[Federal Register: November 23, 2004 (Volume 69, Number 225)]
[Notices]
[Page 68149-68151]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23no04-59]
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 032 3221]
Petco Animal Supplies, 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 or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement 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 December 15, 2004.
ADDRESSES: Comments should refer to ``Petco Animal Supplies, Inc., File
No. 032 3221,'' to facilitate the organization of comments. A comment
filed in paper form should include this reference both in the text and
on the envelope, and should be mailed or delivered to the following
address: Federal Trade Commission/Office of the Secretary, Room H-159,
600 Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing
confidential material must be filed in paper form, as explained in the
SUPPLEMENTARY INFORMATION section. The FTC is requesting that any
comment filed in paper form be sent by courier or overnight service, if
possible, because U.S. postal mail in the Washington area and at the
Commission is subject to delay due to heightened security precautions.
Comments filed in electronic form (except comments containing any
confidential material) should be sent to the following e-mail box:
consentagreement@ftc.gov.
FOR FURTHER INFORMATION CONTACT: Alain Sheer, FTC, Bureau of Consumer
Protection, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202)
326-3321.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34
of the Commission's Rules of Practice, 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 November 17, 2004), on the World Wide Web, at ``http://www.ftc.gov/os/2004/11/index.htm.
'' A paper copy can be obtained from
the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue,
NW., Washington, DC 20580, either in person or by calling (202) 326-
2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. Written comments must be submitted
on or before December 15, 2004. Comments
[[Page 68150]]
should refer to ``Petco Animal Supplies, Inc., File No. 032 3221,'' to
facilitate the organization of comments. A comment filed in paper form
should include this reference both in the text and on the envelope, and
should be mailed or delivered to the following address: Federal Trade
Commission/Office of the Secretary, Room H-159, 600 Pennsylvania
Avenue, NW., Washington, DC 20580. If the comment contains any material
for which confidential treatment is requested, it must be filed in
paper (rather than electronic) form, and the first page of the document
must be clearly labeled ``Confidential.'' \1\ The FTC is requesting
that any comment filed in paper form be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington area
and at the Commission is subject to delay due to heightened security
precautions. Comments filed in electronic form should be sent to the
following e-mail box: consentagreement@ftc.gov.
---------------------------------------------------------------------------
\1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be
accompanied by an explicit request for confidential treatment,
including the factual and legal basis for the request, and must
identify the specific portions of the comment to be withheld from
the public record. The request will be granted or denied by the
Commission's General Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC Web site, to the extent
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC
makes every effort to remove home contact information for individuals
from the public comments it receives before placing those comments on
the FTC Web site. More information, including routine uses permitted by
the Privacy Act, may be found in the FTC'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 agreement from Petco Animal Supplies, Inc.
(``Petco'').
The consent agreement 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.
Petco is a national retailer that sells pet food, pet supplies, and
pet services from over 600 stores throughout the United States. It also
sells pet food and supplies through its online store at http://www.PETCO.com.
This matter concerns alleged false or misleading
representations Petco made to consumers about the security of personal
information collected through its online store.
The Commission's proposed complaint alleges that Petco represented
that personal information it obtained from consumers through http://www.PETCO.com
was stored in an encrypted format and therefore was not
accessible to anyone except the consumer that provided the information.
The complaint alleges this representation was false because a commonly
known attack on its Web site could and was used to gain access in clear
readable text to personal information, including credit card numbers
and expiration dates, that Petco obtained from consumers.
The proposed complaint also alleges that Petco represented that it
implemented reasonable and appropriate measures to protect the personal
information it obtained through the website against unauthorized
access. The complaint alleges this representation was false because
Petco did not implement reasonable and appropriate measures to detect
common vulnerabilities and prevent them from being exploited.
The proposed order applies to Petco's collection and storage of
personal information from or about consumers in connection with its
online business. It contains provisions designed to prevent Petco from
engaging in the future in practices similar to those alleged in the
complaint.
Specifically, Part I of the proposed order prohibits Petco, in
connection with online advertising, marketing, promotion, offering for
sale, or sale of any product or service, from misrepresenting the
extent to which it maintains and protects the security,
confidentiality, or integrity of any personal information collected
from or about consumers.
Part II of the proposed order requires Petco to establish and
maintain a comprehensive information security program in writing that
is reasonably designed to protect the security, confidentiality, and
integrity of personal information collected from or about consumers.
The security program must contain administrative, technical, and
physical safeguards appropriate to Petco's size and complexity, the
nature and scope of its activities, and the sensitivity of the personal
information collected from or about consumers. Specifically, the order
requires Petco to:
Designate an employee or employees to coordinate and be
accountable for the information security program.
Identify material internal and external risks to the
security, confidentiality, and integrity of consumer information that
could result in unauthorized disclosure, misuse, loss, alteration,
destruction, or other compromise of such information, and assess the
sufficiency of any safeguards in place to control these risks. At a
minimum, this risk assessment should include consideration of the risks
in each area of relevant operation.
Design and implement reasonable safeguards to control the
risks identified through risk assessment, and regularly test or monitor
the effectiveness of the safeguards' key controls, systems, and
procedures.
Evaluate and adjust its information security program in
light of the results of testing and monitoring, any material changes to
its operations or business arrangements, or any other circumstances
that Petco knows or has reason to know may have a material impact on
the effectiveness of its information security program.
Part III of the proposed order requires that Petco obtain within
180 days after being served with the final order approved by the
Commission, and on a biennial basis thereafter, an assessment and
report from a qualified, objective, independent third-party
professional, certifying, among other things, that: (1) Petco has in
place a security program that provides protections that meet or exceed
the protections required by Part II of the proposed order, and (2)
Petco's security program is operating with sufficient effectiveness to
provide reasonable assurance that the security, confidentiality, and
integrity of consumers' personal information has been protected.
Parts IV through VII of the proposed order are reporting and
compliance provisions. Part IV requires Petco to retain documents
relating to compliance. It requires Petco to retain most documents for
a five-year period; assessments and supporting documents, however, must
be retained for three years after the date when each assessment is
prepared. Part V requires dissemination of the order now and in the
future to persons with
[[Page 68151]]
responsibilities relating to the subject matter of the proposed order.
Part VI requires Petco to notify the Commission of changes in Petco's
corporate status. Part VII mandates that Petco submit compliance
reports to the FTC. Part VIII is a provision ``sunsetting'' the order
after twenty (20 ) years, with certain exceptions.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the proposed order to modify its terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-25935 Filed 11-22-04; 8:45 am]
BILLING CODE 6750-01-P