Facts

The Federal Trade Commission (FTC) filed a complaint against TRENDnet Inc. for allegedly violating Section 5(a) of the Federal Trade Commission Act, which prohibited unfair or deceptive acts or practices.

TRENDnet sold networking devices, including routers, modems, and Internet Protocol (IP) cameras to residential consumers and small- to medium-sized businesses. The IP cameras, marketed under the trade name "SecurView," allowed consumers to access live video and audio feeds (live feeds) over the Internet, including access from a mobile device. TRENDnet provided an authentication feature before a user may access the live feeds.

The complaint charged TRENDnet with failing to take steps to ensure that its products were secure; failing to ensure that its user's security settings were honored; and failing to provide reasonable security to prevent unauthorized access to users' live feeds.

COMPLAINANT'S CONTENTIONS:
Complainant contended that respondent failed to provide reasonable security to its users to prevent unauthorized access to users' live feeds when respondent transmitted user login credentials without securing such transmissions. Complainant also contended that respondent failed to actively monitor its products' vulnerability as reported by third-party researchers and the public. As a result, hackers were able to exploit the vulnerability and compromised the IP cameras from approximately April 2010 until February 2012. Consequently, respondents' conduct constituted unfair or deceptive acts or practices in violation of Section 5(a) of the Act.

Result

The parties agreed to enter into a consent order to resolve the FTC's complaint whereby TRENDnet was ordered to establish and maintain a comprehensive security program designed to address the security risks that could result in unauthorized access to its IP cameras. TRENDnet was also ordered to prepare assessments and reports to ensure compliance with the order. Moreover, TRENDnet was ordered to notify the affected consumers about the IP cameras' flaws that allowed hackers unauthorized access to their live feed and information. Moreover, TRENDnet was ordered to provide instructions on how to remove this flaw. TRENDnet was also ordered to provide prompt and free support for two years in connection with this flaw. The FTC also ordered TRENDnet to comply with certain reporting obligations.