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Why they say spyware is good for you

CNET News.com's Declan McCullagh explains the growing trend behind installing spyware on Windows PCs without obtaining proper permission.

Sony rightly came under fire last week from programmers and Internet users for injecting an undetectable copy-prevention utility into Microsoft Windows when certain CDs are inserted.

Now the lawyers are taking aim, too. Robert Green, a partner at the San Francisco firm of Green Welling, says he's readying a class action lawsuit against Sony.

"We're still investigating the case and talking to different people about what happened to them," Green said on Friday. He plans to argue that under California law, if you buy a copy-protected CD from a music store, you should be informed that a spyware-like utility will be implanted on your hard drive.

The fuss last week began when Mark Russinovich, a Windows programmer and author, posted a description of how he traced some mysterious processes and hidden files on his computer back to SonyBMG's "Get Right with the Man" CD. It turned out that they were part of Sony's digital rights management technology designed to thwart illicit copying.

It's a wacky result when both Sony and its hapless customers could be embroiled in legal hot water at the same time.

Sony has backpedaled a little, saying that the hidden files can be uncloaked. But customers still have to beg for help if they want to uninstall the software.

Still, it may be too late for the entertainment giant to fend off the plaintiff's bar. One recent court case in Illinois, Soleto v. DirectRevenue, sets a nonbinding precedent that lawyers expect to be invoked against Sony.

In that case, DirectRevenue was sued for installing spyware on Windows computers without obtaining proper authorization from a user. U.S. District Judge Robert Gettleman said the company could be sued on trespass, Illinois consumer fraud, negligence, and computer tampering grounds.

Then there's a California spyware-related law that says a company may not "induce" anyone to "install a software component" by claiming installation is necessary to "open, view or play a particular type of content."

Translation: Sony could be in double trouble. Its Windows software is hardly necessary to play music--the disc works just fine on a Macintosh or in an old-fashioned CD player.

Meanwhile, dozens of other states are considering similar laws, each with slightly different wording. So is Congress.

The blunderbuss of the DMCA
In a bizarre twist, though, it's not only Sony that could be facing a legal migraine. So could anyone who tries to rid their computer of Sony's hidden anticopying program.

That's because of Section 1201 of the Digital Millennium Copyright Act, which bans the "circumvention" of anticopying technology.

"I think it's pretty clear that circumventing Sony's controls violates the DMCA," says Tim Wu, a Columbia University professor who teaches copyright law. (Violations of the DMCA include civil fines, injunctions, computer confiscations, and even criminal penalties.)

Wu noted that one possible reprieve might come from last year's ruling from a federal appeals court in a case dealing with garage door openers--it said no copyright violations were taking place, so no DMCA violation occurred. Then again, another federal appeals court objected to bypassing anticopying technology used in DVDs, which is probably a closer analogy.

A bizarre result
If your head isn't spinning by now, it should be. It's a wacky result when both Sony and its hapless customers could be embroiled in legal hot water at the same time.

These citations to state laws, federal statutes and common law torts above should demonstrate an obvious point: The American legal system is, all too often, used as a weapon against businesses or individuals who can't hope to comply with every regulation on the books. Entrepreneurs write checks to law firms instead of developing products. Guilt and innocence turn too often on technicalities rather than whether an action was inherently right or wrong.

Why? As Manhattan Institute fellow Walter Olson documents on OverLawyered.com, our legal system is set up to encourage lawsuits. They're easy to file and difficult to dismiss. Plus, politicians receive attention by enacting new laws, not by repealing them. No wonder the Federal Register was growing by between 55,000 and 70,000 pages annually even by the first Bush presidency.

In one 1999 class action lawsuit ostensibly filed on behalf of flight attendants against tobacco companies, for instance, the attendants received nothing in the settlement. But the lawyers pocketed $49 million. After Microsoft's federal antitrust suit was over, dozens of class action suits sprouted, yielding negligible benefits for consumers--but fat paychecks for the lawyers involved.

Of course, malicious behavior that harms someone else should be unlawful. But whatever happened to the concept of a few basic rules--don't steal, don't commit fraud--rather than thousands of pages of bureaucratelia that few of us can hope to understand, let alone follow?

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