MGM Resorts International has initiated a lawsuit against the U.S. Federal Trade Commission (FTC) to halt a probe into the data security implications of a significant cyberattack that disrupted the casino operator last year.

The cyberattack occurred in September and reportedly inflicted substantial financial damage to MGM, prompting multiple consumer class action lawsuits. MGM’s legal action challenges the FTC’s probe on several grounds, including violations of Fifth Amendment rights, arguing that the FTC’s use of financial services regulations to justify the investigation is inappropriate and unconstitutional.

Why it matters: This lawsuit displays the ongoing tensions between private companies and regulatory bodies regarding oversight and data security, especially following significant cybersecurity incidents. The outcome of this case could set precedents for how regulatory agencies can enforce data security compliance and the limits of their authority over non-financial entities. It also highlights the potential conflicts of interest that can arise when regulators are personally affected by the incidents they investigate.

• Financial and Operational Impacts: The September cyberattack reportedly caused tens of millions of dollars in damages to MGM, leading to fifteen consumer class actions. The ongoing legal and financial repercussions highlight the significant consequences of cybersecurity breaches in the hospitality and gaming industry.

• Legal Challenge to FTC Authority: MGM Resorts argues that the FTC’s investigative demands are unfounded as MGM is not a financial institution and therefore should not be governed by specific FTC regulations that oversee consumer financial data.

• Conflict of Interest Allegations: The lawsuit also points out a potential conflict of interest involving FTC Chair Lina Khan, who was staying at an MGM property during the cyberattack. MGM contends that her direct experience with the attack’s impact should necessitate her recusal from the investigation.

Go Deeper -> Casino Operator MGM Sues FTC to Block Probe into 2023 Hack – Reuters

MGM Sues FTC Over Probe of Casino Operator’s 2023 Cyberattack – Investopedia