[Federal Register Volume 84, Number 211 (Thursday, October 31, 2019)]
[Notices]
[Pages 58386-58388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23809]
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FEDERAL TRADE COMMISSION
[File No. 172 3118]
Retina-X Studios, LLC; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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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 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 December 2, 2019.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``Retina-X Studios,
LLC; File No. 172 3118'' on your comment, and file your comment online
at https://www.regulations.gov by following the instructions on the
web-based form. If you prefer to file your comment on paper, 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: Jacqueline Connor (202-326-2844),
Bureau of Consumer Protection, Federal Trade Commission, 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 October 22, 2019), 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 December 2,
2019. Write ``Retina-X Studios, LLC; File No. 172 3118'' 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 https://www.regulations.gov website.
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 through the https://www.regulations.gov website.
If you prefer to file your comment on paper, write ``Retina-X
Studios, LLC; File No. 172 3118'' 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
website at https://www.regulations.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
[[Page 58387]]
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 December 2, 2019. 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 final approval, an agreement containing a consent order from Retina-
X Studios, LLC (``Retina-X'') and individual Respondent James N. Johns,
Jr. (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.
From 2007 to 2018 Retina-X developed and sold various products and
services, each with the means to allow a purchaser to monitor, often
surreptitiously, another person's activities on that person's mobile
device. James N. Johns, Jr. is the registered agent and sole member of
Retina-X. Individually or in concert with others, Mr. Johns controlled
or had the authority to control, or participated in the acts and
practices alleged in the proposed complaint.
Respondents' mobile device monitoring products and services
included MobileSpy, PhoneSheriff, and TeenShield. These monitoring
products and services had varying capabilities and costs. Purchasers
were often required to jailbreak or root (i.e., actions to bypass
various restrictions implemented by the operating system on and/or the
manufacturer of mobile devices) the device user's mobile device prior
to installing Respondents' monitoring products and services.
Jailbreaking or rooting a mobile device exposes a mobile device to
various security vulnerabilities and likely invalidates any warranty
that a mobile device manufacturer or carrier provides.
All of Respondents' monitoring products and services required that
the purchaser have physical access to the device user's mobile device,
and could remotely monitor the device user's activities from an online
dashboard. By default, Respondents' monitoring products and services
disclosed to the device user that they were being monitored (e.g., an
icon on a monitored mobile device). However, purchasers could turn off
this feature so that the monitoring products and services could run
surreptitiously, meaning that the device user was unaware that he or
she was being monitored. Respondents provided purchasers with
instructions on how to remove the icon that would confirm that
monitoring products and services were installed on a particular mobile
device.
Device users surreptitiously monitored by Respondents' monitoring
products and services could not uninstall or remove Respondents'
monitoring products and services because they did not know that they
were being monitored. Device users often had no way of knowing that
Respondents' monitoring products and services were being used on their
phone. Respondents did not take any steps to ensure that purchasers
would use Respondents' monitoring products and services for legitimate
purposes, such as to monitor employees or children.
Moreover, Respondents did not take steps to secure the personal
information collected from purchasers and device users being monitored.
Respondents outsourced most of their product development and
maintenance to a service provider. Respondents engaged in a number of
practices that, taken together, failed to provide reasonable data
security to protect the personal information collected from consumers.
As a result of these unreasonable data security practices, Respondents
were breached twice.
The Commission proposed 5-count complaint alleges that Respondents
violated Section 5(a) of the Federal Trade Commission Act and the
Children's Online Privacy Protection Rule. The first count alleges that
Respondents unfairly sold monitoring products and services that
required jailbreaking or rooting, without taking reasonable steps to
ensure that the monitoring products and services would only be used for
legitimate and lawful purposes by the purchaser.
The second to fourth counts allege that Respondents deceived
consumers about Respondents' data security practices by falsely
representing that consumers' personal information collected through
MobileSpy, PhoneSheriff, and TeenShield, and stored in Respondents'
databases was confidential, private, and safe. The fifth count alleges
that Respondents violated the Children's Online Privacy Protection Rule
by failing to establish and maintain reasonable procedures to protect
the confidentiality, security, and integrity of personal information
collected from children through the TeenShield product. Respondents
failed to implement appropriate security procedures to protect the
personal information collected from consumers, including children, such
as by: (1) Failing to adopt, implement, or maintain security standards,
policies, procedures or practices; (2) failing to conduct security
testing of mobile applications that could be exploited to gain
unauthorized access to consumers' sensitive personal information for
well-known and reasonably foreseeable vulnerabilities; (3) failing to
contractually require their service providers to adopt and implement
information security standards, policies, procedures or practices; (4)
failing to perform adequate oversight of service providers; and (5)
failing to adopt and implement written information security standards,
policies, procedures, or practices that would apply to the oversight of
their service providers.
The proposed order contains provisions designed to prevent
[[Page 58388]]
Respondents from engaging in the same or similar acts or practices in
the future.
Part I of the proposed order prohibits Respondents from selling a
monitoring product unless: (1) The monitoring product does not
circumvent security protections implemented by the mobile device
operating system or manufacturer; (2) prior to the sale of the
monitoring product, express written attestation is obtained from the
purchaser that the monitoring product stating that the monitoring
product will be used for legitimate and lawful purposes; and (3)
documentation is obtained proving that the purchaser is an authorized
user on the monitored mobile device's service carrier account. The
proposed order also requires that Respondents display an application
icon, including the name of the monitoring product, when the monitoring
product is on the mobile device. Moreover, a clear and conspicuous
notice must be presented when the application icon is clicked.
Part II of the order restrains Respondents from distributing
monitoring products unless Respondents have: (1) A home page notice
stating that the monitoring product may only be used for legitimate and
lawful purposes by authorized users; and (2) a purchase page notice
stating that the monitoring product may only be used for legitimate and
lawful purposes by authorized users, and that installing or using the
monitoring product for any other purpose may violate local, state, and/
or federal law.
Part III of the proposed order prohibits Respondents from violating
the Children's Online Privacy Protection Rule. Part IV of the proposed
order prohibits Respondents from misrepresenting the extent to which
Respondents maintain and protect the privacy, security,
confidentiality, or integrity of consumers' personal information. Part
V requires that Respondents' delete all personal information collected
from a monitoring product prior to entry of the proposed order within
120 days.
Part VI of the proposed order prohibits Respondents, and any
business that a Respondent controls, directly, or indirectly, from
transferring, selling, sharing, collecting, maintaining, or storing
personal information unless Respondents establish and implement, and
thereafter maintain, a comprehensive information security program that
protects the security confidentiality, and integrity of such personal
information. Part VII requires Respondents to obtain initial and
biennial data security assessments for twenty years. Part VIII of the
proposed order requires Respondents to disclose all material facts to
the assessor and prohibits Respondents from misrepresenting any fact
material to the assessments required by Part VII. Part IX requires
Respondents to submit an annual certification from a senior corporate
manager (or senior officer responsible for its information security
program), that Respondents have implemented the requirements of the
proposed order, are not aware of any material noncompliance that has
not been corrected or disclosed to the Commission, and includes a brief
description of any covered incident involving unauthorized access to or
acquisition of personal information. Part X requires Respondents to
submit a report to the Commission of their discovery of any covered
incident.
Parts XI through XIV of the proposed order are reporting and
compliance provisions, which including recordkeeping requirements and
provisions requiring Respondents to provide information or documents
necessary for the Commission to monitor compliance. Part XV states that
the proposed order will remain in effect for 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.
April J. Tabor,
Acting Secretary.
[FR Doc. 2019-23809 Filed 10-30-19; 8:45 am]
BILLING CODE 6750-01-P