MGM Resorts Sues FTC Over Cyberattack Probe

Key Takeaways:

• MGM Resorts filed suit in federal court against the Federal Trade Commission (FTC) for its investigation into a cyberattack that disrupted operations at the casino operator’s properties.
• The lawsuit alleges that FTC Chair Lina Khan’s presence at one of MGM’s properties during the attack prompted the investigation.
• MGM claims its Fifth Amendment rights were violated as the regulations cited by the FTC did not apply to the company.

MGM Resorts International has taken legal action against the Federal Trade Commission (FTC) and FTC Chair Lina Khan over the regulator’s probe into a cyberattack that targeted the casino operator in September. The lawsuit, filed in the U.S. District Court for the District of Columbia, asserts that the FTC violated MGM’s Fifth Amendment rights of due process and equal treatment under the law. MGM argued that it is not a financial institution and therefore not subject to the FTC’s rules regarding consumer financial data.

The company’s complaint suggests that the investigation was triggered by Khan’s presence as a guest at one of MGM’s Las Vegas properties when the cyberattack occurred. Due to system disruptions, Khan was asked to provide her credit card information. This incident prompted her to question MGM’s data security practices during the outage, which a staff member could not confirm.

In response to Khan’s inquiry, the FTC issued a Civil Investigative Demand on Jan. 25, seeking clarification on the unanswered question. However, MGM highlighted that the FTC cited two financial services regulations to justify the investigation, both of which were deemed inapplicable to the company.

Describing the investigation as unconstitutional, MGM Resorts emphasized its stance on the matter in the court filing. Despite these legal challenges, shares of MGM Resorts saw a 0.9% increase in value on Monday, closing at $42.85. Year-to-date, the stock has experienced a 5.8% decline.

Conclusion:

In conclusion, MGM Resorts’ legal battle with the FTC underscores the complexities surrounding cybersecurity incidents and regulatory oversight in the digital age. The company’s decision to challenge the FTC’s investigation reflects its commitment to protecting its interests and maintaining compliance with applicable laws and regulations. As this case unfolds in federal court, it will be interesting to see how it shapes future interactions between businesses and regulatory authorities in the realm of cybersecurity.

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