WASHINGTON D.C. – Today, Cause of Action Institute (CoA Institute) announced the resolution its client, D-Link Systems, Inc., has reached with the Federal Trade Commission (FTC) regarding the FTC’s allegations about the security practices D-Link Systems used for its products. D-Link Systems is an industry leader in Internet of Things (IoT) and networking solutions.
Key terms of the settlement between D-Link Systems and the FTC announced today include the following:
- No finding of liability for any alleged violation.
- No finding of deceptive marketing statements or practices by D-Link Systems.
- No monetary payment requirement.
- D-Link Systems continues its current comprehensive software security program and can be granted a two-year Safe Harbor for successful security certifications.
This settlement contrasts sharply with the FTC’s other consent orders with IoT companies, which include very broad restrictions on what those companies may say about their products. Importantly, unlike other IoT matters in which the FTC had alleged “deception,” today’s proposed order contains no such restrictions.
D-Link Systems issued the following statement:
“We are pleased to reach an amicable resolution with the FTC. Notably, this order does not find D-Link Systems liable for any alleged violations. We chose to defend against this litigation based on our strong belief in the quality and security of our products and practices. This settlement allows D-Link Systems to vigorously continue with its current comprehensive software security program and sets a new standard for secure software development practices for IoT devices. Today’s announcement further formalizes D-Link Systems’ commitment to product quality, which remains a top priority. We thank Cause of Action for zealously and relentlessly defending D-Link Systems in concluding this litigation.”
John Vecchione, CoA Institute’s President and CEO and lead trial counsel for D-Link Systems commented on the resolution:
“This case will have a lasting impact and, we hope, positively shape public policy in the important areas of technology, data security, and privacy. The Court’s dismissal of the Complaint’s ‘unfairness’ claim for failure to plead actual consumer harm will hopefully refocus the FTC’s efforts on practices that actually injure identifiable consumers, providing technology companies with additional certainty necessary for permissionless and evolving innovation. Today’s settlement is equally unprecedented and represents sound public policy. For the first time, an IoT company has been granted safe harbor for two years if it obtains an assessment certifying its compliance with a state-of-the-art industry standard, as well as the opportunity to choose to replace this standard, working with the FTC, to keep pace with evolving technology.”
Michael Pepson of Cause of Action, counsel for D-Link Systems, added “we took on D-Link Systems’ cause, pro bono, because we believe that D-Link Systems is a responsible corporate citizen that cares about its customers. The settlement reflects that both sides take security and protecting consumers very seriously.”
Christine Yang, counsel for D-Link Systems, joins CoA Institute to thank the Court, particularly Magistrate Judge Jacqueline Scott Corley, for taking the time to help the parties to amicably resolve this matter.
D-Link Systems cooperated with the FTC throughout the agency’s investigation and acted in good faith to amicably resolve this matter with the FTC, thereby conserving judicial resources and avoiding unnecessary further litigation.
Case Background:
Cause of Action Institute announced on January 10, 2017 that it would represent D-Link Systems Inc. in its defense against the FTC.
In May of 2017, the Court instructed the FTC to dismiss D-Link Corp. from the case after D-Link Corp. filed a motion to dismiss the case on the basis that the Court lacked jurisdiction over the Taiwan-based parent company which has not conducted any business activity in the United States for many years.
In September of 2017, the Court dismissed three counts against D-Link Systems, Inc. including the FTC’s Section 5 “unfairness” claim due to the “absence of any concrete facts” supporting the FTC’s allegations of potential consumer harm.
For more information on the background of this case, please visit our website.
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Media Contact: Nichole Van Valkenburg, nichole.vanvalkenburg@causeofaction.org | 202-317-0266
Case Information
FTC v. D-Link Systems, Inc., Case No. 17-cv-00039-JD (N.D. Cal.)
About Cause of Action Institute
Cause of Action Institute is a 501(c)(3) non-profit, non-partisan government oversight organization working for economic liberty unencumbered by overregulation. Cause of Action uses investigative, legal, and communications tools to educate the public about government accountability, transparency, and the rule of law.
About D-Link Systems, Inc.
D-Link Systems is a global leader in connectivity for home, small business, mid-to large-sized enterprise environments, and service providers.
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