Partner Alysa Z. Hutnik Quoted on FTC Data Security Case Against Wyndham Hotels

LJN’s Franchising Business & Law Alert quoted partner Alysa Z. Hutnik in the article, ​“Wyndham Hotels Charged for Franchisees’ Data Breaches.” In June, the Federal Trade Commission (FTC) filed a lawsuit against Wyndham Worldwide Corporation and three of its subsidiaries, alleging that they engaged in unfair and deceptive practices and violated Section 5 of the FTC Act by failing to implement adequate data security protections on computer systems located at 90 Wyndham-brand franchised hotels.

“The FTC’s complaint is significant for two reasons,” said Ms. Hutnik. ​“One, it represents the first time that the FTC will litigate its theory as to whether an entity’s privacy and data security practices were deceptive and unfair under Section 5 of the FTC Act. Past FTC cases have resulted in pre-litigation settlements or informal closings of investigations. Two, the lawsuit reflects the FTC’s position on what facts might cause a corporate brand to be held legally responsible under the FTC Act for the privacy and information security practices of a franchisee and affiliated third parties.”

The FTC pointed to numerous alleged data security flaws that, cumulatively, led to security breaches. ​“No privacy plan is perfect,” said Ms. Hutnik. ​“The FTC is looking at whether you are, on the whole, acting responsibly and remedying vulnerabilities when they become known.”