Utah Anti-Spyware Law Suspended by Judge

A Utah District Court judge has put a hold on a state law that targets spyware — quiet computer programs that can creep onto people’s computers as they navigate the Internet and download seemingly innocuous applications that then track their online behavior.

The ruling from Utah Third Judicial District Court Judge Joseph Fratto Jr. was hailed as a victory by New York-based Internet advertiser WhenU, which argued in court for the court to enjoin the Utah Spyware Act.

WhenU contends that while it supports federal legislation aimed at preventing spyware, the Utah state law affects legitimate Internet advertising companies and is a violation of the First Amendment and other laws. The ruling means that the Utah law will be enjoined until the larger case — in which WhenU has challenged the law’s constitutionality — is resolved.

“This is an important decision for the entire Internet advertising industry,” said WhenU chief executive officer Avi Naider, whose company delivers pop-ups and other ads to users who agree to receive them.

Naider said the Utah law sets too wide of a net, but that his company supports spyware-control measures that are currently under consideration at the federal level. A U.S. House subcommittee last week approved spyware legislation and a companion bill in the Senate is also likely to be passed into law, Electronic Privacy Information Center (EPIC) associate director Chris Hoofnagle told TechNewsWorld.

State Law Impairs

WhenU’s Naider said that although there are strict opt-in and privacy policies in his company — which supports software such as BearShare, Freeze and Weathercast and advertises with toolbars, pop-ups, banners, buttons, text links and product displays — the Utah law would still impact his company.

Naider said his company supports the legislation that is being considered on the federal level, but was critical of Utah’s law.

“Spyware is a problem and we want to put an end to it,” Naider said. “WhenU supports appropriate anti-spyware legislation at the federal level, but unfortunately Utah’s act also impairs legitimate Internet advertising.”

Quiet Concern Getting Louder

The House Energy and Commerce committee overwhelmingly passed the spyware bill this week, but supporters indicated they were open to changes if needed to avoid the kind of secondary impact to legitmate advertisers as the bill approaches a full House vote.

EPIC’s Hoofnagle said that although Congress is likely to pass legislation on spyware this year, most computer users are not aware of the small software programs that are used to track Internet use, deliver pop-ups and perform other functions.

Referring to the federal legislation proposed to cut down on spyware — requiring that consumers receive clear and conspicuous notice prior to installation of applications containing spyware — Hoofnagle said that lawmakers might be overlooking the companies that use spyware indirectly through advertising companies.

Jonathan Spira, chief analyst of New York-based research and consulting firm Basex, told TechNewsWorld that spyware is among several different ways in which consumers are now in danger of being tracked without their consent.

“Today, data is being gathered from an ever increasing amount of sources, both online and offline,” Spira said, referring also to radio frequency identification (RFID) and credit card purchase-tracking technologies.

Spira said that unlike Europe — where privacy laws closely guard identity and what can be done with personal information — the U.S. is suffering from its self-regulatory approach toward such issues.

“Companies propagated privacy policies that can often be misleading,” Spira said.

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