• FTC Tells Congress to Forget the Anti-Spyware Plans
  • November 19, 2004
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • The Federal Trade Commission again has warned Congress -- this time in a November 5, 2004 speech by FTC Commissioner Orson Swindle -- that anti-spyware legislation is at best redundant of existing fraud laws and at worst will "cause enormous problems" if the legislation is poorly drafted.

    "Our experience at the Department of Justice and at the FTC is that [current] law is adequate," Swindle said. "Most, if not all, spyware is executed under a deceptive cloud. If people are deceived, it's a deceptive practice."

    The FTC has been sparring with Congress all year over the need for anti-spyware legislation. In a spyware workshop the FTC held in April, it concluded that technology solutions, combined with current deceptive practice laws, would be superior to any new laws.

    Notwithstanding the FTC's position, as reported in the October 25, 2004 issue of [email protected], Congress is considering three anti-spyware bills, two in the House of Representatives and one in the Senate. None of the bills are likely to survive when Congress reconvenes in a lame-duck session on November 16, 2004, but anti-spyware advocates have vowed to revive the legislation when the new Congress meets in January.

    Swindle said the biggest problem facing the FTC is not the need for new laws, but the ability to locate and prosecute spyware vendors. "I'm of the opinion that many of the scams in this country are short-lived. They get a lot of money, they take a lot of money and the guys are out of there," Swindle said. "Sometimes they get caught and they don't have any money left. The cost of getting caught amounts to nothing more than another line item on the balance sheet."

    Swindle pointed to the FTC's first case filed against a spyware operator in October as an example of the current law working (see the October 25, 2004 issue of [email protected] for a report on that case). "We didn't need a new law to get that done," Swindle said. "We're confident we're going to win that case and there's more coming."

    Swindle cautioned Congress about the unintended consequences legislation can have: "First you have to get by defining what spyware is," Swindle said. "Poorly written legislation can cause enormous problems. We have to write rules based on laws passed by Congress in order to implement the law. Quite frankly, sometimes we have no earthly idea what the Congress meant to say."

    Significance: With the elections behind, Congress may not be as enthusiastic about anti-spyware legislation as it was this summer, although spyware remains an easy political target for lawmakers looking to score points with a public worried about spyware. The problem, as Swindle points out, is that hastily and poorly drafted legislation can create more problems than it resolves, by, for instance, unintentionally affecting legitimate, law-abiding marketers.