Utah judge halts state antispyware law

IDG News Service - A district court judge in Utah has ruled in favor of a New York company that makes advertising software that tracks Web surfers' activities, blocking the nation's first-ever law targeting spyware.
Judge Joseph C. Fratto Jr. of the Third Judicial District Court in Salt Lake City issued an injunction yesterday that temporarily blocked the state law, known as the Spyware Control Act, from being enforced. A company called WhenU.com Inc. had sought a temporary restraining order after the new law was signed by Gov. Olene Walker March 23. WhenU.com argued the law would cause "irreparable harm" to its business.
WhenU.com runs what it calls a "global desktop advertising network" using software that it bundles with other popular applications distributed for free on the Internet. The WhenU.com software is installed on users' systems along with those applications. Once installed, the software displays advertisements in pop-up windows, Web page banners, buttons, tool bars and text links, the company said.
Utah's Spyware Control Act defines spyware broadly as any software that monitors a computer's use and sends information about it to a remote computer or server without prior consent of the owner. The law also prohibits individuals from installing spyware on another person's computer.
WhenU.com claims that users agree to have its software installed and to be shown advertisements in exchange for receiving free software. The company adheres to rigorous privacy policies and says it doesn't track information on individual users, place cookies on users' systems or profile users.
The company argued that the Utah law violates the First Amendment of the U.S. Constitution, which protects free speech, as well as the Constitution's commerce clause, which gives the U.S. Congress the right to regulate commerce between the states and gives courts the power to strike down state legislation that interferes with interstate commerce.
In a statement, WhenU.com CEO Avi Naider called the injunction an "important decision" for Internet advertisers and said his company supports "appropriate antispyware legislation at the federal level," although not the Utah law.
Momentum is picking up for a federal antispyware measure. Last week, the U.S. House Subcommittee on Commerce, Trade and Consumer Protection approved a spyware bill called the Securely Protect Yourself Against Cyber Trespass Act (SPY ACT) that authorizes fines up to $3 million for companies found guilty of collecting personal information, diverting Web browsers and delivering some pop-up advertisements to computer users without their consent (see story).
A House committee will hold a hearing to amend SPY ACT tomorrow, the last step before the bill is taken