Cbr Systems, Inc.; Analysis of Proposed Consent Order To Aid Public Comment, 7431-7433 [2013-02143]
[Federal Register Volume 78, Number 22 (Friday, February 1, 2013)]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02143]
FEDERAL TRADE COMMISSION
[File No. 112 3120]
Cbr Systems, Inc.; Analysis of Proposed Consent Order To Aid
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 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 February 28, 2013.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/cbrsystemsconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Cbr Systems, File No.
112 3120'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/cbrsystemsconsent by following the
instructions on the web-based form. If you prefer to file your comment
on paper, mail or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Laura Roposo VanDruff (202-326-2999),
Ryan M. Mehm (202-326-2918), FTC, 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 January 28, 2013), 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, DC 20580, either in person or by calling (202) 326-
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before February 28,
2013. Write ``Cbr Systems, File No. 112 3120'' on your comment. Your
comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to
remove individuals' home contact information from comments before
placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which * * * is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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/cbrsystemsconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``Cbr Systems, File No.
112 3120'' on your comment and on the envelope, and mail or deliver it
to the following address: Federal Trade Commission, Office of the
Secretary, Room H-113
(Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580. If
possible, submit your paper comment to the Commission by courier or
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before February 28, 2013. You can find more
information, including routine uses permitted by the Privacy Act, in
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent order applicable to Cbr Systems, Inc.
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.
Cbr collects and stores umbilical cord blood and umbilical cord
tissue for potential medical use. When a pregnant woman agrees to have
Cbr collect and store her umbilical cord blood or umbilical cord blood
and umbilical cord tissue, Cbr collects her personal information,
including, but not limited to, the following: name, address, email
address, telephone number, date of birth, Social Security number,
driver's license number, credit card number, debit card number, medical
health history profile, blood typing results, and infectious disease
marker results. During the enrollment process, Cbr also collects
personal information, such as fathers' Social Security numbers, and the
company collects information relating to newborn children, such as
name, gender, date and time of birth, birth weight, delivery type, and
adoption type (i.e., open, closed, or surrogate). Cbr may also collect
limited health information for certain children and the name, address,
email address, and credit card information for individuals, such as
friends or family members, who contribute to the cost of collecting and
storing cord blood or cord tissue. The misuse of the types of personal
information Cbr collects--including Social Security numbers, dates of
birth, credit card numbers, and health information--can facilitate
identity theft, including existing and new account fraud, expose
sensitive medical data, and lead to related consumer harms.
The Commission's complaint alleges that Cbr misrepresented that it
maintained reasonable and appropriate practices to protect consumers'
personal information from unauthorized access. Cbr engaged in a number
of practices, however, that, taken together, failed to provide
reasonable and appropriate security for consumers' personal
information. Among other things, Cbr:
(1) Failed to implement reasonable policies and procedures to
protect the security of consumers' personal information it collected
(2) Created unnecessary risks to personal information by (a)
Transporting portable media containing personal information in a manner
that made the media vulnerable to theft or other misappropriation; (b)
failing to adequately supervise a service provider, resulting in the
retention of a legacy database that contained consumers' personal
information, including consumers' names, addresses, email addresses,
telephone numbers, dates of birth, Social Security numbers, drivers'
license numbers, credit card numbers, and health information, in a
vulnerable format on its network; (c) failing to take reasonable steps
to render backup tapes or other portable media containing personal
information or information that could be used to access personal
information unusable, unreadable, or indecipherable in the event of
unauthorized access; (d) not adequately restricting access to or
copying of personal information contained in its databases based on an
employee's need for information; and (e) failing to destroy consumers'
personal information for which Cbr no longer had a business need; and
(3) Failed to employ sufficient measures to prevent, detect, and
investigate unauthorized access to computer networks, such as by
adequately monitoring web traffic, confirming distribution of anti-
virus software, employing an automated intrusion detection system,
retaining certain system logs, or systematically reviewing system logs
for security threats.
The complaint further alleges that these failures contributed to a
December 2010 incident in which hundreds of thousands of consumers'
personal information was unnecessarily exposed. On December 9, 2010, a
Cbr employee removed four backup tapes from Cbr's San Francisco,
California facility and placed them in a backpack to transport them to
Cbr's corporate headquarters in San Bruno, California, approximately
thirteen miles away. The backpack contained the four Cbr backup tapes,
a Cbr laptop, a Cbr external hard drive, a Cbr USB drive, and other
materials. At approximately 11:35 p.m. on December 13, 2010, an
intruder removed the backpack from the Cbr employee's personal vehicle.
The Cbr backup tapes were unencrypted, and they contained consumers'
personal information, including, in some cases, names, gender, Social
Security numbers, dates and times of birth, drivers' license numbers,
credit/debit card numbers, card expiration dates, checking account
numbers, addresses, email addresses, telephone numbers, and adoption
type (i.e., open, closed, or surrogate) for approximately 298,000
consumers. The Cbr laptop and Cbr external hard drive, both of which
were unencrypted, contained enterprise network information, including
passwords and protocols, that could have facilitated an intruder's
access to Cbr's network, including additional personal information
contained on the Cbr network.
The proposed order contains provisions designed to prevent Cbr from
engaging in the future in practices similar to those alleged in the
Part I of the proposed order prohibits misrepresentations about the
privacy, confidentiality, security, or integrity of personal
information collected from or about consumers. Part II of the proposed
order requires Cbr to establish and maintain a comprehensive
information security program 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 Cbr's
size and complexity, nature and scope of its activities, and the
sensitivity of the information collected from or about consumers.
Specifically, the proposed order requires Cbr 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 personal 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
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
Develop and use reasonable steps to select and retain
service providers capable of appropriately safeguarding personal
information they receive from Cbr, and require service providers by
contract to implement and maintain appropriate safeguards; and
Evaluate and adjust its information security program in
light of the results of testing and monitoring, any material changes to
operations or business arrangement, 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 Cbr to obtain within the
first one hundred eighty (180) days after service of the order, and on
a biennial basis thereafter for a period of twenty (20) years, an
assessment and report from a qualified, objective, independent third-
party professional, certifying, among other things, that: (1) It has in
place a security program that provides protections that meet or exceed
the protections required by Part II of the proposed 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
Parts IV through VIII of the proposed order are reporting and
compliance provisions. Part IV requires Cbr 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, Cbr 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 all current and future principals, officers,
directors, and managers, and 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 Cbr 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 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 complaint or order or to modify the
order's terms in any way.
By direction of the Commission.
Donald S. Clark,
[FR Doc. 2013-02143 Filed 1-31-13; 8:45 am]
BILLING CODE 6750-01-P