Privacy Advisor

Close Up On… Recent State Action

November 1, 2005

Spyware
Pennsylvania — The House Commerce Committee has replaced a broad spyware bill with language modeled after the California law prior to advancing it out of committee. As passed by the committee on Oct. 19, HB 1697 would make it a felony, subject to 10 years in jail and/or a $25,000 fine, to intentionally copy or install unauthorized "deceptive" software. HB 1697 now goes to the House Floor.

Massachusetts — The Joint Economic Development and Emerging Technologies Committee held a hearing October 25, to discuss three spyware bills. The bills, which have not advanced, are modeled after Utah HB 323, the WhenU spyware/pop-up law enacted in 2004 (and then repealed).

HB 3739, SB 273 and SB 286 would prohibit:

The installation of spyware on another person's computer.

An action that would cause spyware to be installed on another person's computer.

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 Internet Web site.

The bills also would create a private right of action for an Internet Web site owner or registrant, a trademark or copyright owner, or an authorized advertiser on an Internet Web site. They may obtain an injunction and recover actual damages or $10,000 for each separate violation. A court may triple the damages if it finds the defendant willfully or knowingly violated the law. A separate violation occurs for each individual occurrence that results in the display of an advertisement.

Meanwhile, the Massachusetts Joint Consumer Protection and Professional Licensure Committee is expected to advance HB 1444, a California model spyware bill during a November 3 hearing.

Michigan — The House Judiciary Chair has delayed debate on spyware. According to House Judiciary Chairman William Van Regenmorter, (R-Kent/Ottawa), his staff is still working to incorporate suggested industry amendments to SB 151.

In early October, industry met with Van Regenmorter and explained concerns with SB 151, a bill that would prohibit a person from displaying or causing to display a pop-up advertisement using spyware infringing upon a trademark. SB 151 also contains language allowing a private right of action and does not adequately exempt technologies such as cookies and Web beacons.

Two additional bills that may be considered are SB 53 and SB 54, which would prohibit installing software onto a computer that deceptively collects personal information without a user's consent. The bills would also make it illegal to modify or disable Internet settings, antivirus software or other security programs. Violators would be committing a felony and could be sentenced to five years in prison and/or pay a maximum $10,000 fine. Victims could obtain a court injunction and receive up to $10,000 in damages.

Violent Video Games Update
Lawmakers and activists are concerned that there are video games that are too violent for children and have asked the states to regulate and restrict their sales.

Just this month, California Governor Arnold Schwarzenegger signed AB 1179, a law that will provide stiff penalties to retailers selling violent games to minors. It also requires that mature games be clearly labeled. The Interactive Entertainment Merchants Association (IEMA) described the legislation as unnecessary and threatening to freedom of expression.

According to IEMA, the law creates a California-only class of products requiring retailers to buy, warehouse and distribute California video games separately from other inventory. IEMA feels the law is unnecessary and unconstitutional.

The Entertainment Software Association (ESA) joined forces with the Video Software Dealers Association to challenge the California law arguing it restricts First Amendment rights. Similar court battles are pending in Michigan and Illinois.

There are at least five states: Illinois, Indiana, Michigan, Missouri, and Washington, that already regulate violent video games, but the legislative fight escalated in 2005. A total of 28 bills were filed in 15 states. Those states were: Alabama, Arizona, California, Florida, Georgia, Maryland, Michigan, Minnesota, North Carolina, New York, Pennsylvania, Texas, Virginia, Washington and Wisconsin.

Court challenges to the existing laws have been successful. In June 2004, a federal appeals court overturned a St. Louis County, Missouri, law restricting minors' access to some video games. The court reversed a district court's conclusion that video games are not protected speech. The court found that St. Louis County's contention that the games can damage some players' psychological health was "unsupported in the record." Another appeals court struck down a similar law in Indiana in 2001. Shortly thereafter, a federal judge struck down Washington State's ban on selling some violent video games to minors, calling it a violation of free speech.

Lawmakers supporting the regulations have not been deterred by the adverse court decisions. The issue will be back in 2006.

A Florida Senator already has prefiled a bill that would ban the sale or rental of violent video games to minors. SB 494, which is almost identical to the legislation recently signed into law in California, would prohibit a person from selling or renting a video game to a minor when labeled as "violent" and seeks to impose the same $1,000 fine on retailers who break the law. The Florida bill requires games with violent content to bear a two-inch square "18 rating" sticker. However, the Florida bill goes one step further — it also restricts minors from accessing violent video games in arcades.

Emily Hackett is Executive Director of the Internet Alliance, the leading Internet trade association operating in the states. The IA represents a broad spectrum of Internet users, including marketers, content providers, ISPs and consumers. She can be reached at (202) 861-2476 or emilyh@internetalliance.org.