81 FR 9856 - ASUSTeK Computer, Inc.; Analysis of Proposed Consent Order To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 38 (February 26, 2016)

Page Range		9856-9859
FR Document		2016-04190

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.

Federal Register, Volume 81 Issue 38 (Friday, February 26, 2016)

[Federal Register Volume 81, Number 38 (Friday, February 26, 2016)]
[Notices]
[Pages 9856-9859]
From the Federal Register Online [www.thefederalregister.org]
[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

Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Notices 9859

notice on its Web site and informing SUMMARY: This notice announces that a & Medicaid Services, 7500 Security
consumers that contact the company, public meeting of the Medicare Boulevard, Baltimore, MD 21244.
ASUS must provide security-related Evidence Development & Coverage Submission of Presentations and
notifications directly to consumers. For Advisory Committee (MEDCAC) Comments: Presentation materials and
this purpose, ASUS must provide (‘‘Committee’’) will be held on written comments that will be presented
consumers with an opportunity to Wednesday, April 27, 2016. This at the meeting must be submitted via
register an email address, phone meeting will specifically focus on email to MedCACpresentations@
number, device, or other information obtaining the MEDCAC’s cms.hhs.gov or by regular mail to the
during the initial setup or configuration recommendations regarding the contact listed in the FOR FURTHER
of a covered device. definition of treatment resistant INFORMATION CONTACT section of this
Parts V through IX of the proposed depression (TRD) as well as to advise notice by the date specified in the DATES
consent order are reporting and CMS on the use of the definition of TRD section of this notice.
compliance provisions. Part V requires in the context of coverage with evidence FOR FURTHER INFORMATION CONTACT:
ASUS to retain documents relating to its development and treatment outcomes. Maria Ellis, Executive Secretary for
compliance with the order. The order This meeting is open to the public in MEDCAC, Centers for Medicare &
requires that materials relied upon to accordance with the Federal Advisory Medicaid Services, Center for Clinical
prepare the assessments required by Committee Act (5 U.S.C. App. 2, section Standards and Quality, Coverage and
Part III be retained for a three-year 10(a)). Analysis Group, S3–02–01, 7500
period, and that all other documents DATES: Meeting Date: The public Security Boulevard, Baltimore, MD
related to compliance with the order be meeting will be held on Wednesday, 21244 or contact Ms. Ellis by phone
retained for a five-year period. Part VI April 27, 2016 from 7:30 a.m. until 4:30 (410–786–0309) or via email at
requires dissemination of the order now p.m., Eastern Daylight Time (EDT). Maria.Ellis@cms.hhs.gov.
and in the future to all current and Deadline for Submission of Written SUPPLEMENTARY INFORMATION:
future subsidiaries, current and future Comments: Written comments must be
principals, officers, directors, and received at the address specified in the I. Background
managers, and to all current and future ADDRESSES section of this notice by 5:00 MEDCAC, formerly known as the
employees, agents, and representatives p.m., EDT, Monday, March 28, 2016. Medicare Coverage Advisory Committee
having supervisory responsibilities Once submitted, all comments are final. (MCAC), is advisory in nature, with all
relating to the subject matter of the Deadlines for Speaker Registration final coverage decisions resting with
order. Part VII ensures notification to and Presentation Materials: The CMS. MEDCAC is used to supplement
the FTC of changes in corporate status. deadline to register to be a speaker and CMS’ internal expertise. Accordingly,
Part VIII mandates that ASUS submit a to submit PowerPoint presentation the advice rendered by the MEDCAC is
compliance report to the FTC within 60 materials and writings that will be used most useful when it results from a
days, and periodically thereafter as in support of an oral presentation is 5:00 process of full scientific inquiry and
requested. Part IX is a provision p.m., EDT on Monday, March 28, 2016. thoughtful discussion, in an open
‘‘sunsetting’’ the order after (20) years, Speakers may register by phone or via forum, with careful framing of
with certain exceptions. email by contacting the person listed in recommendations and clear
The purpose of this analysis is to the FOR FURTHER INFORMATION CONTACT identification of the basis of those
facilitate public comment on the section of this notice. Presentation recommendations. MEDCAC members
proposed consent order. It is not materials must be received at the are valued for their background,
intended to constitute an official address specified in the ADDRESSES education, and expertise in a wide
interpretation of the proposed section of this notice. variety of scientific, clinical, and other
complaint or consent order or to modify Deadline for All Other Attendees related fields. (For more information on
the consent order’s terms in any way. Registration: Individuals may register MCAC, see the MEDCAC Charter
By direction of the Commission. online at http://www.cms.gov/apps/ (http://www.cms.gov/Regulations-and-
Donald S. Clark, events/upcomingevents.asp?strOrder Guidance/Guidance/FACA/Downloads/
Secretary.
By=1&type=3 or by phone by contacting medcaccharter.pdf) and the CMS
the person listed in the FOR FURTHER Guidance Document, Factors CMS
[FR Doc. 2016–04190 Filed 2–25–16; 8:45 am]
INFORMATION CONTACT section of this Considers in Referring Topics to the
BILLING CODE 6750–01–P
notice by 5:00 p.m. EDT, Wednesday, MEDCAC (http://www.cms.gov/
April 20, 2016. medicare-coverage-database/details/
We will be broadcasting the meeting medicare-coverage-document-
DEPARTMENT OF HEALTH AND live via Webcast at http://www.cms.gov/ details.aspx?MCDId=10)).
HUMAN SERVICES live/.
Deadline for Submitting a Request for II. Meeting Topic and Format
Centers for Medicare & Medicaid Special Accommodations: Persons This notice announces the
Services attending the meeting who are hearing Wednesday, April 27, 2016, public
or visually impaired, or have a meeting of the Committee. During this
[CMS–3331–N] condition that requires special meeting, the Committee will discuss
assistance or accommodations, are recommendations regarding the
Medicare Program; Meeting of the asked to contact the Executive Secretary
mstockstill on DSK4VPTVN1PROD with NOTICES

definition of treatment resistant
Medicare Evidence Development and as specified in the FOR FURTHER depression (TRD) and provide advice to
Coverage Advisory Committee—April INFORMATION CONTACT section of this CMS on the use of the definition of TRD
27, 2016 notice no later than 5:00 p.m., EDT in the context of coverage with evidence
Friday, April 1, 2016. development and treatment outcomes.
AGENCY: Centers for Medicare &
Medicaid Services (CMS), HHS. ADDRESSES: Meeting Location: The Background information about this
meeting will be held in the main topic, including panel materials, is
ACTION: Notice of meeting.
auditorium of the Centers for Medicare available at http://www.cms.gov/

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Document Created: 2018-02-02 14:36:49
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Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed Consent Agreement.
Dates		Comments must be received on or before March 24, 2016.
Contact		Nithan Sannappa (202) 326-3185 or Jarad Brown (202) 326-2927, Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		81 FR 9856