Netscape Communications, now a unit of AOL, was sued by
customers alleging that the SmartDownload software was
privacy-intrusive and violated electronic surveillance laws by
monitoring internet users’ moves.
AOL abandoned the tracking feature of SmartDownload after being
sued. However, it also claimed that its customers could not bring
court proceedings because they had accepted an arbitration-only
clause in the end-user licence agreement.
According to CNet, the court rejected AOL’s argument, reasoning
that the terms of the agreement were presented on the web page
below the download button. Therefore users who obtained
SmartDownload had not received “reasonable notice” of the terms of
the agreement.
The court also confirmed an earlier decision, ruling that the
agreement in dispute did not cover SmartDownload anyway, because it
was designed for Communicator.
Last month, another US court ruled that a PayPal clickwrap
clause requiring users to go through arbitration proceedings in the
event of a dispute was invalid.
