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June 13, 2008

The Federal Trade Commission told a U.S. Senate Internet security committee it will tighten and implement new rules on the ongoing battle against spyware by making their purveyors pay stiff civil penalties.

Under current laws, the federal watchdog agency can file lawsuits in spyware cases that seek court orders and monetary fines for ill-gotten gains, but not for punitive damages. FTC Deputy Director Eileen Harrington said the statute of limitations make it harder to mete out meaningful punishments on spyware criminals.

Harrington was addressing the Senate Committee on Commerce, Science and Transportation, which is seriously considering a new bill known as the Counter Spy Act.

While many spyware opponents seek more effective measures against abusive software that frequently gets installed on consumers' PCs with little or no notice, not all are enthusiastic supporters of the proposed bill.

"However, it has been the agency's experience in spyware cases that restitution or disgorgement may not be appropriate or sufficient remedies because consumers often have not purchased a product or service from the defendants, the harm to consumers may be difficult to quantify, or the defendants' profits may be slim or difficult to calculate with certainty," she wrote in prepared comments submitted June 11.

She added "in such cases, a civil penalty may be the most appropriate remedy and serve as a strong deterrent."

Among them is Maxim Weinstein, manager of StopBadware, an organization initiated by Harvard Law School's Berkman Center for Internet & Society and Oxford University's Oxford Internet Institute. He worries that the Counter Spy Act may weaken the hand of enforcers trying to crack down on spyware by narrowly defining the types of things that constitute violations.

The FTC hasn't taken a position on definitions in the Counter Spy Act, although "there certainly is a strong concern," said Rick Quaresima, the assistant director in the FTC's advertising practices division. "If spyware were defined too narrowly, it might have the effect of tying our hand," he added.

"StopBadware.org has changed its badware guidelines multiple times in just two and a half years, due to ongoing changes in technology and badware practices, as well as an ongoing desire to make sure that we’re 'getting it right'," Weinstein wrote. "If legislation defines spyware specifically, what happens when a new piece of spyware falls outside that definition?"

The whole debate comes as a new anti-spyware law took effect on Thursday in the state of Washington. It removes loopholes and weaknesses in earlier statutes by creating liability for web hosting services that ignore the abuse of their customers, adds violations for new forms of spyware and removes some of the hurdles in proving cases against violators.

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Source: The Federal Trade Commission.

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