The FTC's IoT security case against D-Link will test its power

The agency faces a hard fight in its suit alleging D-Link's routers and cameras aren't secure

A Federal Trade Commission attempt to rein in a poorly secured IoT device is raising questions over whether the U.S. regulator has the power to crack down on vendors suspected of shoddy practices.

On Thursday, the FTC filed a complaint against Taiwanese manufacturer D-Link Systems that charged the company’s internet routers and web cameras can easily be hacked, putting consumers at risk.

But the FTC’s complaint doesn’t cite evidence that the products have been breached, only the potential for harm to consumers.

That’s among the reasons D-Link is contesting the complaint. “Notably, the complaint does not allege any breach of a D-Link Systems device,” it said in a statement

"Instead, the FTC speculates that consumers were placed 'at risk' to be hacked, but fails to allege, as it must, that actual consumers suffered," the company said. 

No harm, no foul? That’ll be a key question as a federal court examines the case, said Jeremy Goldman, a partner at law firm Frankfurt Kurnit Klein & Selz who specializes in digital law.

“This usually doesn’t happen. Most of the time, there is a settlement made with the FTC,” he said. “But with D-Link fighting back, there is a real question over the scope of the FTC’s power.”

The action comes as cybersecurity experts warn of the dangers posed by poorly secured internet-connected devices. Hackers can easily take them over to steal a consumer’s data or infect them to form botnets that can be used to take down websites.

The FTC said on Thursday it was very aware of the potential dangers, and so decided to sue D-Link, an alleged offender that produces wireless routers, web cameras and other products.

The FTC alleges D-Link’s promotional materials deceived consumers into thinking the products were secure, when they actually contained vulnerabilities. But no U.S. law defines what constitutes a secure router or web camera.

The FTC's approach is problematic, said Robert Graham, CEO of security firm Errata Security. 

“You can’t really hold people accountable, when no one knows what the law is doing,” he said. 

Under the FTC’s logic, any company, from D-Link to Microsoft to Cisco Systems, could be sued for promising security in their products but failing to address vulnerabilities, he said.

"Perfect security is impossible," Graham said. "The FTC is just applying arbitrary standards.”

The FTC has been taking an aggressive stance in promoting better security standards under the Obama administration, said Goldman at Frankfurt Kurnit Klein & Selz. The complaint against D-Link a warning shot at the IoT industry, he said.

“Right now there are no U.S. laws that set the minimum level of security for these devices,” he said. “So the FTC is trying to fill those gaps in the name of protecting consumers.”

But the commission still might face legal difficulties in holding D-Link accountable for its products. 

"You have to show probability of harm," he said. "That's where the battle is going to be."

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?