Developments of Note

The Federal Trade Commission (FTC) settled the charges against an online shopping-cart software provider that rented personal information about its merchants' customers to third parties, in violation of the merchants' privacy policies. In re Vision I Properties, LLC, No. 042 3068 (FTC Mar. 10, 2005). The FTC complaint alleged that the provider's actions constituted an unfair practice in interstate commerce. The settlement bars disclosure of previously collected personal information, requires the company to remit the profit it made from selling the information, and bars future misrepresentations by the provider about the collection, use or disclosure of personally identifiable information. The press release is available at www.ftc.gov/opa/2005/03/cartmanager.htm.

The bill revamping the Utah Spyware Control Act was signed into law on March 17, with an effective date of May 2. H.B. 104 defines “spyware” as software on the computer of a Utah resident that “collects information about an Internet website at the time the Internet website is being viewed” in Utah, and uses that information “contemporaneously to display pop-up advertising on the computer.” The definition is further refined to exclude various functionalities, including diagnostic and security software and cookies, among other things. The new legislation revises the Spyware Control Act that became effective last year. The enforcement of the act was enjoined last year in WhenU.com v Utah (Utah 3d Judicial Dist. Ct. June 22, 2004), on the grounds that WhenU had shown a likelihood of prevailing on its claim that the legislation violated the Commerce Clause of the U.S. Constitution. The text of the legislation is available at www.le.state.ut.us/~2005/bills/hbillint/hb0104s01.pdf.

The Texas Attorney General has filed suit against Voice over Internet Protocol (VoIP) service provider Vonage, alleging that the company violated Texas consumer laws when it failed to adequately inform subscribers of the service's limited access to emergency 911 calling features. State v. Vonage Holdings Corp., No. GV 500657 (Tex. Dist. Ct. Travis Cty Mar. 22, 2005). The complaint alleges that Vonage advertises its service as a replacement for traditional telephone service, but that the representation is false and misleading because, unlike 911 service provided by traditional telephone providers, Vonage emergency 911 service must be specifically requested, does not automatically inform a 911 call recipient of the caller's location and may, in some instances, give incorrect location information. The service also, the suit alleges among other things, may not be functional during electrical outages. The attorney general's press release, including a link to the complaint, is available at www.oag.state.tx.us/oagnews/release.php?id=850&PHPSESSID=q9h60u5ud7bcsfb90iq94sscg4.

FTC Settles Charges e-Comm
Provider Rented Customer Data

The Federal Trade Commission (FTC) settled the charges against an online shopping-cart software provider that rented personal information about its merchants' customers to third parties, in violation of the merchants' privacy policies. In re Vision I Properties, LLC, No. 042 3068 (FTC Mar. 10, 2005). The FTC complaint alleged that the provider's actions constituted an unfair practice in interstate commerce. The settlement bars disclosure of previously collected personal information, requires the company to remit the profit it made from selling the information, and bars future misrepresentations by the provider about the collection, use or disclosure of personally identifiable information. The press release is available at www.ftc.gov/opa/2005/03/cartmanager.htm.

The bill revamping the Utah Spyware Control Act was signed into law on March 17, with an effective date of May 2. H.B. 104 defines “spyware” as software on the computer of a Utah resident that “collects information about an Internet website at the time the Internet website is being viewed” in Utah, and uses that information “contemporaneously to display pop-up advertising on the computer.” The definition is further refined to exclude various functionalities, including diagnostic and security software and cookies, among other things. The new legislation revises the Spyware Control Act that became effective last year. The enforcement of the act was enjoined last year in WhenU.com v Utah (Utah 3d Judicial Dist. Ct. June 22, 2004), on the grounds that WhenU had shown a likelihood of prevailing on its claim that the legislation violated the Commerce Clause of the U.S. Constitution. The text of the legislation is available at www.le.state.ut.us/~2005/bills/hbillint/hb0104s01.pdf.

The Texas Attorney General has filed suit against Voice over Internet Protocol (VoIP) service provider Vonage, alleging that the company violated Texas consumer laws when it failed to adequately inform subscribers of the service's limited access to emergency 911 calling features. State v. Vonage Holdings Corp., No. GV 500657 (Tex. Dist. Ct. Travis Cty Mar. 22, 2005). The complaint alleges that Vonage advertises its service as a replacement for traditional telephone service, but that the representation is false and misleading because, unlike 911 service provided by traditional telephone providers, Vonage emergency 911 service must be specifically requested, does not automatically inform a 911 call recipient of the caller's location and may, in some instances, give incorrect location information. The service also, the suit alleges among other things, may not be functional during electrical outages. The attorney general's press release, including a link to the complaint, is available at www.oag.state.tx.us/oagnews/release.php?id=850&PHPSESSID=q9h60u5ud7bcsfb90iq94sscg4.