GoDaddy to Settle FTC Charges of ‘Unreasonable Security Practices’

The Federal Trade Commission (FTC) said Wednesday (Jan. 15) that a proposed settlement order will require web hosting company GoDaddy to improve its information security program.

The regulator alleged in a complaint that GoDaddy failed to implement “reasonable and appropriate” security measures and that it misled customers about the extent of its data security protections, according to a Wednesday press release.

“Millions of companies, particularly small businesses, rely on web hosting providers like GoDaddy to secure the websites that they and their customers rely on,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release. “The FTC is acting today to ensure that companies like GoDaddy bolster their security systems to protect consumers around the globe.”

Reached by PYMNTS, GoDaddy said in an emailed statement that it invests “significant resources” to help protect its customers’ data and websites and plans to continue doing so.

“We are constantly improving our security capabilities and have already implemented a number of the requirements in the settlement agreement with the FTC,” the statement said. “Notably, the resolution of this matter includes no admission of fault and no monetary penalties. We expect minimal financial impact associated with complying with the terms of the agreement with the FTC.”

The FTC said in its press release that GoDaddy’s “unreasonable security practices” resulted in several security breaches that allowed unauthorized access to customers’ websites and data and exposed consumers visiting those sites to risks.

The regulator added that the proposed settlement order will prevent the company from making misrepresentations about its security, require it to implement a comprehensive information-security program and mandate that it have an independent third-party assessor conduct reviews of that program.

In a separate, similar case, the FTC said in December that it finalized an order requiring Marriott International and its subsidiary Starwood Hotels & Resorts Worldwide to implement a comprehensive information security program.

That case came after the companies suffered three data breaches that affected more than 344 million of their customers worldwide.

Marriott said at the time in a press release that it made no admission of liability with respect to the underlying allegations and that many of the enhancements to its data privacy and information security programs were already in place or in progress.