Consumers Affected
2,500,000
The FTC finalized an order against Drizly and its CEO for security failures that led to a data breach exposing 2.5 million consumers' personal information. Drizly failed to implement basic security measures despite prior alerts. The order requires Drizly to destroy unnecessary data, implement a security program, and publicly detail data collection practices.
Drizly must destroy personal data not necessary for services, refrain from unnecessary data collection, implement an information security program, and publicly disclose data collection practices on its website. CEO James Cory Rellas must implement an information security program at future companies where he has a majority ownership or senior security role if the business collects data from over 25,000 individuals.
In-house legal teams should review all vendor, customer, and data processing agreements for clauses related to data security, data retention, and data collection practices. Specifically, examine security standards, data minimization obligations, retention schedules, and audit rights. Contracts may need amendments to mandate specific security controls (e.g., encryption, access controls), require regular security assessments, enforce strict data retention limits aligned with 'necessary for specific purposes,' and include robust breach notification and cooperation provisions. Additionally, agreements should incorporate rights to audit the vendor's security program and require transparency about data collection purposes, mirroring the FTC's order for public disclosure.
Entity
Drizly
Industry
RetailOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-finalizes-order-online-alcohol-marketplace-security-failures-exposed-personal-data-25-million
2023185 drizly combined consent
https://www.ftc.gov/system/files/ftc_gov/pdf/2023185-drizly-combined-consent.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Drizly"
"failed to implement basic security measures"
"data breach exposing the personal information"
The FTC filed a complaint alleging that GovAssist LLC, Entry LLC, and Scott Zuckerman used deceptive paid search ads, misleading service and pricing claims, and fake reviews to deceive consumers seeking passport services. The complaint alleges violations of the FTC Act, the Impersonation Rule, and the Gramm-Leach-Bliley Act; the case will be decided by the court, and no penalty or remedy is reported as imposed.
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$106.8M
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The FTC sued Digital Forensics Corporation LLC and affiliated defendants, alleging they misled sextortion victims with promises of investigative and monitoring services that often were not provided, and used fake positive reviews. A federal court granted the FTC’s request to temporarily halt the defendants’ activities; the complaint remains for the court to decide.
The FTC alleged that Greenway Auto Group advertised vehicle prices thousands of dollars below the amounts consumers actually paid and used mailers falsely suggesting recipients had won cash prizes. Greenway agreed to an order requiring transparent pricing and prohibiting deceptive prize mailers and other misrepresentations; the press release does not state a monetary penalty.