[Federal Register Volume 68, Number 121 (Tuesday, June 24, 2003)]
[Notices]
[Pages 37496-37498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15909]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 022 3260]


Guess?, Inc. and Guess.com, inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

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 that accompanies the consent agreement 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 July 18, 2003.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed in the 
SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Joel Winston, FTC, Bureau of Consumer 
Protection, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 
326-3153.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 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)

[[Page 37497]]

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 June 18, 2003), on the World 
Wide Web, at http://www.ftc.gov/os/2003/06/index.htm. 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.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to e-mail messages directed to the 
following e-mail box: [email protected]. Such comments will be 
considered by the Commission and will be available for inspection and 
copying at its principal office in accordance with section 
4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent agreement from Guess?, Inc. and Guess.com, inc. 
(``Guess'').
    The consent agreement 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.
    Guess is an international company that designs and produces men's, 
women's, and children's clothing and accessory products. The company's 
products are marketed, distributed, and sold under various Guess brand 
names through its own stores, a limited number of independent 
retailers, and, its online store at www.guess.com. This matter concerns 
alleged false or misleading representations Guess made to consumers 
about the security of personal information collected online through 
www.guess.com, Guess' online store.
    The Commission's proposed complaint alleges that Guess 
misrepresented that the personal information it obtained from consumers 
through www.guess.com was stored in an unreadable, encrypted format at 
all times. The complaint alleges that this representation was false 
because a commonly known attack could and was used to gain access in 
clear readable text to sensitive personal information, including credit 
card numbers, that Guess obtained from consumers.
    The proposed complaint also alleges that Guess represented that it 
implemented reasonable and appropriate measures to protect the personal 
information it obtained from consumers through www.guess.com against 
loss, misuse, or alteration. The complaint alleges this representation 
was false because Guess did not employ appropriate measures to detect 
reasonably foreseeable vulnerabilities and prevent their exploitation.
    The proposed order applies to Guess' collection and storage of 
personal information from or about consumers in connection with its 
online business. It contains provisions designed to prevent Guess from 
engaging in practices similar to those alleged in the complaint in the 
future.
    Specifically, Part I of the proposed order prohibits Guess, in 
connection with the online advertising, marketing, promotion, offering 
for sale, or sale of any product or service, from misrepresenting the 
extent to which it maintains and protects the security, 
confidentiality, or integrity of any personal information collected 
from or about consumers.
    Part II of the proposed order requires Guess to establish and 
maintain a comprehensive information security program in writing that 
is reasonably designed to protect the security, confidentiality, and 
integrity of personal information collected from or about consumers. 
The security program must contain administrative, technical, and 
physical safeguards appropriate to Guess's size and complexity, the 
nature and scope of its activities, and the sensitivity of the personal 
information collected from or about consumers. Specifically, the order 
requires Guess to:
    [sbull] Designate an employee or employees to coordinate and be 
accountable for the information security program;
    [sbull] Identify material internal and external risks to the 
security, confidentiality, and integrity of customer information that 
could result in the unauthorized disclosure, misuse, loss, alteration, 
destruction, or other compromise of such information, and assess the 
sufficiency of any safeguards in place to control these risks. At a 
minimum, this risk assessment must include consideration of risks in 
each area of relevant operation.
    [sbull] Design and implement reasonable safeguards to control the 
risks identified through risk assessment, and regularly test or monitor 
the effectiveness of the safeguards' key controls, systems, and 
procedures.
    [sbull] Evaluate and adjust its information security program in 
light of the results of testing and monitoring, any material changes to 
its operations or business arrangements, or any other circumstances 
that Guess knows or has reason to know may have a material impact on 
its information security program.
    Part III of the proposed order requires that Guess obtain within 
one year, and on a biannual basis thereafter, an assessment and report 
from a qualified, objective, independent third-party professional, 
certifying that: (1) Guess has in place a security program that 
provides protections that meet or exceed the protections required by 
Part II of this order; and (2) Guess's security program is operating 
with sufficient effectiveness to provide reasonable assurance that the 
security, confidentiality, and integrity of consumer's personal 
information has been protected.
    Parts IV through VII of the proposed order are reporting and 
compliance provisions. Part IV requires Guess's to retain documents 
relating to compliance. For most records, the order requires that the 
documents be retained for a five-year period. For the assessments and 
supporting documents, Guess must retain the documents for three years 
after the date that each assessment is prepared. Part V requires 
dissemination of the order now and in the future to persons with 
responsibilities relating to the subject matter of the order. Part VI 
ensures notification to the FTC of changes in corporate status. Part 
VII mandates that Guess submit compliance reports to the FTC. Part VIII 
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 order or to modify their terms in any 
way.


[[Page 37498]]


    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 03-15909 Filed 6-23-03; 8:45 am]
BILLING CODE 6750-01-P