83_FR_19849 83 FR 19762 - BLU Products, Inc.; Analysis to Aid Public Comment

83 FR 19762 - BLU Products, Inc.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 83, Issue 87 (May 4, 2018)

Page Range19762-19764
FR Document2018-09545

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 complaint and the terms of the consent order-- embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 83 Issue 87 (Friday, May 4, 2018)
[Federal Register Volume 83, Number 87 (Friday, May 4, 2018)]
[Notices]
[Pages 19762-19764]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-09545]


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FEDERAL TRADE COMMISSION

[File No. 172 3025]


BLU Products, Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

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 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 May 30, 2018.

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: ``BLU Products, Inc.'' 
on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/bluproductsconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``BLU Products, Inc.'' 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: 
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: Jah-Juin Ho (202-326-3463) and Ryan 
Mehm (202-326-2918), 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 April 30, 2018), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before May 30, 2018. 
Write ``BLU Products, Inc.'' 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 website, at https://www.ftc.gov/policy/public-comments.
    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/bluproductsconsent 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 website.
    If you prefer to file your comment on paper, write ``BLU Products, 
Inc.'' 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.
    Because your comment will be placed on the publicly accessible FTC 
website at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website 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 May 30, 2018. For information on the Commission's 
privacy policy, including routine uses permitted by the Privacy Act, 
see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to

[[Page 19763]]

final approval, an agreement containing a consent order from BLU 
Products, Inc. (``BLU'') and individual Respondent Samuel Ohev-Zion 
(collectively, ``Respondents'').
    The proposed consent order (``proposed 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 again 
will review the agreement and the comments received, and will decide 
whether it should withdraw from the agreement or make final the 
agreement's proposed order.
    BLU is a mobile device manufacturer that sells smartphone and other 
mobile devices to consumers through retailers such as Amazon, Walmart, 
and Best Buy. Samuel Ohev-Zion is an owner and the President and CEO of 
BLU. Individually or in concert with others, Mr. Ohev-Zion controlled 
or had authority to control, or participated in the acts and practices 
alleged in the proposed complaint.
    Respondents purchase the smartphones they sell to consumers from 
Original Device Manufacturers (``ODMs''). ODMs manufacture and 
customize mobile devices branded with the BLU name based on 
instructions provided by Respondents. As part of this process, since at 
least 2015, in order to provide firmware updating services, BLU has 
licensed software from ADUPS Technology Co., LTD (``ADUPS'') and 
directed ODMs to preinstall this software on Respondents' mobile 
devices.
    ADUPS is a China-based company that offers advertising, data 
mining, and firmware over-the-air (``FOTA'') update services to mobile 
and Internet of Things connected devices. FOTA updates allow device 
manufacturers to issue security patches or operating system upgrades to 
devices over wireless and cellular networks.
    Until at least November 2016 the ADUPS software on BLU devices 
transmitted personal information about consumers to ADUPS' servers 
without consumers' knowledge and consent, including the full contents 
of text messages, real-time cellular tower location data, call and text 
message logs with full telephone numbers, contact lists, and a list of 
applications used and installed on each device. ADUPS software 
collected and transmitted consumers' text messages to its servers every 
72 hours. ADUPS software also collected consumers' location data in 
real-time and transmitted this data back to its servers every 24 hours.
    The Commission's proposed two-count complaint alleges that 
Respondents violated Section 5(a) of the Federal Trade Commission Act. 
The first count alleges that Respondents deceived consumers about BLU's 
data collection and sharing practices by falsely representing in BLU's 
privacy policy that they limit the disclosure of users' information to 
third-party service providers only to the extent necessary to perform 
their services or functions on behalf of BLU and not for other 
purposes. Contrary to the privacy policy, personal information from BLU 
devices sold by Respondents was transmitted to ADUPS that was not 
needed to perform its services or functions on behalf of BLU, including 
FOTA updates.
    The second count alleges that Respondents deceived consumers about 
BLU's data security practices by falsely representing that they 
implemented appropriate physical, electronic, and managerial security 
procedures to protect the personal information provided by consumers. 
The proposed complaint alleges that Respondents did not implement 
appropriate physical, electronic and managerial security procedures. 
For example, the proposed complaint alleges that Respondents failed to 
implement appropriate security procedures to oversee the security 
practices of their service providers, such as by: (1) Failing to 
perform adequate due diligence in the selection and retention of 
service providers; (2) failing to adopt and implement written data 
security standards, policies, procedures or practices that apply to the 
oversight of their service providers; (3) failing to contractually 
require their service providers to adopt and implement data security 
standards, policies, procedures or practices; and (4) failing to 
adequately assess the privacy and security risks of third-party 
software, such as ADUPS.
    The proposed order contains provisions designed to prevent 
Respondents from engaging in the same or similar acts or practices in 
the future.
    Part I of the proposed order prohibits Respondents from 
misrepresenting: (1) The extent to which they collect, use, share, or 
disclose any personal information; (2) the extent to which consumers 
may exercise control over the collection, use, or disclosure of 
personal information; and (3) the extent to which the implement 
physical, electronic, and managerial security procedures to protect 
personal information.
    Part II of the proposed order requires Respondents 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 security, confidentiality, and integrity of personal 
information. The program must be fully documented in writing and must 
contain administrative, technical, and physical safeguards appropriate 
to Respondents' size and complexity, the nature and scope of 
Respondents' activities, and the sensitivity of the covered device's 
function or the personal information.
    Part III of the proposed order requires Respondents to obtain an 
assessment and report from a qualified, objective, independent third-
party professional covering the first one hundred eighty (180) days 
after issuance of the order and each 2-year period thereafter for 20 
years after issuance of the order. Each assessment must, among other 
things: (1) Set forth the administrative, technical, and physical 
safeguards that Respondents have implemented during the reporting 
period; (2) explain how such safeguards are appropriate to Respondents' 
size and complexity, the nature and scope of Respondents' activities, 
and the sensitivity of the covered device's function or the personal 
information; (3) explain how the safeguards implemented meet or exceed 
the protections required by Part II of the proposed order; and (4) 
certify that Respondents' 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 personal information is protected.
    Part IV of the proposed order requires Respondents, prior to 
collecting or disclosing any covered information, to: (A) Clearly and 
conspicuously disclose to the consumer, separate and apart from 
``privacy policy,'' ``terms of use'' page, or similar document, (1) the 
categories of covered information that Respondents collect, use, or 
share, (2) the identity of any third parties that receive any covered 
information, and (3) all purposes for Respondents' collection, use, or 
sharing of covered information; and (B) obtain the consumer's 
affirmative express consent.
    Parts V through IX of the proposed order are reporting and 
compliance provisions. Part V requires acknowledgment of the order and 
dissemination of the order now and in the future to persons with 
supervisory responsibilities and all employees, agents, and 
representatives who participate in conducted relating to the subject 
matter of the order. Part VI

[[Page 19764]]

ensures notification to the FTC of changes in corporate status and 
mandates that Respondents submit an initial compliance report to the 
FTC. Part VII requires Respondents to retain documents relating to its 
compliance with the order for a five (5) year period. Part VIII 
mandates that Respondents make available to the FTC information or 
subsequent compliance reports, as requested. Part IX is a provision 
``sunsetting'' the order after twenty (20) years, with certain 
exceptions.
    The purpose of this analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the complaint or proposed order, or to modify in any 
way the proposed order's terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018-09545 Filed 5-3-18; 8:45 am]
 BILLING CODE 6750-01-P



                                             19762                             Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices

                                             nonbank subsidiary, Masonry Capital                     Commission Act, 15 U.S.C. 46(f), and                  information, such as your or anyone
                                             Management, LLC, Charlottesville,                       FTC Rule 2.34, 16 CFR 2.34, notice is                 else’s Social Security number; date of
                                             Virginia in financial and investment                    hereby given that the above-captioned                 birth; driver’s license number or other
                                             advisory activities and private                         consent agreement containing a consent                state identification number, or foreign
                                             placement services pursuant to section                  order to cease and desist, having been                country equivalent; passport number;
                                             225.28(b)(6)(i) and 225.28(b)(7)(iii) of                filed with and accepted, subject to final             financial account number; or credit or
                                             Regulation Y.                                           approval, by the Commission, has been                 debit card number. You are also solely
                                               Board of Governors of the Federal Reserve             placed on the public record for a period              responsible for making sure that your
                                             System, May 1, 2018.                                    of thirty (30) days. The following                    comment does not include any sensitive
                                             Yao-Chin Chao,                                          Analysis to Aid Public Comment                        health information, such as medical
                                                                                                     describes the terms of the consent                    records or other individually
                                             Assistant Secretary of the Board.
                                                                                                     agreement, and the allegations in the                 identifiable health information. In
                                             [FR Doc. 2018–09517 Filed 5–3–18; 8:45 am]
                                                                                                     complaint. An electronic copy of the                  addition, your comment should not
                                             BILLING CODE P                                          full text of the consent agreement                    include any ‘‘trade secret or any
                                                                                                     package can be obtained from the FTC                  commercial or financial information
                                                                                                     Home Page (for April 30, 2018), on the                which . . . is privileged or
                                             FEDERAL TRADE COMMISSION                                World Wide Web, at https://                           confidential’’—as provided by Section
                                             [File No. 172 3025]                                     www.ftc.gov/news-events/commission-                   6(f) of the FTC Act, 15 U.S.C. 46(f), and
                                                                                                     actions.                                              FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
                                             BLU Products, Inc.; Analysis to Aid                        You can file a comment online or on                including in particular competitively
                                             Public Comment                                          paper. For the Commission to consider                 sensitive information such as costs,
                                                                                                     your comment, we must receive it on or                sales statistics, inventories, formulas,
                                             AGENCY:    Federal Trade Commission.                    before May 30, 2018. Write ‘‘BLU                      patterns, devices, manufacturing
                                             ACTION:   Proposed Consent Agreement.                   Products, Inc.’’ on your comment. Your                processes, or customer names.
                                                                                                     comment—including your name and                          Comments containing material for
                                             SUMMARY:   The consent agreement in this                your state—will be placed on the public               which confidential treatment is
                                             matter settles alleged violations of                    record of this proceeding, including, to              requested must be filed in paper form,
                                             federal law prohibiting unfair or                       the extent practicable, on the public                 must be clearly labeled ‘‘Confidential,’’
                                             deceptive acts or practices. The attached               Commission website, at https://                       and must comply with FTC Rule 4.9(c).
                                             Analysis to Aid Public Comment                          www.ftc.gov/policy/public-comments.                   In particular, the written request for
                                             describes both the allegations in the                      Postal mail addressed to the                       confidential treatment that accompanies
                                             complaint and the terms of the consent                  Commission is subject to delay due to                 the comment must include the factual
                                             order—embodied in the consent                           heightened security screening. As a                   and legal basis for the request, and must
                                             agreement—that would settle these                       result, we encourage you to submit your               identify the specific portions of the
                                             allegations.                                            comments online. To make sure that the                comment to be withheld from the public
                                             DATES:  Comments must be received on                    Commission considers your online                      record. See FTC Rule 4.9(c). Your
                                             or before May 30, 2018.                                 comment, you must file it at https://                 comment will be kept confidential only
                                             ADDRESSES: Interested parties may file a                ftcpublic.commentworks.com/ftc/                       if the General Counsel grants your
                                             comment online or on paper, by                          bluproductsconsent by following the                   request in accordance with the law and
                                             following the instructions in the                       instructions on the web-based form. If                the public interest. Once your comment
                                             Request for Comment part of the                         this Notice appears at http://                        has been posted on the public FTC
                                             SUPPLEMENTARY INFORMATION section
                                                                                                     www.regulations.gov/#!home, you also                  website—as legally required by FTC
                                             below. Write: ‘‘BLU Products, Inc.’’ on                 may file a comment through that                       Rule 4.9(b)—we cannot redact or
                                             your comment, and file your comment                     website.                                              remove your comment from the FTC
                                                                                                        If you prefer to file your comment on              website, unless you submit a
                                             online at https://
                                                                                                     paper, write ‘‘BLU Products, Inc.’’ on                confidentiality request that meets the
                                             ftcpublic.commentworks.com/ftc/
                                                                                                     your comment and on the envelope, and                 requirements for such treatment under
                                             bluproductsconsent by following the
                                                                                                     mail your comment to the following                    FTC Rule 4.9(c), and the General
                                             instructions on the web-based form. If                  address: Federal Trade Commission,
                                             you prefer to file your comment on                                                                            Counsel grants that request.
                                                                                                     Office of the Secretary, 600                             Visit the FTC website at http://
                                             paper, write ‘‘BLU Products, Inc.’’ on                  Pennsylvania Avenue NW, Suite CC–                     www.ftc.gov to read this Notice and the
                                             your comment and on the envelope, and                   5610 (Annex D), Washington, DC 20580;                 news release describing it. The FTC Act
                                             mail your comment to the following                      or deliver your comment to the                        and other laws that the Commission
                                             address: Federal Trade Commission,                      following address: Federal Trade                      administers permit the collection of
                                             Office of the Secretary, 600                            Commission, Office of the Secretary,                  public comments to consider and use in
                                             Pennsylvania Avenue NW, Suite CC–                       Constitution Center, 400 7th Street SW,               this proceeding, as appropriate. The
                                             5610 (Annex D), Washington, DC 20580;                   5th Floor, Suite 5610 (Annex D),                      Commission will consider all timely
                                             or deliver your comment to: Federal                     Washington, DC 20024. If possible,                    and responsive public comments that it
                                             Trade Commission, Office of the                         submit your paper comment to the                      receives on or before May 30, 2018. For
                                             Secretary, Constitution Center, 400 7th                 Commission by courier or overnight                    information on the Commission’s
                                             Street SW, 5th Floor, Suite 5610 (Annex                 service.                                              privacy policy, including routine uses
                                             D), Washington, DC 20024.                                  Because your comment will be placed                permitted by the Privacy Act, see
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                                             FOR FURTHER INFORMATION CONTACT: Jah-                   on the publicly accessible FTC website                https://www.ftc.gov/site-information/
                                             Juin Ho (202–326–3463) and Ryan                         at https://www.ftc.gov, you are solely                privacy-policy.
                                             Mehm (202–326–2918), Bureau of                          responsible for making sure that your
                                             Consumer Protection, 600 Pennsylvania                   comment does not include any sensitive                Analysis of Proposed Consent Order to
                                             Avenue NW, Washington, DC 20580.                        or confidential information. In                       Aid Public Comment
                                             SUPPLEMENTARY INFORMATION: Pursuant                     particular, your comment should not                      The Federal Trade Commission
                                             to Section 6(f) of the Federal Trade                    include any sensitive personal                        (‘‘Commission’’) has accepted, subject to


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                                                                               Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices                                            19763

                                             final approval, an agreement containing                    The Commission’s proposed two-                     comprehensive security program that is
                                             a consent order from BLU Products, Inc.                 count complaint alleges that                          reasonably designed to: (1) Address
                                             (‘‘BLU’’) and individual Respondent                     Respondents violated Section 5(a) of the              security risks related to the
                                             Samuel Ohev-Zion (collectively,                         Federal Trade Commission Act. The                     development and management of new
                                             ‘‘Respondents’’).                                       first count alleges that Respondents                  and existing covered devices, and (2)
                                                The proposed consent order                           deceived consumers about BLU’s data                   protect the security, confidentiality, and
                                             (‘‘proposed order’’) has been placed on                 collection and sharing practices by                   integrity of personal information. The
                                             the public record for thirty (30) days for              falsely representing in BLU’s privacy                 program must be fully documented in
                                             receipt of comments by interested                       policy that they limit the disclosure of              writing and must contain
                                             persons. Comments received during this                  users’ information to third-party service             administrative, technical, and physical
                                             period will become part of the public                   providers only to the extent necessary to             safeguards appropriate to Respondents’
                                             record. After thirty (30) days, the                     perform their services or functions on                size and complexity, the nature and
                                             Commission again will review the                        behalf of BLU and not for other                       scope of Respondents’ activities, and the
                                             agreement and the comments received,                    purposes. Contrary to the privacy                     sensitivity of the covered device’s
                                             and will decide whether it should                       policy, personal information from BLU                 function or the personal information.
                                             withdraw from the agreement or make                     devices sold by Respondents was                          Part III of the proposed order requires
                                             final the agreement’s proposed order.                   transmitted to ADUPS that was not                     Respondents to obtain an assessment
                                                BLU is a mobile device manufacturer                  needed to perform its services or                     and report from a qualified, objective,
                                             that sells smartphone and other mobile                  functions on behalf of BLU, including                 independent third-party professional
                                             devices to consumers through retailers                  FOTA updates.                                         covering the first one hundred eighty
                                             such as Amazon, Walmart, and Best                          The second count alleges that                      (180) days after issuance of the order
                                             Buy. Samuel Ohev-Zion is an owner and                   Respondents deceived consumers about                  and each 2-year period thereafter for 20
                                             the President and CEO of BLU.                           BLU’s data security practices by falsely              years after issuance of the order. Each
                                             Individually or in concert with others,                 representing that they implemented                    assessment must, among other things:
                                             Mr. Ohev-Zion controlled or had                         appropriate physical, electronic, and                 (1) Set forth the administrative,
                                             authority to control, or participated in                managerial security procedures to                     technical, and physical safeguards that
                                             the acts and practices alleged in the                   protect the personal information                      Respondents have implemented during
                                             proposed complaint.                                     provided by consumers. The proposed                   the reporting period; (2) explain how
                                                                                                     complaint alleges that Respondents did                such safeguards are appropriate to
                                                Respondents purchase the
                                                                                                     not implement appropriate physical,                   Respondents’ size and complexity, the
                                             smartphones they sell to consumers
                                                                                                     electronic and managerial security                    nature and scope of Respondents’
                                             from Original Device Manufacturers
                                                                                                     procedures. For example, the proposed                 activities, and the sensitivity of the
                                             (‘‘ODMs’’). ODMs manufacture and
                                                                                                     complaint alleges that Respondents                    covered device’s function or the
                                             customize mobile devices branded with
                                                                                                     failed to implement appropriate security              personal information; (3) explain how
                                             the BLU name based on instructions
                                                                                                     procedures to oversee the security                    the safeguards implemented meet or
                                             provided by Respondents. As part of
                                                                                                     practices of their service providers, such            exceed the protections required by Part
                                             this process, since at least 2015, in order             as by: (1) Failing to perform adequate                II of the proposed order; and (4) certify
                                             to provide firmware updating services,                  due diligence in the selection and                    that Respondents’ security program is
                                             BLU has licensed software from ADUPS                    retention of service providers; (2) failing           operating with sufficient effectiveness to
                                             Technology Co., LTD (‘‘ADUPS’’) and                     to adopt and implement written data                   provide reasonable assurance that the
                                             directed ODMs to preinstall this                        security standards, policies, procedures              security of covered devices and the
                                             software on Respondents’ mobile                         or practices that apply to the oversight              privacy, security, confidentiality, and
                                             devices.                                                of their service providers; (3) failing to            integrity of personal information is
                                                ADUPS is a China-based company                       contractually require their service                   protected.
                                             that offers advertising, data mining, and               providers to adopt and implement data                    Part IV of the proposed order requires
                                             firmware over-the-air (‘‘FOTA’’) update                 security standards, policies, procedures              Respondents, prior to collecting or
                                             services to mobile and Internet of                      or practices; and (4) failing to                      disclosing any covered information, to:
                                             Things connected devices. FOTA                          adequately assess the privacy and                     (A) Clearly and conspicuously disclose
                                             updates allow device manufacturers to                   security risks of third-party software,               to the consumer, separate and apart
                                             issue security patches or operating                     such as ADUPS.                                        from ‘‘privacy policy,’’ ‘‘terms of use’’
                                             system upgrades to devices over                            The proposed order contains                        page, or similar document, (1) the
                                             wireless and cellular networks.                         provisions designed to prevent                        categories of covered information that
                                                Until at least November 2016 the                     Respondents from engaging in the same                 Respondents collect, use, or share, (2)
                                             ADUPS software on BLU devices                           or similar acts or practices in the future.           the identity of any third parties that
                                             transmitted personal information about                     Part I of the proposed order prohibits             receive any covered information, and (3)
                                             consumers to ADUPS’ servers without                     Respondents from misrepresenting: (1)                 all purposes for Respondents’
                                             consumers’ knowledge and consent,                       The extent to which they collect, use,                collection, use, or sharing of covered
                                             including the full contents of text                     share, or disclose any personal                       information; and (B) obtain the
                                             messages, real-time cellular tower                      information; (2) the extent to which                  consumer’s affirmative express consent.
                                             location data, call and text message logs               consumers may exercise control over                      Parts V through IX of the proposed
                                             with full telephone numbers, contact                    the collection, use, or disclosure of                 order are reporting and compliance
                                             lists, and a list of applications used and              personal information; and (3) the extent              provisions. Part V requires
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                                             installed on each device. ADUPS                         to which the implement physical,                      acknowledgment of the order and
                                             software collected and transmitted                      electronic, and managerial security                   dissemination of the order now and in
                                             consumers’ text messages to its servers                 procedures to protect personal                        the future to persons with supervisory
                                             every 72 hours. ADUPS software also                     information.                                          responsibilities and all employees,
                                             collected consumers’ location data in                      Part II of the proposed order requires             agents, and representatives who
                                             real-time and transmitted this data back                Respondents to establish and                          participate in conducted relating to the
                                             to its servers every 24 hours.                          implement, and thereafter maintain, a                 subject matter of the order. Part VI


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                                             19764                             Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices

                                             ensures notification to the FTC of                      Washington, DC 20580, or deliver your                 Washington, DC 20580, or deliver your
                                             changes in corporate status and                         comment to the following address:                     comment to the following address:
                                             mandates that Respondents submit an                     Federal Trade Commission, Office of the               Federal Trade Commission, Office of the
                                             initial compliance report to the FTC.                   Secretary, Constitution Center, 400 7th               Secretary, Constitution Center, 400 7th
                                             Part VII requires Respondents to retain                 Street SW, 5th Floor, Suite 5610 (Annex               Street SW, 5th Floor, Suite 5610 (Annex
                                             documents relating to its compliance                    D), Washington, DC 20024.                             D), Washington, DC. 20024. If possible,
                                             with the order for a five (5) year period.              FOR FURTHER INFORMATION CONTACT: Kari                 submit your paper comment to the
                                             Part VIII mandates that Respondents                     Wallace (202–326–3085), Bureau of                     Commission by courier or overnight
                                             make available to the FTC information                   Competition, 600 Pennsylvania Avenue                  service.
                                             or subsequent compliance reports, as                    NW, Washington, DC 20580.                                Because your comment will be placed
                                             requested. Part IX is a provision                                                                             on the publicly accessible FTC website
                                                                                                     SUPPLEMENTARY INFORMATION: Pursuant
                                             ‘‘sunsetting’’ the order after twenty (20)                                                                    at https://www.ftc.gov, you are solely
                                                                                                     to Section 6(f) of the Federal Trade
                                             years, with certain exceptions.                                                                               responsible for making sure that your
                                                                                                     Commission Act, 15 U.S.C. 46(f), and
                                                The purpose of this analysis is to aid                                                                     comment does not include any sensitive
                                                                                                     FTC Rule 2.34, 16 CFR 2.34, notice is
                                             public comment on the proposed order.                                                                         or confidential information. In
                                                                                                     hereby given that the above-captioned
                                             It is not intended to constitute an                                                                           particular, your comment should not
                                                                                                     consent agreement containing consent                  include any sensitive personal
                                             official interpretation of the complaint                orders to divest and providing for other
                                             or proposed order, or to modify in any                                                                        information, such as your or anyone
                                                                                                     relief to resolve the allegations in the              else’s Social Security number; date of
                                             way the proposed order’s terms.                         complaint, having been filed with and                 birth; driver’s license number or other
                                               By direction of the Commission.                       accepted, subject to final approval, by               state identification number, or foreign
                                             Donald S. Clark,                                        the Commission, has been placed on the                country equivalent; passport number;
                                             Secretary.                                              public record for a period of thirty (30)             financial account number; or credit or
                                             [FR Doc. 2018–09545 Filed 5–3–18; 8:45 am]              days. The following Analysis to Aid                   debit card number. You are also solely
                                             BILLING CODE 6750–01–P                                  Public Comment describes the terms of                 responsible for making sure that your
                                                                                                     the consent agreement, and the                        comment does not include any sensitive
                                                                                                     allegations in the complaint. An                      health information, such as medical
                                             FEDERAL TRADE COMMISSION                                electronic copy of the full text of the               records or other individually
                                                                                                     consent agreement package can be                      identifiable health information. In
                                             [File No. 181 0017]
                                                                                                     obtained from the FTC Home Page (for                  addition, your comment should not
                                             Amneal Holdings, LLC, and Impax                         April 27, 2018), on the World Wide                    include any ‘‘trade secret or any
                                             Laboratories, Inc.; Analysis to Aid                     Web, at https://www.ftc.gov/news-                     commercial or financial information
                                             Public Comment                                          events/commission-actions.                            which . . . is privileged or
                                                                                                        You can file a comment online or on                confidential’’—as provided by Section
                                             AGENCY:    Federal Trade Commission.                    paper. For the Commission to consider                 6(f) of the FTC Act, 15 U.S.C. 46(f), and
                                             ACTION:   Proposed Consent Agreement.                   your comment, we must receive it on or                FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
                                                                                                     before May 29, 2018. Write ‘‘In the                   including in particular competitively
                                             SUMMARY:    The consent agreement in this               Matter of Amneal Holdings, LLC, and
                                             matter settles alleged violations of                                                                          sensitive information such as costs,
                                                                                                     Impax Laboratories, Inc.; File No. 181                sales statistics, inventories, formulas,
                                             federal law prohibiting unfair methods                  0017’’ on your comment. Your
                                             of competition. The attached Analysis to                                                                      patterns, devices, manufacturing
                                                                                                     comment—including your name and                       processes, or customer names.
                                             Aid Public Comment describes both the                   your state—will be placed on the public                  Comments containing material for
                                             allegations in the complaint and the                    record of this proceeding, including, to              which confidential treatment is
                                             terms of the consent order—embodied                     the extent practicable, on the public                 requested must be filed in paper form,
                                             in the consent agreement—that would                     Commission website, at https://                       must be clearly labeled ‘‘Confidential,’’
                                             settle these allegations.                               www.ftc.gov/policy/public-comments.                   and must comply with FTC Rule 4.9(c).
                                             DATES: Comments must be received on                        Postal mail addressed to the                       In particular, the written request for
                                             or before May 29, 2018.                                 Commission is subject to delay due to                 confidential treatment that accompanies
                                             ADDRESSES: Interested parties may file a                heightened security screening. As a                   the comment must include the factual
                                             comment online or on paper, by                          result, we encourage you to submit your               and legal basis for the request, and must
                                             following the instructions in the                       comments online. To make sure that the                identify the specific portions of the
                                             Request for Comment part of the                         Commission considers your online                      comment to be withheld from the public
                                             SUPPLEMENTARY INFORMATION section                       comment, you must file it at https://                 record. See FTC Rule 4.9(c). Your
                                             below. Write: ‘‘In the Matter of Amneal                 ftcpublic.commentworks.com/ftc/                       comment will be kept confidential only
                                             Holdings, LLC, and Impax Laboratories,                  amnealimpaxdivest by following the                    if the General Counsel grants your
                                             Inc.; File No. 181 0017’’ on your                       instructions on the web-based form. If                request in accordance with the law and
                                             comment, and file your comment online                   this Notice appears at http://                        the public interest. Once your comment
                                             at https://ftcpublic.commentworks.com/                  www.regulations.gov/#!home, you also                  has been posted on the public FTC
                                             ftc/amnealimpaxdivest by following the                  may file a comment through that                       website—as legally required by FTC
                                             instructions on the web-based form. If                  website.                                              Rule 4.9(b)—we cannot redact or
                                             you prefer to file your comment on                         If you prefer to file your comment on              remove your comment from the FTC
                                             paper, write ‘‘In the Matter of Amneal                  paper, write ‘‘In the Matter of Amneal                website, unless you submit a
amozie on DSK3GDR082PROD with NOTICES




                                             Holdings, LLC, and Impax Laboratories,                  Holdings, LLC, and Impax Laboratories,                confidentiality request that meets the
                                             Inc.; File No. 181 0017’’ on your                       Inc.; File No. 181 0017’’ on your                     requirements for such treatment under
                                             comment and on the envelope, and mail                   comment and on the envelope, and mail                 FTC Rule 4.9(c), and the General
                                             your comment to the following address:                  your comment to the following address:                Counsel grants that request.
                                             Federal Trade Commission, Office of the                 Federal Trade Commission, Office of the                  Visit the FTC website at http://
                                             Secretary, 600 Pennsylvania Avenue                      Secretary, 600 Pennsylvania Avenue                    www.ftc.gov to read this Notice and the
                                             NW, Suite CC–5610 (Annex D),                            NW, Suite CC–5610 (Annex D),                          news release describing it. The FTC Act


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Document Created: 2018-11-02 09:51:38
Document Modified: 2018-11-02 09:51:38
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionProposed Consent Agreement.
DatesComments must be received on or before May 30, 2018.
ContactJah-Juin Ho (202-326-3463) and Ryan Mehm (202-326-2918), Bureau of Consumer Protection, 600 Pennsylvania Avenue NW, Washington, DC 20580.
FR Citation83 FR 19762 

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