[Federal Register Volume 81, Number 38 (Friday, February 26, 2016)]
[Notices]
[Pages 9856-9859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04190]


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FEDERAL TRADE COMMISSION

[File No. 142-3156]


ASUSTeK Computer, 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. 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 24, 2016.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/asusconsent online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``ASUSTeK Computer 
Inc.,--Consent Agreement; File No. 142-3156'' on your comment and file 
your comment online at https://ftcpublic.commentworks.com/ftc/asusconsent by following the instructions on the web-based form. If you 
prefer to file your comment on paper, write ``ASUSTeK Computer Inc.,--
Consent Agreement; File No. 142-3156'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Nithan Sannappa (202) 326-3185 or 
Jarad Brown (202) 326-2927, 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 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

[[Page 9857]]

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 23, 2016), on the World Wide Web at: http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before March 24, 2016. 
Write ``ASUSTeK Computer Inc.,--Consent Agreement; File No. 142-3156'' 
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/asusconsent 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 ``ASUSTeK Computer Inc.,--
Consent Agreement; File No. 142-3156'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. 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 March 24, 2016. 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 Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent order applicable to ASUSTeK Computer, Inc. 
(``ASUS'').
    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.
    ASUS is a hardware manufacturer that, among other things, sells 
routers, and related software and services, intended for consumer use. 
Routers forward data packets along a network. In addition to routing 
network traffic, consumer routers typically function as a hardware 
firewall for the local network, and act as the first line of defense in 
protecting consumer devices on the local network, such as computers, 
smartphones, internet-protocol (``IP'') cameras, and other connected 
appliances, against malicious incoming traffic from the internet. ASUS 
marketed its routers as including security features such as ``intrusion 
detection,'' and instructed consumers to ``enable the [router's] 
firewall to protect your local network against attacks from hackers.''
    Many of ASUS's routers also include ``cloud'' software features 
called AiCloud and AiDisk that allow consumers to attach a USB storage 
device to their router and then wirelessly access and share files. ASUS 
publicized AiCloud as a ``private personal cloud for selective file 
sharing'' that featured ``indefinite storage and increased privacy'' 
and described the feature as ``the most complete, accessible, and 
secure cloud platform.'' Similarly, ASUS promoted AiDisk as a way to 
``safely secure and access your treasured data through your router.''
    The Commission's complaint alleges that, despite these 
representations, ASUS engaged in a number of practices that, taken 
together, failed to provide reasonable security in the design and 
maintenance of the software developed for its routers and related 
``cloud'' features. The complaint challenges these failures as both 
deceptive and unfair. Among other things, the complaint alleges that 
ASUS failed to:
    a. Perform security architecture and design reviews to ensure that 
the software is designed securely, including failing to:
    i. Use readily-available secure protocols when designing features 
intended to provide consumers with access to their sensitive personal 
information. For example, ASUS designed the AiDisk feature to use FTP 
rather than a protocol that supports transit encryption;
    ii. implement secure default settings or, at the least, provide 
sufficient information that would ensure that consumers did not 
unintentionally expose sensitive personal information;
    iii. prevent consumers from using weak default login credentials. 
For example, respondent allowed consumers to retain weak default login 
credentials to protect critical functions, such as username ``admin'' 
and password ``admin'' for the admin console, and username ``Family'' 
and

[[Page 9858]]

password ``Family'' for the AiDisk FTP server;
    b. perform reasonable and appropriate code review and testing of 
the software to verify that access to data is restricted consistent 
with a user's privacy and security settings;
    c. perform vulnerability and penetration testing of the software, 
including for well-known and reasonably foreseeable vulnerabilities 
that could be exploited to gain unauthorized access to consumers' 
sensitive personal information and local networks, such as 
authentication bypass, clear-text password disclosure, cross-site 
scripting, cross-site request forgery, and buffer overflow 
vulnerabilities;
    d. implement readily-available, low-cost protections against well-
known and reasonably foreseeable vulnerabilities, as described in (c), 
such as input validation, anti-CSRF tokens, and session time-outs;
    e. maintain an adequate process for receiving and addressing 
security vulnerability reports from third parties such as security 
researchers and academics;
    f. perform sufficient analysis of reported vulnerabilities in order 
to correct or mitigate all reasonably detectable instances of a 
reported vulnerability, such as those elsewhere in the software or in 
future releases; and
    g. provide adequate notice to consumers regarding (i) known 
vulnerabilities or security risks, (ii) steps that consumers could take 
to mitigate such vulnerabilities or risks, and (iii) the availability 
of software updates that would correct or mitigate the vulnerabilities 
or risks.
    The Complaint further alleges that, due to these failures, ASUS has 
subjected its customers to a significant risk that their sensitive 
personal information and local networks will be subject to unauthorized 
access. For example, on or before February 1, 2014, a group of hackers 
exploited vulnerabilities and design flaws in ASUS's routers to gain 
unauthorized access to thousands of consumers' USB storage devices. 
Numerous consumers reported having their routers compromised, and some 
complained that a major search engine had indexed the files that the 
vulnerable routers had exposed, making them easily searchable online. 
Others claimed to be the victims of related identity theft, including a 
consumer who claimed identity thieves had gained unauthorized access to 
his USB storage device, which contained his family's sensitive personal 
information, such as login credentials, social security numbers, dates 
of birth, and tax returns. According to the consumer, the identity 
thieves used this information to make thousands of dollars of 
fraudulent charges to his financial accounts, requiring him to cancel 
accounts and place a fraud alert on his credit report. In addition, in 
April 2015, a malware researcher discovered a large-scale, active 
exploit campaign that reconfigured vulnerable routers so that the 
attackers could control and redirect consumers' web traffic. This 
exploit campaign specifically targeted numerous ASUS router models.
    The proposed consent order contains provisions designed to prevent 
ASUS from engaging in the future in practices similar to those alleged 
in the complaint. Part I of the proposed consent order prohibits ASUS 
from misrepresenting: (1) The extent to which it maintains and protects 
the security of any covered device (including routers), or the 
security, privacy, confidentiality, or integrity of any covered 
information; (2) the extent to which a consumer can use a covered 
device to secure a network; and (3) the extent to which a covered 
device is using up-to-date software.
    Part II of the proposed consent order requires ASUS to establish 
and implement, and thereafter maintain, a comprehensive security 
program that is reasonably designed to (1) address security risks 
related to the development and management of new and existing covered 
devices; and (2) protect the privacy, security, confidentiality, and 
integrity of covered information. The security program must contain 
administrative, technical, and physical safeguards appropriate to 
ASUS's size and complexity, nature and scope of its activities, and the 
sensitivity of the covered device's function or the sensitivity of the 
covered information. Specifically, the proposed order requires ASUS to:
    a. Designate an employee or employees to coordinate and be 
accountable for the information security program;
    b. identify material internal and external risks to the security of 
covered devices that could result in unauthorized access to or 
unauthorized modification of a covered device, and assess the 
sufficiency of any safeguards in place to control these risks;
    c. identify material internal and external risks to the privacy, 
security, confidentiality, and integrity of covered information that 
could result in the unintentional exposure of such information by 
consumers or the unauthorized disclosure, misuse, loss, alteration, 
destruction, or other compromise of such information, and assessment of 
the sufficiency of any safeguards in place to control these risks;
    d. consider risks in each area of relevant operation, including, 
but not limited to: (1) Employee training and management, including in 
secure engineering and defensive programming; (2) product design, 
development, and research; (3) secure software design, development, and 
testing, including for default settings; (4) review, assessment, and 
response to third-party security vulnerability reports, and (5) 
prevention, detection, and response to attacks, intrusions, or systems 
failures;
    e. design and implement reasonable safeguards to control the risks 
identified through risk assessment, including through reasonable and 
appropriate software security testing techniques, and regularly test or 
monitor the effectiveness of the safeguards' key controls, systems, and 
procedures;
    f. develop and use reasonable steps to select and retain service 
providers capable of maintaining security practices consistent with the 
order, and require service providers by contract to implement and 
maintain appropriate safeguards; and
    g. evaluate and adjust its information security program in light of 
the results of testing and monitoring, any material changes to ASUS's 
operations or business arrangement, or any other circumstances that it 
knows or has reason to know may have a material impact on its security 
program.
    Part III of the proposed consent order requires ASUS 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 
consent order; and (2) its security program is operating with 
sufficient effectiveness to provide reasonable assurance that the 
security of covered devices and the privacy, security, confidentiality, 
and integrity of covered information is protected.
    Part IV of the proposed consent order requires ASUS to provide 
clear and conspicuous notice to consumers when a software update for a 
covered device that addresses a security flaw is available or when ASUS 
is aware of reasonable steps that a consumer could take to mitigate a 
security flaw in a covered device. In addition to posting

[[Page 9859]]

notice on its Web site and informing consumers that contact the 
company, ASUS must provide security-related notifications directly to 
consumers. For this purpose, ASUS must provide consumers with an 
opportunity to register an email address, phone number, device, or 
other information during the initial setup or configuration of a 
covered device.
    Parts V through IX of the proposed consent order are reporting and 
compliance provisions. Part V requires ASUS to retain documents 
relating to its compliance with the order. The order requires that 
materials relied upon to prepare the assessments required by Part III 
be retained for a three-year period, and that all other documents 
related to compliance with the order be retained for a five-year 
period. Part VI 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 all current and 
future employees, agents, and representatives having supervisory 
responsibilities relating to the subject matter of the order. Part VII 
ensures notification to the FTC of changes in corporate status. Part 
VIII mandates that ASUS submit a compliance report to the FTC within 60 
days, and periodically thereafter as requested. Part IX is a provision 
``sunsetting'' the order after (20) years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed consent order. It is not intended to constitute an official 
interpretation of the proposed complaint or consent order or to modify 
the consent order's terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-04190 Filed 2-25-16; 8:45 am]
BILLING CODE 6750-01-P