High-tech Issue: Rooting Out The Spy In Your Computer

Updated: Apr 27 2004, 05:30am hrs
People came from all over to attend a recent Federal Trade Commission workshop in Washington on spyware, one more plague of the digital age. They all agreed on one thing: They could not define spyware.

Spyware is in the eye of the beholder, said Ari Schwartz, associate director of the Center for Democracy and Technology, a policy research group in Washington.

In general, spyware - called adware by its proponents - is software that shows up on a computer unannounced, often because the owner has signed up for a free service like a file-sharing network or has agreed to receive messages in return for gaining access to a Web site. The software usually delivers pop-up ads, but sometimes performs other actions without the owner understanding what is going on or how to stop it.

The controversy involves more than consumer inconvenience, technology companies say. Such software is now the No 1 reason that consumers call Dell for technical support, Maureen Cushman, legal counsel to Dells consumer division, told a meeting of the trade commission. It damages the Dell brand, she said.

The activities of spyware programs can be relatively benign, obnoxious or even blatantly illegal. Computer users may be driven to distraction by pop-up ads, some pornographic, or find that their PCs become sluggish, laboring under the computing burden of the unwanted programs. Some programs monitor Internet use or even record keystrokes, such as password entries.

Given its range of activities, fighting spyware is a minefield for lawmakers and regulators, but that did not stop one state, Utah, from stepping in. On March 23, Governor Olene S Walker signed the nations first anti-spyware law, which prohibits software that is installed without the users consent and programs that send personal information.

The anti-spyware efforts, like the recent federal move to regulate spam, are following what has become an increasingly familiar pattern in online technology.

In the first phase, after a honeymoon period of increasing popularity, unpleasant practices emerge: Once a broad swath of the public had been introduced to the wonders of the Internet, it found itself bombarded with spam, advertising pop-ups and full-blown spyware. In the second phase, consumers howl and politicians get concerned, but the affected industries urge caution, arguing that regulation will stifle innovation and hurt legitimate business.

Eventually, phase three arrives: States begin to enact laws against the offending practice. Faced with the prospect of a patchwork of possibly conflicting legislation, the industry asks Congress for a uniform, but often less stringent, federal law.

Three other states - California, Iowa and Virginia - are considering legislation aimed at spyware, so it is no surprise that federal legislation has been introduced.

In February, Sen. Conrad Burns, R-Mont., and two Democratic senators, Ron Wyden of Oregon and Barbara Boxer of California, offered a bill titled Software Principles Yielding Better Levels of Consumer Knowledge, known as Spyblock. It would require notice and consent before software could be added to a computer.

Online companies greeted Utahs move with apprehension. The legislation, while very well-intentioned, would have serious unintended consequences on everyday, legitimate activities on the Internet, a coalition of companies - including America Online, Amazon.com, Microsoft, Google and Yahoo - warned in a letter to Utah officials.

The new law was immediately challenged by WhenU.com, a company based in New York that puts Internet advertising software on peoples machines. If the statute goes into effect its going to outlaw what WhenU does, said Jeffrey D Neuburger, a lawyer in New York who deals with high-technology issues but does not represent anybody involved in the case.

Neuburger said that he was no fan of the practices of WhenU and its chief competitor, the Claria Corp., once known as Gator. But he argued that the Utah law was drafted too broadly and would lead to frivolous litigation by companies that say they have been victimized by adware.

The bills sponsor, state Rep. Stephen H Urquhart, said that the law focused on giving computer owners notice of what was being done to their machines and the opportunity to refuse the software or remove it easily. Im convinced over 75 per cent of the people who have this on their computers have no idea its there, he said.

The law that WhenU.com is challenging has its origins in a lawsuit against the company by a Utah company that sold contact lenses. The company, 1-800-Contacts, said it was losing customers because WhenU was placing ads for lens-selling rivals when visitors came to the 1-800-Contacts site. It sued WhenU in federal court in New York.

Weve made substantial investments in our trademark and copyrights and consumer awareness, said R. Joe Zeidner, vice president for legal affairs at 1-800-Contacts, and we think there needs to be protection in place for business.

Last December, US District Judge Deborah A Batts granted an injunction prohibiting WhenU from serving pop-up ads for rivals of 1-800 Contacts - a departure from other case law that had supported WhenUs practices.

The chief executive of WhenU, Avi Z. Naider, said that the issue should be resolved in Congress, not on a state-by-state basis. He also said that any law should focus on stopping rogue behavior, not outlawing technologies like his companys software-based advertising. He said that WhenUs software had been installed on 100 million machines, and was no longer active on 80 million, indicating it was easy to remove.

Naiders argument is not convincing to Zeidner.

His business model, and Gators business model, Zeidner said, is to put this on computers faster than the public is being educated and removing it from their computers.