AOL drops consumer-tracking feature
The company plans to scrap a customer-tracking feature in a software product that speeds file downloads, as it faces a lawsuit claiming the offering can be used to eavesdrop on consumer habits.
A lawsuit filed in June and amended Thursday alleges that AOL subsidiary Netscape Communications' SmartDownload product can send information about user downloads to the company. The suit is filed in U.S. District Court in New York.
The plaintiff, who is seeking to have the suit declared a class action, claims that the product violates the Electronic Communications Privacy Act (ECPA) and the Computer Fraud and Abuse Act (CFAA).
The ECPA bars the interception and use of any electronic communication. The CFAA prohibits unauthorized access to a computer to obtain information from that system. Violations of both acts could lead to a company's having to pay damages to plaintiffs if found guilty.
AOL spokesman Andrew Weinstein denounced the lawsuit as "totally without merit," though he added that the company plans to remove the feature from SmartDownload in future versions.
The collection of consumer information is a sensitive topic that has pitted Net companies against privacy advocates. On one hand, companies view user data as marketers' gold, allowing Web sites to deliver more relevant advertisements or provide information about people's habits. On the other hand, privacy advocates have drawn a line in the sand, saying the Internet's data-gathering capabilities should only go so far.
A few high-profile cases have kept privacy issues in the spotlight. Web streaming company RealNetworks last year was slapped with class-action lawsuits accusing the company of violating the privacy of millions of Net music listeners.
In October of last year, privacy scouts discovered that RealNetworks had assigned globally unique identification numbers to users of its RealJukebox music player. The software could have allowed RealNetworks to track its users' habits without their knowledge. The company immediately issued a software patch that disabled the unique identification feature.
Earlier this year, Internet ad firm DoubleClick came under fire for its plans to combine the online and offline data that it collects from consumers. The controversy arose after the company acquired data-collection agent Abacus Direct, which works with offline companies, for $1.7 billion.
Privacy advocates feared that the combination of data collected by DoubleClick's ad-serving network with Abacus' personal information gathering would lead to consumer privacy abuse. The practice caught the attention of the Federal Trade Commission and of legislators from several states.
"There's no legal prohibition against doing this," said David Sobel, general counsel for the Electronic Privacy Information Center, an online privacy watchdog group. "A lot of companies are building these (software features)...and they're subject to very little recourse once they're discovered."
Still, tough consumer 
scrutiny has forced companies to work overtime to convince the public that their data-collection practices do not go over the line. Last week, for example, online advertising network Radiate released software aimed at giving people on its ad network more control over their personal information, and perhaps more importantly, at quelling fears that the company is misusing data it collects.
Radiate, formerly known as Aureate, felt the bite of consumer backlash earlier this year as word spread of alleged privacy violations stemming from its technology. The company serves ads to people who use free software products, including the popular file transfer agent CuteFTP. Some people believed that the company was secretly collecting sensitive data such as credit card numbers--something company executives deny.
Though Radiate creates customer profiles, all information used is provided voluntarily when people sign up for one of 500 free software products that use the company's ad network to generate revenues, a company spokesman said. To prove its intentions, the company last week released software that allows people to edit their profiles as often as they like.
AOL said its decision not to include the tracking feature in its upcoming software was because it never used it anyway.
Netscape's SmartDownload lets Net users download files encoded in ".exe" or ".zip," two common formats for accessing software on the Web. The lawsuit alleges that SmartDownload can relay information about software users' identities and the types of downloads once it's installed alongside Netscape's Communicator Web browser.
"The feature at issue was included in the software in part for tech-support purposes," AOL's Weinstein said. "We have never used nor accessed any information about SmartDownload users or files and plan to take it out of future versions of the product."
As for the lawsuit against AOL's SmartDownload, the attorney representing the suit plans to continue pursuing class-action status for the case. The current suit has only four plaintiffs listed.
"We expect the judge to certify class, and we believe there are millions of class members," said Joshua Rubin, an attorney for the law firm Abbey Gardy & Squitieri, which filed the suit.