Geoffrey Manne & Kristian Stout on the FTC’s Standardless Data Security Standard in the Journal of Law, Economics & Policy
ICLE President & Founder Geoffrey Manne and ICLE Associate Director Kristian Stout published a paper in the Journal of Law, Economics & Policy titled: When “Reasonable” Isn’t: The FTC’s Standardless Data Security Standard.
Summary
Although the Federal Trade Commission (FTC) is well staffed with highly skilled economists, its approach to data security is disappointingly light on economic analysis. The unfortunate result of this lacuna is an approach to these complex issues lacking in analytical rigor and the humility borne of analysis grounded in sound economics. In particular, the Commission’s “reasonableness” approach to assessing whether data security practices are unfair under Section 5 of the FTC Act1 lacks all but the most superficial trappings of the well-established law and economics of torts, from which the concept is borrowed.