[Federal Register Volume 77, Number 209 (Monday, October 29, 2012)]
[Notices]
[Pages 65550-65552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26464]
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FEDERAL TRADE COMMISSION
[File No. 102 3155]
Compete, 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 November 19, 2012.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/competeincconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Compete, Inc., File
No. 102 3155'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/competeincconsent, 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: Ruth Yodaiken (202-326-2127), 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, 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 October 22, 2012), 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 November 19,
2012. Write ``Compete, Inc., File No. 102 3155'' 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 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/competeincconsent 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 ``Compete, Inc., File No.
102 3155'' 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 November 19, 2012. 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, an agreement containing a consent order applicable to
Compete, Inc. (``Compete'').
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.
Compete develops software for tracking consumers as they shop,
browse and interact with different Web sites across the Internet. As
alleged in the Commission's complaint, Compete
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offered one version of its tracking software as the Compete Toolbar,
which would provide consumers with information about Web sites as they
surfed the web, such as information about the popularity of the Web
sites they visited. Separately, Compete offered consumers membership in
its Consumer Input Panel: Consumers could win rewards while
participating in surveys about products and services. As part of the
registration process for the Consumer Input Panel, consumers would
install tracking software. In addition, Compete licensed its tracking
software to third parties, such as Upromise, Inc., which was the
subject of a recent FTC enforcement action. (See Upromise, Inc.) http://www.ftc.gov/os/caselist/1023116/index.shtm.
The Commission's complaint involves the advertising, marketing and
operation of tracking software. According to the FTC complaint, while
Compete represented to consumers that the various forms of software
would collect information about the Web sites consumers visited, its
failure to disclose the full extent of data collected through tracking
software was deceptive. The complaint alleges that Compete's tracking
software collected the names of all Web sites visited; all links
followed; advertisements displayed when Web sites were visited; and
information that consumers entered into some web pages (e.g., credit
card and financial account numbers, usernames, passwords, and search
terms), including secure web pages.
According to the FTC complaint, Compete misrepresented its privacy
and security practices, including that: (1) It stripped all personal
information out of the data it collected before transmitting it from
consumers' computers; and (2) it employed reasonable and appropriate
measures to protect data gathered from consumers from unauthorized
access. The complaint alleges that these claims were false and thus
violate Section 5 of the FTC Act.
In addition, the FTC complaint alleges that Compete engaged in a
number of practices that, taken together, failed to provide reasonable
and appropriate security for the personal information it collected and
maintained. The complaint alleges that, among other things, Compete:
(1) Transmitted sensitive information from secure web pages, such as
financial account numbers and security codes, in clear readable text;
(2) did not design and implement reasonable safeguards to control risks
to consumer information; and (3) did not use readily available, low-
cost measures to assess and address the risk that its software would
collect sensitive consumer information it was not authorized to
collect.
The complaint alleges that Compete's failure to employ reasonable
and appropriate measures to protect consumer information--including
credit card and financial account numbers, security codes and
expiration dates, and Social Security numbers--was unfair. Tools for
capturing data in transit, for example over unsecured wireless networks
such as those often provided in coffee shops and other public spaces,
are commonly available, making such clear-text data vulnerable to
interception. The misuse of such information--particularly financial
account information and Social Security numbers--can facilitate
identity theft and related consumer harms.
The complaint alleges that after flaws in Compete's data collection
practices were revealed publicly in January 2010, Compete upgraded its
filters, added new algorithms to screen out information such as credit
card numbers, and began encrypting data in transit.
The proposed order contains provisions designed to prevent Compete
from engaging in future practices similar to those alleged in the
complaint. For purposes of the proposed consent order, we call such
tracking software a ``Data Collection Agent.'' \2\
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\2\ ``Data Collection Agent'' is defined in the proposed order
as any software program, including any application; created,
licensed or distributed, directly or through a Third Party, by
respondent; installed on consumers' computers, whether as a
standalone product or as a feature of another product; and used to
record, or transmit information about any activity occurring on that
computer, unless: (a) The activity involves transmission of
information related to the configuration of the software program or
application itself; (b) the transmission is limited to information
about whether the program is functioning as intended; or (c) the
activity involves a consumer's interactions with respondent's Web
sites and/or forms.
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Part I applies to collection and use of data from any Data
Collection Agent, whether already downloaded or to be downloaded in the
future, and is tailored to address distribution by both Compete and
third parties. Specifically Parts I.A. and B. of the proposed order
apply to Data Collection Agents installed after the date of service of
the order. Part I.A. prohibits Compete from collecting data through a
Data Collection Agent unless a consumer has given express affirmative
consent to such collection, after being provided with a separate, clear
and prominent notice about all the types of information that will be
collected, as well as a description of how the information is to be
used, including any sharing with third parties. Part I.B. ensures these
same protections apply when a Data Collection Agent is made available
by a third party, and requires that Compete must either provide notice
and obtain consent, or require the third party to do so and monitor the
third party's compliance. In addition, Parts I.C. and D. of the
proposed order limit the collection and use of data from consumers who
already have downloaded a Data Collection Agent (i.e., before the date
of service of the order) to aggregate and anonymous data, absent notice
and affirmative express consent. Part I.E. requires Compete to obtain
express affirmative consent before it can make any material changes to
its practices for collection or sharing of personal information.
Part II.A. of the proposed order requires Compete to provide
corrective notice to consumers who had previously installed a Data
Collection Agent. Compete must inform consumers about the categories of
personal information collected and transmitted by the software, and how
to uninstall it. Part II.B. requires the company to provide for two
years phone and email support to assist consumers who seek to disable
or uninstall a Data Collection Agent.
Part III of the proposed order requires Compete to provide a copy
of the order to third parties with whom it has now, or will have in the
future, any agreement in connection with any Data Collection Agent made
available by the third party.
Part IV of the proposed order prohibits the company from making any
misrepresentations about the extent to which it maintains and protects
the security, privacy, confidentiality, or integrity of any information
collected from or about consumers.
Part V of the proposed order requires Compete to maintain a
comprehensive information security program that is reasonably designed
to protect the security, confidentiality, and integrity of information
(whether in paper or electronic format) about consumers. The security
program must contain administrative, technical, and physical safeguards
appropriate to Compete's size and complexity, the nature and scope of
its activities, and the sensitivity of the information. Specifically,
the proposed order requires Compete 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
[[Page 65552]]
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 Compete or obtain on behalf of Compete,
and require service providers 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 VI of the proposed order requires Compete to obtain within 180
days after service of the order, and biennially thereafter for 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 the proposed order; and
(2) its security program is operating with sufficient effectiveness to
provide reasonable assurance that the security, confidentiality, and
integrity of personal information is protected and has so operated
throughout the reporting period.
Part VII requires Compete to destroy all consumer data collected by
a Data Collection Agent before February 2010.
Part VIII requires Compete to retain documents relating to its
compliance with the order. Part IX requires that it deliver copies of
the order to persons with responsibilities relating to the subject
matter of the order. Parts X, XI, and XII of the proposed order are
further reporting and compliance provisions. Part X ensures
notification to the FTC of changes in corporate status. Part XI
mandates that Compete submit a compliance report to the FTC within 60
days, and periodically thereafter as requested. Part XII provides that
the order will terminate after 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
proposed order's terms in any way.
By direction of the Commission, Commissioner Rosch abstaining.
Donald S. Clark,
Secretary.
[FR Doc. 2012-26464 Filed 10-26-12; 8:45 am]
BILLING CODE 6750-01-P