[Federal Register Volume 76, Number 89 (Monday, May 9, 2011)]
[Notices]
[Pages 26729-26731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11183]


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FEDERAL TRADE COMMISSION

[File No. 102 3160]


Ceridian Corporation; 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 June 2, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Ceridian, File No. 102 
3160'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/ceridian, 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: Tiffany George (202-326-3040) or Jamie 
Hine (202-326-2188), 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, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 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 May 3, 2011), 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, 
D.C. 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 June 2, 2011. 
Write ``Ceridian, File No. 102 3160'' 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 doesn't 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 doesn't include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, don't 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided 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, don't 
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 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

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comments online. To make sure that the Commission considers your online 
comment, you must file it at https://ftcpublic.commentworks.com/ftc/ceridian, 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 ``ACeridian, File No. 102 
3160'' 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 June 2, 2011. 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 Ceridian Corporation.
    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.
    The Commission's complaint alleges that Ceridian is a service 
provider that, among other things, provides payroll processing, 
payroll-related tax filing, benefits administration, and other human 
resource services to business customers. The company operates a Web-
based payroll processing service for small business customers in the 
United States under the name ``Powerpay.'' Ceridian's customers enter 
their employees' personal information on the Powerpay Web site, which 
they use to automate payroll processing for their employees.
    The complaint alleges that when customers enter their employees' 
personal information on the Powerpay Web site, the information is sent 
to computers on Ceridian's computer network for the purpose of 
computing payroll amounts and processing payroll checks and direct 
deposits. This personal information, in some instances, consists of 
name, address, e-mail address, telephone number, Social Security 
number, date of birth, and direct deposit account number. Such 
information--particularly Social Security numbers, which do not 
expire--can be used to facilitate identity theft, including existing 
and new account fraud, among other things. In addition, direct deposit 
account information can be used to facilitate theft.
    The complaint alleges that Ceridian engaged in a number of 
practices that, taken together, failed to provide reasonable and 
appropriate security for the personal information it collected and 
maintained. Among other things, Ceridian: (1) Stored personal 
information in clear, readable text; (2) created unnecessary risks to 
personal information by storing it indefinitely on its network without 
a business need; (3) did not adequately assess the vulnerability of its 
Web applications and network to commonly known or reasonably 
foreseeable attacks, such as ``Structured Query Language'' (``SQL'') 
injection attacks; (4) did not implement readily available, free or 
low-cost defenses to such attacks; and (5) failed to employ reasonable 
measures to detect and prevent unauthorized access to personal 
information. These practices are fundamental security failures. Each 
has been challenged in prior FTC data security cases, and each could 
have been remedied using well-known, readily available, and free or 
low-cost data security measures. In particular, SQL injection has been 
a well-known vulnerability for nearly a decade and is one of the most 
basic network vulnerabilities to address.
    The complaint alleges that as a result of these failures, hackers 
executed an SQL injection attack on the Powerpay Web site and Web 
application. Through this attack, the hackers found personal 
information stored in Powerpay on Ceridian's network and exported the 
information of at least 27,673 individuals, including, in some 
instances, bank account numbers, Social Security Numbers, and dates of 
birth, over the Internet to outside computers. Given the sensitive 
nature of the personal information exposed, the company's failure to 
provide reasonable and appropriate security for this information is 
likely to cause consumers substantial injury as described above. That 
substantial injury is not offset by countervailing benefits to 
consumers or competition and is not reasonably avoidable by consumers. 
The complaint alleges that Ceridian's failure to employ reasonable and 
appropriate measures to prevent unauthorized access to sensitive 
personal information is an unfair act or practice, and that the company 
misrepresented that it had implemented such measures, in violation of 
Section 5 of the Federal Trade Commission Act.
    The proposed order applies to personal information that Ceridian 
entities within the Commission's jurisdiction collect from or about 
consumers and employees. It contains provisions designed to prevent 
Ceridian from engaging in the future in practices similar to those 
alleged in the complaint.
    Part I of the proposed order prohibits misrepresentations about the 
privacy, confidentiality, or integrity of personal information 
collected from or about consumers. Part II of the proposed order 
requires Ceridian to establish and maintain a comprehensive information 
security program that is reasonably designed to protect the security, 
confidentiality, and integrity of such information (whether in paper or 
electronic format) about consumers, employees, and those seeking to 
become employees. The security program must contain administrative, 
technical, and physical safeguards appropriate to Ceridian's size and 
complexity, the nature and scope of its activities, and the sensitivity 
of the information collected from or about consumers and employees. 
Specifically, the proposed order requires Ceridian 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, confidentiality, and integrity of personal 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;
     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;
     Develop and use reasonable steps to select and retain 
service providers capable of appropriately safeguarding personal 
information they receive from Ceridian, and require service providers

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by contract to implement and maintain appropriate safeguards; and
     Evaluate and adjust its information security programs in 
light of the results of testing and monitoring, any material changes to 
operations or business arrangements, or any other circumstances that it 
knows or has reason to know may have a material impact on its 
information security program.
    Part III of the proposed order requires Ceridian 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, confidentiality, and integrity 
of sensitive consumer, employee, and job applicant information has been 
protected. Two Ceridian subsidiaries, Ceridian Stored Value Solutions, 
Inc. and Comdata Network Inc., are excluded from this requirement to 
the extent that they do not advertise, market, promote, offer for sale, 
or sell any product or service relating to payroll, taxes, or human 
resources. Part III does not apply to payment cards provided to 
employers by Comdata Network Inc. that are not linked to accounts 
maintained by individual employees. Parts IV through VIII of the 
proposed order are reporting and compliance provisions. Part IV 
requires Ceridian to retain documents relating to its 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, Ceridian 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 all 
current and future subsidiaries, current and future principals, 
officers, directors, and managers, and 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 Ceridian submit a compliance report to the FTC within 60 
days, and periodically thereafter as requested. 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 its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-11183 Filed 5-6-11; 8:45 am]
BILLING CODE 6750-01-P