[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Notices]
[Pages 13673-13675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04606]
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FEDERAL TRADE COMMISSION
[File No. 122 3049]
HTC America, Inc.; Analysis of Proposed Consent Order To Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis To
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before March 22, 2013.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/htcamericaconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``HTC America, File No.
122 3049'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/htcamericaconsent by following the
instructions on the web-based form. If you prefer to file your comment
on paper, mail or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Nithan Sannappa (202-326-2674) or
Jonathan E. Zimmerman (202-326-2049), FTC, Bureau of Consumer
Protection, 600 Pennsylvania Avenue NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis To Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for February 22, 2013), on the World Wide Web,
at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained
from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue
NW., Washington, DC 20580, either in person or by calling (202) 326-
2222.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before March 22, 2013.
Write ``HTC America, File No. 122 3049'' on your comment. Your comment
``including your name and your state'' will be placed on the public
record of this proceeding, including, to the extent practicable, on the
public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to
remove individuals' home contact information from comments before
placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which * * * is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR
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4.9(c).\1\ Your comment will be kept confidential only if the FTC
General Counsel, in his or her sole discretion, grants your request in
accordance with the law and the public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/htcamericaconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``HTC America, File No.
122 3049'' on your comment and on the envelope, and mail or deliver it
to the following address: Federal Trade Commission, Office of the
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW.,
Washington, DC 20580. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before March 22, 2013. You can find more information,
including routine uses permitted by the Privacy Act, in the
Commission?s privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent order applicable to HTC America, Inc. (``HTC'').
The proposed consent order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
HTC is a mobile device manufacturer that develops and manufactures
smartphones and tablet computers using Google Inc.'s Android operating
system and Microsoft Corporation's Windows Mobile and Windows Phone
operating systems. HTC has customized its Android-based mobile devices
by adding or modifying various pre-installed applications and
components in order to differentiate its products from those of
competitors also manufacturing Android-based mobile devices. HTC has
also customized both its Android and Windows Mobile devices in order to
comply with the requirements of certain network operators. As the
customized applications and components are pre-installed on the device,
consumers do not choose to install the customized applications and
components, and the device user interface does not provide consumers
with an option to uninstall or remove the customized applications and
components from the device.
The Commission's complaint alleges that HTC engaged in a number of
practices that, taken together, failed to provide reasonable and
appropriate security in the design and customization of software on its
mobile devices. Among other things, HTC:
(1) Failed to implement an adequate program to assess the security
of products it shipped to consumers;
(2) Failed to implement adequate privacy and security guidance or
training for its engineering staff;
(3) Failed to conduct assessments, audits, reviews, or tests to
identify potential security vulnerabilities in its mobile devices;
(4) Failed to follow well-known and commonly-accepted secure
programming practices, including secure practices that were expressly
described in the operating system's guides for manufacturers and
developers, which would have ensured that applications only had access
to users' information with their consent;
(5) Failed to implement a process for receiving and addressing
security vulnerability reports from third-party researchers, academics
or other members of the public, thereby delaying its opportunity to
correct discovered vulnerabilities or respond to reported incidents.
The complaint further alleges that, due to these failures, HTC
introduced numerous security vulnerabilities in the process of
customizing its mobile devices. Once in place, HTC failed to detect and
mitigate these vulnerabilities, which, if exploited, provide third-
party applications with unauthorized access to sensitive information
and sensitive device functionality. The sensitive device functionality
potentially exposed by the vulnerabilities includes the ability to send
text messages without permission, the ability to record audio with the
device's microphone without permission, and the ability to install
other applications, including malware, onto the device without the
user's knowledge or consent. The complaint alleges that malware placed
on consumers' devices without their permission could be used to record
and transmit information entered into or stored on the device,
including financial account numbers and related access codes or
personal identification numbers, and medical information. In addition,
other sensitive information exposed by the vulnerabilities includes,
but is not limited to, location information, the contents of text
messages, the user's personal phone number, phone numbers of contacts,
phone numbers of those who send text messages to the user, and the
user's web and media viewing history.
The proposed order contains provisions designed to prevent HTC from
engaging in the future in practices similar to those alleged in the
complaint.
Part I of the proposed order prohibits HTC from misrepresenting the
extent to which HTC or its products or services--including any covered
device--use, maintain and protect the security of covered device
functionality or the security, privacy, confidentiality, or integrity
of covered information from or about consumers. Part II of the proposed
order requires HTC to (1) address security risks related to the
development and management of new and existing covered devices, and (2)
protect the security, confidentiality, and integrity of covered
information, whether collected by respondent or input into, stored on,
captured with, accessed or transmitted through a covered device. The
security program must contain administrative, technical, and physical
safeguards appropriate to HTC's size and complexity, nature and scope
of its activities, and the sensitivity of the information collected
from or about consumers. Specifically, the proposed order requires HTC
to:
Designate an employee or employees to coordinate and be
accountable for the information security program;
Identify material internal and external risks to the
security of covered devices that could result in unauthorized access to
or use of covered device functionality, and assess the
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sufficiency of any safeguards in place to control these risks;
Identify material internal and external risks to the
security, confidentiality, and integrity of covered information that
could result in the unauthorized disclosure, misuse, loss, alteration,
destruction, or other compromise of such information, whether such
information is in HTC's possession or is input into, stored on,
captured with, accessed or transmitted through a covered device, and
assess the sufficiency of any safeguards in place to control these
risks;
Consider risks in each area of relevant operation,
including but not limited to (1) employee training and management; (2)
product design, development and research; (3) secure software design
and testing, including secure engineering and defensive programming;
and (4) review, assessment, and response to third-party security
vulnerability reports;
Design and implement reasonable safeguards to control the
risks identified through risk assessment, including through reasonable
and appropriate software security testing techniques, and regularly
test or monitor the effectiveness of the safeguards' key controls,
systems, and procedures;
Develop and use reasonable steps to select and retain
service providers capable of maintaining security practices consistent
with the order, and require service providers by contract to implement
and maintain appropriate safeguards; and
Evaluate and adjust its information security program in
light of the results of testing and monitoring, any material changes to
HTC's operations or business arrangement, or any other circumstances
that it knows or has reason to know may have a material impact on its
security program.
However, Part II does not require HTC to identify and correct
security vulnerabilities in third parties' software on covered devices
to the extent the vulnerabilities are not the result of respondent's
integration, modification, or customization of the third party
software.
Part III of the proposed order requires HTC to develop security
patches to fix the security vulnerabilities in each affected covered
device having an operating system version released on or after December
2010. Within thirty (30) days of service of the order, HTC must release
the security patches either directly to affected covered devices or to
the applicable network operator for deployment to the affected covered
devices. HTC must provide users of the affected covered devices with
clear and prominent notice regarding the availability of the security
patches and instructions for installing the security patches.
Part IV of the proposed order requires HTC to obtain, within the
first one hundred eighty (180) days after service of the order and on a
biennial basis thereafter for a period of twenty (20) years, an
assessment and report from a qualified, objective, independent third-
party professional, certifying, among other things, that: (1) It has in
place a security program that provides protections that meet or exceed
the protections required by Part II of the proposed order; and (2) its
security program is operating with sufficient effectiveness to provide
reasonable assurance that the security of covered device functionality
and the security, confidentiality, and integrity of covered information
is protected.
Parts V through IX of the proposed order are reporting and
compliance provisions. Part V requires HTC to retain documents relating
to its compliance with the order. The order requires that the documents
be retained for a three-year period. Part VI requires dissemination of
the order now and in the future to all current and future principals,
officers, directors, and managers, and to persons with responsibilities
relating to the subject matter of the order. Part VII ensures
notification to the FTC of changes in corporate status. Part VIII
mandates that HTC submit a compliance report to the FTC within 60 days,
and periodically thereafter as requested. Part IX is a provision
``sunsetting'' the order after twenty (20) years, with certain
exceptions.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the proposed complaint or order or to modify the
order's terms in any way.
By direction of the Commission, Chairman Leibowitz not
participating and Commissioner Ohlhausen recused.
Donald S. Clark
Secretary.
[FR Doc. 2013-04606 Filed 2-27-13; 8:45 am]
BILLING CODE 6750-01-P