Cybersecurity Becomes An Even Bigger Problem For U.S. Firms

A recent spate of high-profile hacking attacks at big name U.S. firms like Target Corporation TGT and Home Depot Inc HD have created heightened awareness among business leaders.

Cybersecurity has become a No. 1 priority at many firms as customer data breaches can be costly and difficult to overcome. However, a new federal court ruling could make data breach incidents even more detrimental to affected firms.

Ruling Gives FTC Power

The Third U.S. Circuit Court of Appeals ruled last week that the Federal Trade Commission has the power to investigate hacking attacks and charge the affected firm with unfair trade practices. That means that firms whose data has been compromised can be reprimanded for being unable to keep customer data safe. Problems like an insufficient firewall or a lack of up-to-date cybersecurity software are all reasons the FTC could fine a company that's suffered an attack.

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Cybersecurity Top Billing

The ruling is likely to spur on CEOs efforts to protect their firms from hacking attacks. Depending on the scale of the attack, the FTC could make a firm responsible for compensating affected customers, which could add up to millions of dollars. The ruling will give the FTC the authority to determine whether or not a company's cybersecurity procedures are up to snuff, something that could help protect consumers but pose a challenge to businesses.

Keeping Pace With Hackers

The world of cybersecurity is already difficult to navigate as hacking attacks grow more and more complicated. As the types of cyberthreats are rapidly changing, it has been difficult for security providers to keep up. Many firms have begun to collaborate with one another in an effort to stay ahead of the hacking community, while others are paying top dollar for the latest security products.