[Federal Register Volume 75, Number 147 (Monday, August 2, 2010)]
[Notices]
[Pages 45114-45116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-18941]
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FEDERAL TRADE COMMISSION
[File No. 072 3121]
Rite Aid Corporation; 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
[[Page 45115]]
federal law prohibiting unfair or deceptive acts or practices or unfair
methods of competition. The attached Analysis to Aid Public Comment
describes both the allegations in the draft complaint and the terms of
the consent order -- embodied in the consent agreement -- that would
settle these allegations.
DATES: Comments must be received on or before August 27, 2010.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Rite Aid,
File No. 072 3121'' to facilitate the organization of comments. Please
note that your comment -- including your name and your state -- will be
placed on the public record of this proceeding, including on the
publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
Because comments will be made public, they should not include any
sensitive personal information, such as an individual'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. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential. . . .,'' as provided in
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). 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), 16 CFR 4.9(c).\1\
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\1\ 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 FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following weblink: (https://ftcpublic.commentworks.com/ftc/riteaid/) and following the instructions
on the web-based form. To ensure that the Commission considers an
electronic comment, you must file it on the web-based form at the
weblink: (https://ftcpublic.commentworks.com/ftc/riteaid/). If this
Notice appears at (http://www.regulations.gov/search/index.jsp), you
may also file an electronic comment through that website. The
Commission will consider all comments that regulations.gov forwards to
it. You may also visit the FTC website at (http://www.ftc.gov/) to read
the Notice and the news release describing it.
A comment filed in paper form should include the ``Rite Aid, File
No. 072 3121'' 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-135 (Annex D), 600
Pennsylvania Avenue, NW, Washington, DC 20580. 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.
The Federal Trade Commission Act (``FTC Act'') and other laws 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,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. 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.shtm).
FOR FURTHER INFORMATION CONTACT: Loretta Garrison (202-326-3043) or
Alain Sheer (202-326-3321), Bureau of Consumer Protection, 600
Pennsylvania Avenue, NW, Washington, D.C. 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission 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 July 27, 2010), on the World Wide Web, at (http://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 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. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent agreement from Rite Aid Corporation (``Rite Aid'').
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.
The Commission's proposed complaint alleges that Rite Aid is in the
business of selling prescription and non-prescription medicines and
supplies, as well as other products. It operates, among other things,
approximately 4,900 retail pharmacy stores in the United States
(collectively, ``Rite Aid pharmacies'') and an online pharmacy
business. The company allows consumers buying products in Rite Aid
pharmacies to pay for their purchases with credit, debit and electronic
benefit transfer cards; insurance cards; personal checks; or cash.
The complaint alleges that in conducting its business, Rite Aid
routinely obtains information from or about its customers, including,
but not limited to, name; telephone number; address; date of birth;
bank account number; payment card account number and expiration date;
prescription information, such as medication and dosage, prescribing
physician name, address, and telephone number, health insurer name, and
insurance account
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number and policy number; and Social Security number. The company also
collects and maintains sensitive information from or about its
employees and job applicants, which includes, among other things,
Social Security numbers.
The complaint further alleges that Rite Aid engaged in a number of
practices that, taken together, failed to provide reasonable and
appropriate security for sensitive information from consumers,
employees, and job applicants. In particular, Rite Aid failed to: (1)
implement policies and procedures to dispose securely of such
information, including, but not limited to, policies and procedures to
render the information unreadable in the course of disposal; (2)
adequately train employees to dispose securely of such information; (3)
use reasonable measures to assess compliance with its established
policies and procedures for the disposal of such information; or (4)
employ a reasonable process for discovering and remedying risks to such
information.
The complaint alleges that as a result of these failures, Rite Aid
pharmacies discarded materials containing sensitive information in
clear readable text (such as pharmacy labels and job applications) in
unsecured, publicly-accessible trash dumpsters on numerous occasions.
For example, in July 2006 and continuing into 2007 and 2008, television
stations and other media outlets reported finding such information in
unsecured dumpsters used by Rite Aid pharmacies in at least 7 cities
throughout the United States. When discarded in publicly-accessible
dumpsters, such information can be obtained by individuals for purposes
of identity theft or the theft of prescription medicines.
The proposed order applies to sensitive information about
consumers, employees, and job applicants obtained by Rite Aid. It
contains provisions designed to prevent Rite Aid from engaging in the
future in practices similar to those alleged in the complaint.
Part I of the proposed order prohibits misrepresentations about the
security, confidentiality, and integrity of sensitive information. Part
II of the order requires Rite Aid to establish and maintain a
comprehensive information security program that is reasonably designed
to protect the security, confidentiality, and integrity of such
information (whether in paper or electronic format) about consumers,
employees, and those seeking to become employees. The order covers
health and other sensitive information obtained by all Rite Aid
entities, including, but not limited to, retail pharmacies. The
security program must contain administrative, technical, and physical
safeguards appropriate to Rite Aid's size and complexity, the nature
and scope of its activities, and the sensitivity of the information
collected from or about consumers and employees. Specifically, the
order requires Rite Aid 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 sensitive information that
could result in the 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.
Design and implement reasonable safeguards to control the
risks identified through risk assessment, and regularly test or monitor
the effectiveness of the safeguards' key controls, systems, and
procedures.
Develop and use reasonable steps to select and retain
service providers capable of appropriately safeguarding sensitive
information they receive from Rite Aid, and require service providers
by contract to implement and maintain appropriate safeguards.
Evaluate and adjust its information security programs in
light of the results of testing and monitoring, any material changes to
operations or business arrangements, or any other circumstances that it
knows or has reason to know may have a material impact on its
information security program.
Part III of the proposed order requires Rite Aid to obtain within
one year, 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
order; and (2) its security program is operating with sufficient
effectiveness to provide reasonable assurance that the security,
confidentiality, and integrity of sensitive consumer, employee, and job
applicant information has been protected.
Parts IV through VIII of the proposed order are reporting and
compliance provisions. Part IV requires Rite Aid to retain documents
relating to its compliance with the order. For most records, the order
requires that the documents be retained for a five-year period. For the
third-party assessments and supporting documents, Rite Aid must retain
the documents for a period of three years after the date that each
assessment is prepared. Part V requires dissemination of the order now
and in the future to persons with responsibilities relating to the
subject matter of the order. Part VI ensures notification to the FTC of
changes in corporate status. Part VII mandates that Rite Aid submit a
compliance report to the FTC within 60 days, and periodically
thereafter as requested. Part VIII is a provision ``sunsetting'' the
order after twenty (20) years, with certain exceptions.
The Commission conducted its investigation jointly with the Office
for Civil Rights in the Department of Health and Human Services (``OCR-
HHS''). Working together, the Commission and OCR-HHS each entered into
separate but coordinated agreements with Rite Aid to resolve all the
issues of both agencies.
This is the Commission's twenty-ninth case to challenge the failure
by a company to implement reasonable information security practices,
and the second case: (1) involving a health provider, (2) proceeding
jointly with OCR-HHS, and (3) challenging the security of employee
data.
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 or to modify its terms in any way.
By direction of the Commission.
Donald S. Clark
Secretary.
[FR Doc. 2010-18941 Filed 7-30-10; 8:45 am]
BILLING CODE 6750-01-S