[Federal Register Volume 74, Number 26 (Tuesday, February 10, 2009)]
[Notices]
[Pages 6627-6629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-2764]
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FEDERAL TRADE COMMISSION
[File No. 082 3113]
Genica Corporation and Compgeeks.com; 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 9, 2009.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Genica Corporation, File No. 082 3113,'' to
facilitate the organization of comments. A comment filed in paper form
should include this reference both in the text and on the envelope, and
should be mailed or delivered to the following address: Federal Trade
Commission/Office of the Secretary, Room 135-H, 600 Pennsylvania
Avenue, N.W., Washington, D.C. 20580. Comments containing confidential
material must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with Commission Rule 4.9(c). 16 CFR
4.9(c) (2005).\1\ The FTC is requesting that any comment filed in paper
form be sent by courier or overnight service, if possible, because U.S.
postal mail in the Washington area and at the Commission is subject to
delay due to heightened security precautions. Comments that do not
contain any nonpublic information may instead be filed in electronic
form by
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following the instructions on the web-based form at (http://secure.commentworks.com/ftc-Genica). To ensure that the Commission
considers an electronic comment, you must file it on that web-based
form.
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
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The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC website, to the extent
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes
every effort to remove home contact information for individuals from
the public comments it receives before placing those comments on the
FTC website. More information, including routine uses permitted by the
Privacy Act, may be found in the FTC's privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).
FOR FURTHER INFORMATION CONTACT: Molly Crawford, Bureau of Coonsumer
Protection, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, (202)
326-2252.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 of
the Commission 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) 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 5, 2009), on the World Wide Web, at (http://www.ftc.gov/os/2009/02/index.htm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 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. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent agreement from Genica Corporation (``Genica'') and
Compgeeks.com, also doing business as Computer Geeks Discount Outlet
and Geeks.com (``Compgeeks.com'').
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.
Genica and its wholly-owned subsidiary, Compgeeks.com,
(collectively ``respondents'') sell computer systems, peripherals, and
consumer electronics to consumers over the internet, including through
a website (www.geeks.com) operated by Compgeeks.com. Respondents
operate a computer network that consumers use, in conjunction with the
www.geeks.com website and web application, to obtain information and to
buy their products. In selling products through the www.geeks.com
website, respondents routinely collect sensitive information from
consumers to obtain authorization for credit card purchases, including
a first and last name, address, e-mail address, telephone number,
credit card number, credit card expiration date, and credit card
security code (hereinafter ``personal information''). This information
is particularly sensitive, because it can be used to facilitate payment
card fraud and other consumer harm. This matter concerns alleged false
or misleading representations respondents made about the security they
provided for this information.
The Commission's complaint alleges that respondents represented
that they implemented reasonable and appropriate security measures to
protect the privacy and confidentiality of personal information. The
complaint alleges that this representation was false because
respondents engaged in a number of practices that, taken together,
failed to provide reasonable and appropriate security for sensitive
personal information stored on their network. Among other things,
respondents allegedly: (1) stored personal information in clear,
readable text; (2) did not adequately assess the vulnerability of their
web application and network to commonly known or reasonably foreseeable
attacks, such as ``Structured Query Language'' (``SQL'') injection
attacks; (3) did not implement simple, free or low-cost, and readily
available defenses to such attacks; (4) did not use readily available
security measures to monitor and control connections between computers
on the network and from the network to the internet; and (5) failed to
employ reasonable measures to detect and prevent unauthorized access to
personal information, such as by logging or employing an intrusion
detection system.
The complaint further alleges that since at least January 2007 and
continuing through at least June 2007, hackers repeatedly exploited
these vulnerabilities by using SQL injection attacks on the
www.geeks.com website and web application. Through these attacks, the
hackers allegedly found personal information stored on respondents'
network and exported the information of hundreds of customers,
including credit card numbers, expiration dates, and security codes,
over the internet to outside computers.
The proposed order applies to personal information respondents
collect from or about consumers. It contains provisions designed to
prevent respondents from engaging in the future in practices similar to
those alleged in the complaint.
Part I of the proposed order prohibits respondents, in connection
with the advertising, marketing, promotion, offering for sale, or sale
of any product or service, from misrepresenting the extent to which
respondents maintain and protect the privacy, confidentiality, or
integrity of any personal information collected from or about
consumers.
Part II of the proposed order requires respondents to establish and
maintain a comprehensive information security program that is
reasonably designed to protect the security, confidentiality, and
integrity of personal information collected from or about consumers.
The written security program must contain administrative, technical,
and physical safeguards appropriate to respondents' size and
complexity, the nature and scope of respondents' activities, and the
sensitivity of the personal information collected from or about
consumers. Specifically the order requires respondents to:
1. Designate an employee or employees to coordinate and be
accountable for the information security program;
2. Identify material internal and external risks to the security,
confidentiality, and integrity of personal information that could
result in the
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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;
3. 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;
4. Develop and use reasonable steps to retain service providers
capable of appropriately safeguarding personal information they receive
from respondents and requiring service providers by contract to
implement and maintain appropriate safeguards; and
5. Evaluate and adjust respondents' information security program in
light of the results of the testing and monitoring, any material
changes to respondents' operations or business arrangements, or any
other circumstances that respondents know or have reason to know may
have a material impact on the effectiveness of their information
security program.
Part III of the proposed order requires that respondents, in
connection with the online advertising, marketing, promotion, offering
for sale, or sale of any product or service to consumers, obtain within
180 days, and on a biennial bases thereafter for a period of ten (10)
years, an assessment and report from a qualified, objective,
independent third-party professional, certifying, among other things,
that respondents have in place a security program that provides
protections that meet or exceed the protections required by Part II of
the proposed order; and (2) respondents' security program is operating
with sufficient effectiveness to provide reasonable assurance that the
security, confidentiality, and integrity of consumers' personal
information is protected.
Parts IV through VIII of the proposed order are reporting and
compliance provisions. Part IV requires respondents to retain documents
relating to their compliance with the order. For most records, the
order requires that the documents be retained for a five-year period.
For the third-party assessments and supporting documents, respondents
must retain the documents for a period of 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 respondents
submit an initial compliance report to the FTC, and make available to
the FTC subsequent reports. Part VIII is a provision ``sunsetting'' the
order after twenty (20) years, with certain exceptions.
The purpose of the analysis is to aid public comment on the
proposed order. It is not intended to constitute an official
interpretation of the proposed order or to modify its terms in any way.
By direction of the Commission.
Donald S. Clark
Secretary
[FR Doc. E9-2764 Filed 2-9-09: 8:45 am]
BILLING CODE 6750-01-S