Privacy is one of the most important legal issues in cyberlaw which the legal community has been facing. There has never been a media in which the end user has been so vulnerable to invasion to his privacy. It can be either a blatant crime such as stealing credit card information or bank account details, or a more sophisticated privacy violation such as obtaining information about the end user's surfing habits through trickery notices and improper consent.

In this page we will review some of these issues and will provide useful information for online advertisers and distributors of software.

The Spyware Problem
In recent years, the problem of spyware damaging people's computers has become so widespread that a whole new industry of anti-spyware application has grown in response thereto. 

What is "spyware"?
While many people use the term spyware, there is no clear definition to it and it is being used in a broad sense (sometimes too broad) with respect to undesirable programs of various levels of danger. The term spyware is commonly used to describe software that monitors user's information, whether it is anonymous information about web usage or personally identifiable information (commonly referred to as "PII") which may be more sensitive, and relays this information back to its operators. Such software is considered spyware when it is installed without providing proper notice to the user about the installation, does not obtain a proper consent of the user to the installation of such software and/or does not enable the user to uninstall the program in a reasonable way. In many cases, the spyware program collects information about the user's online activity, relays this information to third party marketers and displays contextual popup advertisements of such marketers to the end user, without enabling the end user to stop the popups from flooding his computer.

How does the law deal with spyware?
There are hardly any laws dealing specifically with spyware. In the US, there has been heavy lobbying in this regard and there have been several attempts to legislate federal anti-spyware laws. However, although there are some federal anti-spyware bills in the pipeline, nothing has been legislated yet. There is an abundance of anti-spyware laws on the state level. However, they have been widely criticized since they are not consistent.  Moreover, they usually deal only with the "easy" cases of the most severe kinds of behaviours, for which general laws can suffice. Thus, in the meantime, the US authorities deal with the spyware problem based on existing general legislation. Besides some technology law, such as the Computer Fraud and Abuse Act which prohibit some forms of behaviours, the most important legal resource is the consumer protection legislation and primarily the FTC Act, which prohibits unfair and deceptive practices. In recent years the FTC (Federal Trade Commission) and the New York Attorney General have been prosecuting companies which ran fraudulent spyware operations. This aggressive law enforcement by the US authorities seems to have some impact over the industry.

The industry's self regulation with respect to the spyware problem
Interestingly, in response to the magnitude of the spyware problem, the industry of security and anti-virus software, as well as the new industry of anti-spyware scanning programs, recognized the potential and has provided anti-spyware solutions to end user, which enable the user to scan the computer and remove any damaging application. However, these scanning program, acting under their own criteria, have not taken a coherent approach. Moreover, the question of what constitutes proper notice and consent (which is critical in the "gray" area cases) has not been resolved in an objective manner. Thus, and since there is no legislation covering those hard cases, the anti-spyware industry started heading towards self regulation. First, the Anti-Spyware Coalition was formed (link to their website) to create a coherent approach towards the issues. Later on, TRUSTe, a well known organization in the field of online privacy, announced its "Trusted Download Program", sponsored by leading companies such as Yahoo and Cnet (link to the program's website). This program sets forth specific guidelines as to what is right and what is wrong. Programs participating in the program which shall meet those guidelines shall be regarded as safe. As of July 2006 these guidelines form the only detailed guidelines for best practices with respect to issues like proper notice and consent, which remain vague under current legislation.

What are the legal implication of spyware on internet advertising?
The spyware problem has great influence on internet advertising. In view of the spyware problem, online advertisers, especially ones using popup advertising, should be very careful with their internet campaigns. Otherwise, they might find their ads popping up on computers through a spyware progream in an illegal manner. Thus, as a precaution, advertisers should work only with respectable ad networks and obtain proper legal advice with respect to the contractual relationship related to the online campaign.

What are the implications of spyware on online marketing of software?
Software developers should be very much aware of the sensitivities regarding methods of online distribution of software. While in the past it may have been considered enough to include some disclosures in the EULA (End User License Agreement) in order to obtain the user's consent, it seems that there is now a consensus that if your software consists of potentially problematic components, the disclosures to the user should be very upfront and the offering to the end user should not be aggressive or misleading in any manner. Upon reviewing the TRUSTe guidelines, it seems that in some respects this industry has set very high standards to meet in order to become legitimate and distributors of online software must be aware of it.

Links
The FTC Website - The website of the Federal Trade Commission which provides an overview  about various subjects, as well as details and documentation related to legal actions taken by the FTC against spyware operators.
The Ben Edelman Website - A website of Ben Edelman, a known spyware researcher, which provides self documented research on spyware related issues, as well as information and links related to spyware legislation.
The Anti-Spyware Coalition - The website of the Anti-Spyware Coalition provides an overview of its members as well as some documents pertaining to the Coalition's view on spyware related issues.
TRUSTe's Trusted Download Program - The website of the TRUSTe Trusted Download Program provides the program's guidelines which, as indicated above, are highly regarded amongst industry members.
The Center for Democracy and Technology - An organization which promotes democratic values in the Digital Age, which is involved in privacy related legislation and helped form the Anti-Spyware Coalition. It is an objective organization whose opinion is highly appreciated by the authorities as well as industry leaders.