The revised measure would place strict privacy restrictions on e-mail providers in the state, but it appears to fall short of barring Google's new service.
The bill passed after revisions that removed a key provision that would have required e-mail providers to win the consent of anyone sending messages to their service before scanning messages.
"My legislation guarantees that our most private communications will remain just that--private," said Sen. Liz Figueroa, D-Fremont, the bill's author, according to a statement.
In a statement, Google said that it is taking a neutral position on the bill as it continues to work with Figueroa on the measure.
"Google has worked in good faith with Senator Figueroa and her staff to address her concerns about privacy and online communications," the company wrote. "We believe we have reached conceptual agreement on most of the key points, but we have not yet reached agreement on all the details. As is the norm in the legislative process, work still remains on the specific language of the bill."
The Senate action comes as Google is seeking to fend off an unexpected backlash against Gmail, a Web-based e-mail service that turned heads when it was unveiled in late March with an offer of 1GB of free storage.
Google touted the service as a reinvention of e-mail, one based on a searchable database archive, rather than traditional folder systems. Still, some critics raised concerns that Gmail could subject consumers to unwarranted privacy risks.
First, the amount of storage offered means that customers might never again have to delete e-mail, eventually creating a vast repository of personal correspondence that could be subject to review by police and other outsiders. Second, Google proposed placing ads in messages based on the mail's content, requiring customers to agree to let the company scan their correspondence for keywords.
Figueroa's bill would explicitly allow e-mail and instant-messaging providers to scan the content of messages to deliver advertisements, as long as the providers meet certain restrictions on how the data is used. Information gleaned from e-mails cannot be retained, shared with a third party, or shown to any employee or other "natural person," according to the bill. In addition, messaging providers must permanently delete messages at the request of customers.
The bill carves out some exceptions for antispam and virus filtering.
Technology groups opposing the bill noted this week that limits on e-mail scanning would appear to affect a large number of widely used industry practices that have not sparked any privacy concerns to date.
"We are unaware of any instances in which a consumer has been harmed as a result of the computer scanning that takes place today. In fact, we believe that the scanning technology is evolving largely in the pursuit of protecting consumers' interest," the American Electronics Association wrote in a letter to Figueroa on Wednesday. "Examples include spam and virus filtering, searching, spellchecking, auto-responding, managing mailing lists, flagging urgent messages, converting incoming e-mail to cell phone text messages, automatic saving and sorting into folders, converting text URLs to clickable links, converting date stamps to local time zones, building automatic address books, and so forth."