Hewlett-Packard’s Next Shoe To Drop: Here Come The Feds

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So far the Hewlett-Packard spying case is being handled by the California Attorney General’s office but DealBreaker expects federal authorities will become involved soon.
The Federal Trade Commission has authority to investigate deceptive business practices connected with interstate commerce. Specifically, here’s what Section 5 of the FTCA says:

“Whenever the Commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair method of competition or unfair or deceptive act or practice in or affecting commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof would be to the interest of the public, it shall issue and serve upon such person, partnership, or corporation a complaint stating its charges in that respect…”

A typical case would involve, say, someone using false advertisements to induce purchasers to buy products that don’t live up to their promise. So could obtaining phone records from a third-party through deception count? Probably, because there’s no requirement in the statute that says the “deceptive act” be aimed at the victim. A deceptive act aimed at a phone company could well fall under the statute.
But don’t take our word for it. Here’s what Joel Winston, Associate Director of the FTC, Division of Financial Practices, told Private Investigator magazine in 2005.

PIM: Do you classify the acquisition of telephone toll records as a clear violation of deceptive business practices?
Winston: It’s not what we traditionally look at as deception because you’re deceiving party A, but party B is the actual party being harmed. But, we believe that, even though it has not been tested in the courts, that acquiring toll records through false statements constitutes deceptive business practices.
PIM: Is this an area that the FTC is going to start looking into?
Winston: We are aware that there have been some concerns about that and we’re continuing to consider it.

Well, that was a over a year and a half ago. We’re not sure how far along they’ve gone with their “continuing to consider it” thing. But if they want a test case, well the Hewlett-Packard mess seems to be a pretty ripe apple lying on a low-branch. If you were an FTC associate director looking to make a name for himself, why wouldn’t you take a swing at knocking it off the tree?
The FTC on Pretexting [Private Investigator Magazine]

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