It is a bittersweet victory for Michael J. Daugherty, founder and CEO of the now-defunct medical testing laboratory LabMD. Last week an administrative law judge dismissed a Federal Trade Commission data security complaint against his former Atlanta-based company.
The FTC alleged that LabMD violated the FTC Act by failing to employ reasonable and appropriate measures to prevent unauthorized access to consumers’ personal information. However, Chief Administrative Law Judge D. Michael Chappell found that the FTC’s complaint counsel had failed to prove that LabMD’s alleged failure to employ reasonable data security constitutes an unfair trade practice. In addition, the complaint counsel failed to prove that the allegedly unreasonable conduct caused or was likely to cause substantial injury to consumers.
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