HTC America has agreed to settle Federal Trade Commission charges that the company failed to take reasonable steps to secure the software it developed for its smartphones and tablet computers, introducing security flaws that placed sensitive information about millions of consumers at risk.

The settlement requires HTC America to develop and release software patches to fix vulnerabilities found in millions of HTC devices, and to establish a comprehensive security program designed to address security risks during the development of HTC devices and to undergo independent security assessments every other year for the next 20 years.

Among other things, the Commission's complaint alleged that HTC failed to:

• provide its engineering staff with adequate security training
• review or test the software on its mobile devices for potential security vulnerabilities
• follow well-known and commonly accepted secure coding practices
• establish a process for receiving and addressing vulnerability reports from third parties.

To illustrate the consequences of these alleged failures, the FTC’s complaint details several vulnerabilities found on HTC’s devices, including the insecure implementation of two logging applications - Carrier IQ and HTC Loggers - as well as programming flaws that would allow third-party applications to bypass Android’s permission-based security model.

Due to these vulnerabilities millions of HTC devices compromised sensitive device functionality, potentially permitting malicious applications to send text messages, record audio, and even install additional malware onto a consumer’s device, all without the user’s knowledge or consent.

The FTC alleged that malware placed on consumers’ devices without their permission could be used to record and transmit information entered into or stored on the device, including, for example, financial account numbers and related access codes or medical information such as text messages received from healthcare providers and calendar entries concerning doctor’s appointments. In addition, malicious applications could exploit the vulnerabilities on HTC devices to gain unauthorized access to a variety of other sensitive information, such as the user’s geolocation information and the contents of the user’s text messages.

Moreover, the complaint alleged that the user manuals for HTC Android-based devices contained deceptive representations, and that the user interface for the company’s Tell HTC application was also deceptive. In both cases, the security vulnerabilities in HTC Android-based devices undermined consent mechanisms that would have otherwise prevented unauthorized access or transmission of sensitive information.

The settlement not only requires the establishment of a comprehensive security program, but also prohibits HTC America from making any false or misleading statements about the security and privacy of consumers’ data on HTC devices. HTC America and its network operator partners are also in the process of deploying the security patches required by the settlement to consumers’ devices. Many consumers have already received the required security updates.