a lot of this very badly, but this isn't an example of that, I don't feel. This seems like the government getting it very right.
And I didn't say this was an example of that - just like I mentioned HIPAA isn't currently a bad example of that, currently. And why aren't they, probably because they don't have the money currently to make it bad. That and doing do would probably bankrupt many small practices/businesses trying to become compliant. Though I agree that that's probably not a good enough reason to not do it.
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@Dashrender said:
@scottalanmiller said:
@Dashrender said:
@scottalanmiller said:
@Dashrender said:
Sure, but in a Free Market those companies won't last long anyway - sure some people will be burned by the crap company, but soon the word will get out that they claim A and give B... and a competitor will come along and offer A for real and people will go to them.
Actually, free market studies say the opposite. Running fast and loose is often the best way to succeed as long as there is no regulatory system to stop it. Look at Lenovo as a great example. They didn't just put customers at risk by being lazy, they did it intentionally. How quickly did even IT pros forget and/or forgive and keep recommending the product or buying them? How many consumers or businesses even understand the risk that they were put under? Very few.
The free market does not have a long memory. Companies that do things so badly as to actually cause the market to hate them and remember them (can you even think of a company so bad that it falls into this category) can easily just rebrand and do the whole thing again (Cingular renamed themselves AT&T, everyone forgot how awful they were and Windstream changed their name to Windstream because no one would do business with them under the old name, now everyone buys them again and experiences the exact same problems.)
Free markets and consumers simply don't work like this. The best way to make money in a free market is to treat customers poorly in general. Customers are not rational and do not react to bad treatment in the way that you would expect.
I did say that though - consumers have proven that they just don't care enough to remember and be aware of what they are doing.
You did, but it is important that we not use free market as a reason to feel that government oversight is bad. You can only have a free market with good government oversight. Do we have too much? Yes. The US does a lot of this very badly, but this isn't an example of that, I don't feel. This seems like the government getting it very right.
And I didn't say this was an example of that - just like I mentioned HIPAA isn't currently a bad example of that, currently. And why aren't they, probably because they don't have the money currently to make it bad. That and doing do would probably bankrupt many small practices/businesses trying to become compliant. Though I agree that that's probably not a good enough reason to not do it.
You are still assuming that, even when the government does something good, it either will do something bad with it soon and/or that it intended to do something bad but failed. How is the government ever to do something right if even when it does, you see it as the failure that hasn't happened?
Actually I think that HIPAA isn't very good. It doesn't hold companies accountable to even basic best practices and encourages them to do often reckless things with customer data. I see the lack of enforcement as a failure. That HIPAA doesn't just allow but often somehow encourages medical practices to play dumb and do insecure things because HIPAA keeps not doing more to enforce good practices makes it, to me, a failure.
The FTC could do more, perhaps, to make HIPAA have some teeth.
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@scottalanmiller I completely hope that that FTC does and will do the correct thing with this new precedent. But I suspect that what will come from this will be more of the chase every company large and small for any penny that the govt can get.
Now, this isn't a bad this in its self, immediately as many companies will get the hint that they need to improve their security policies and practices.
But what will likely come from it is more businesses will simply try to become more deceptive about their practices because "well its to much (money, work, difficult) to (implement / keep current) with current standards.
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@DustinB3403 said:
@scottalanmiller I completely hope that that FTC does and will do the correct thing with this new precedent. But I suspect that what will come from this will be more of the chase every company large and small for any penny that the govt can get.
But why do you suspect that? Is there a precedence for the government doing something like this? I can't think of one.
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@DustinB3403 said:
But what will likely come from it is more businesses will simply try to become more deceptive about their practices because "well its to much (money, work, difficult) to (implement / keep current) with current standards.
Why would they get deceptive? I'm not sure what you mean. How would be more deceptive help them?
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The precedent isn't for this exact case, but as a general practice, "We've done it before, lets go again for another round"
It's how people, not just govt function.
Do something again and again because it's the most simple and rewarding process to do. What happens to the collected monies from the sued companies, does it go towards the damaged parties, or does the govt keep it?
I'd hope it goes to the damaged parties, likely some or most of it does. But some of it definitely goes to the agents supporting those damaged parties. In one way or another. Which would lead to corruption.
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@DustinB3403 said:
The precedent isn't for this exact case, but as a general practice, "We've done it before, lets go again for another round"
It's how people, not just govt function.
But you are talking about suing wrongdoers. How many cases of wrongdoing do you want the FTC to overlook?
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I wouldn't say its a number of wrongdoing that the FTC should over look at all.
Nor should they overlook any if it's practical for them to enforce every possible case.
This new power needs to be applied equally, and judgement (fines) applied appropriately (to the scale of the breach, not to the size (profits) that the company makes. Not just a demand for a blank check so to speak from the defendant.
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Which I suspect that a "minimum fine" will be developed for all these sorts of cases.
Which I'd imagine would make many businesses pay the fine and close shop.
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@DustinB3403 said:
This new power needs to be applied equally, and judgement (fines) applied appropriately (to the scale of the breach, not to the size (profits) that the company makes. Not just a demand for a blank check so to speak from the defendant.
Well that's not up to the FTC it would seem. They just prosecute the violators.
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@DustinB3403 said:
Which I suspect that a "minimum fine" will be developed for all these sorts of cases.
Which I'd imagine would make many businesses pay the fine and close shop.
I would expect a minimum fine to be very unlikely. And the later to be a good thing. Many SMBs playing fast and loose should indeed close up. That's not the kind of business practices we want being rewarded in any way.
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@scottalanmiller said:
@DustinB3403 said:
Which I suspect that a "minimum fine" will be developed for all these sorts of cases.
Which I'd imagine would make many businesses pay the fine and close shop.
Why would a minimum fine be unlikely? There are minimum fines for DWI's, using drugs, blantant theft from a person or business.
Its all a matter of reasonable restitution. If 300 people's private information is stolen during a breach. Lets (and just for argument sake) say that the FMV of that stolen data is $5 Million . Credit value, cash, property . What ever it might be.
A minimum restitution to the allowed loss of that FMV has to exist. Otherwise the company that allowed the loss to happen in the first place (and who is at fault) could possibly only pay $100,000 fine. Or almost no fine at all.
Setting a minimum doesn't mean that it will always be used as the value at which stolen information is valued. Where fines are applied from.
It means (at least it should IMO) that if your found guilty of blantant disregard for customer privacy you will pay X dollars and UP as appropriate for the level of the breach.
Quiet honestly I'd want a 1:1 ratio of value:fine but that will likely never happen.
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@DustinB3403 said:
Why would a minimum fine be unlikely? There are minimum fines for DWI's, using drugs, blantant theft from a person or business.
Those are not Federal crimes. That some states have those does not imply that there is a Federal system for that.
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@scottalanmiller Those are simple examples.
Lets use the example of trafficking illegal drugs across the border, then from state to state trafficking the drug money.
There is a minimum for those.
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@DustinB3403 said:
Quiet honestly I'd want a 1:1 ratio of value:fine but that will likely never happen.
I'm not sure that I agree. That's like saying that you'd only want a DWI charged to the level of damage he did rather than the damage he was willing to do. Yes, companies will likely only be sued after a breach has happened. But the degree to which they were exposed (how can we prove that anyway?) is less important to me as a citizen (in fact, not at all important) as to how risky the company was willing to be.
In fact, I don't see that the breech should even be considered. At all, because that uses the assumed quality of the attacker as a guide to penalties for putting people at risk rather than punishing the action of the company not protecting its customers.
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@DustinB3403 said:
@scottalanmiller Those are simple examples.
Lets use the example of trafficking illegal drugs across the border, then from state to state trafficking the drug money.
There is a minimum for those.
I'm not aware of that but I'll assume that that is correct. Still, isn't that a criminal situation though, this is not. Still rather different. This is a civil trial.
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@scottalanmiller So a smarter hacker (or team) who breaches even the best implementation of IT security would still be fined, because they didn't go out of their way to further test the security systems that are current best practice. Because that is exactly were this leads too.
Again I am all for the new power, I'm just playing devil's advocate.
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@DustinB3403 said:
@scottalanmiller So a smarter hacker (or team) who breaches even the best implementation of IT security would still be fined, because they didn't go out of their way to further test the security systems that are current best practice. Because that is exactly were this leads too.
No, I think you've missed the point of the ruling. It is against the company, not the attacker, and it is for not properly securing the data. If well secured and still breached, no reason for legal concern. If insecure and not breached, there could still be cause for concern if it were to be exposed.
I don't understand the fear of "leading to" anything. There is a good law, it seems, and no reason to suspect abuse. Can abuse happen? Yes. But it could happen without good laws. There is no need to be suspect of good things just because bad things are still possible.
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I think this ruling leans more towards, "You'd better follow best practices with regards to private client information (which isn't it all private), and if you don't and are breached, regardless of the cause you'll be fined for said breach."
