[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

[[Page 65551]]

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

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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