Judge brings a temporary halt to Utah’s spyware control law
A Utah judge has ordered the state not to enforce the Utah Spyware Control Act until the issues surrounding WhenU.com Inc.’s challenge of the law are settled. The law targets software that pops up ads for competing companies when a consumer visits particular web sites. That major providers of so-called “spyware” or adware, as it’s also known, are WhenU.com and Claria Corp., formerly Gator Corp.
The Utah law was passed in January and set to go into effect in May. Implementation has been delayed pending WhenU’s challenge. The law was also the focal point of suits that L.L. Bean filed against competing retailers it alleges were using spyware to direct customers way from LLBean.com. Two of the four targets of the suit settled with L.L. Bean almost immediately, a third said it never engaged in the practice and the fourth is fighting the suit.
WhenU argued that the act affects legitimate Internet advertising companies and therefore violates the First Amendment and dormant Commerce Clause of the United States Constitution, among other laws. "This is an important decision for the entire Internet advertising industry," CEO Avi Naider said in a statement that WhenU released after the ruling on Wednesday. "Spyware is a problem and we want to put an end to it. WhenU supports appropriate anti-spyware legislation at the federal level, but unfortunately Utah`s Act also impairs legitimate Internet advertising."
Consumers who download certain software from the Internet, often offered for free, receive WhenU and Claria software as part of that download. WhenU and Claria software presents coupons and other deals to consumers when they browse certain web sites. Retailers who don’t participate in the WhenU and Claria offerings often object to the offerings blocking their own web sites.
In addition, some spyware is used to grab information about consumers and sell it to marketers or use it themselves illegally.
WhenU says it adheres to “one of the industry`s most stringent consumer privacy policies.”
It says: “Protecting user privacy is of paramount importance to WhenU. The company understands that to successfully drive revenues for advertisers, consumers must see true value in the advertisements they agree to see in exchange for free software, while knowing that their privacy is protected.
”WhenU takes every step possible to keep this promise to consumers – much more than the average web site. The WhenU global Desktop Advertising Network:
- Does not track individual user data
- Does not use cookies
- Does not track clickstream data
- Does not compile a centralized database of users
- Does not engage in any type of user profiling.”
Claria also released a statement after the ruling:
“Claria fully supports tough federal legislation aimed at eliminating the actions of companies and individuals engaged in egregious spyware practices, such as those who steal personal information from consumers for purposes of identity theft, who install surreptitious keylogger programs that record every key consumer type, or who hijack consumers` computers.
“Claria also supports federal legislation of free ad-supported software (adware), and is working closely with major industry players and with members of Congress and their staffs to craft appropriate legislation that protects consumers with clear but flexible notice and consent requirements.”
"The Court`s decision yesterday is a victory for online advertising," said Jeff McFadden, CEO of Claria. "Online advertising should be regulated at the federal level, where appropriate, to create one overriding set of regulations and rules because it is impossible for this developing industry to comply with up to 51 separate legal frameworks in the United States alone."
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