Spyware is a type of software that secretly forwards information
about a computer user's on-line activities to another individual or
company without the user's knowledge or permission. And it is
proliferating on the internet in many guises – but particularly in
the form of pop-up adverts.
One company that is notorious for using pop-up ads is the
behavioural marketing firm WhenU. The New York-based company's
software exists on 25 million computers, largely as a result of its
partnership with Kazaa, the popular file-sharing service.
When internet users download the Kazaa software they also get
WhenU's ad-serving software, or adware. Its software examines
keywords, URLs and search terms in use on the user's browser and
then selects which ads to serve the user. Its 400 advertisers
include British Airways, JP Morgan Chase, General Motors, Priceline
and Verizon.
But the ads are not only annoying for users who have to
continually close the pop-up windows that appear on their computer
screens; it can also have an affect on the web sites that the
computer user had been trying to view.
Consequently, WhenU has faced a series of legal actions over its
software, most notably from Utah-based contact lens seller 1-800
Contacts, which sued WhenU in October 2002 over the appearance of
pop-ups advertising a rival contact lens company when users had
specifically typed trade marked search terms relating to '1-800
Contacts'.
In January this year, 1-800 Contacts was awarded a preliminary
injunction, prohibiting WhenU from generating pop-up ads when users
visit the 1-800 web site.
But the lawsuit had another effect as well: it caught the
attention of Utah legislators who drafted and passed the country's
first anti-spyware law.
Enacted in March, the Spyware Control Act prohibits the
installation of spyware onto another person's computer. It also
prohibits the use of a "context-based triggering mechanism to
display an advertisement that partially or wholly covers or
obscures paid advertising or other content on an internet web site
in a way that interferes with a user's ability to view" the
site.
In short, the Act prohibits pop-up ads of the type generated by
WhenU.
In April this year, WhenU sued the State. It claimed that the
Act affects legitimate internet advertising companies and therefore
violates the First Amendment – the right of free speech.
On Tuesday Judge Joseph C Fratto Jr. of the Third Judicial
District Court in Salt Lake City agreed that the company would be
seriously affected by the coming into force of the Act and granted
the company a preliminary injunction that will prevent the Act
coming into effect until such time as the case has been heard in
full.
"This is an important decision for the entire internet
advertising industry," said Avi Naider, WhenU's Chief Executive
Officer. "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."
At the time of writing there had been no comment from State
officials.
