For further reading (optional):
Computers are good at tracking and remembering, sorting and extracting. The ease of
information collection has tended to shape our online privacy – or lack thereof. As
Jerry Yang puts it:
[I]magine the following two visits to a mall, one in real space, the other in cyberspace. In real space, you drive to a mall, walk up and down its corridors, peer into numerous shops, and stroll through corridors of inviting stores. Along the way, you buy an ice cream cone with cash. You walk into a bookstore and flip through a few magazines. Finally, you stop at a clothing store and buy a friend a silk scarf with a credit card. In this narrative, numerous persons interact with you and collect information along the way. For instance, while walking through the mall, fellow visitors visually collect information about you, if for no other reason than to avoid bumping into you. But such information is general - e.g., it does not pinpoint the geographical location and time of the sighting - is not in a format that can be processed by a computer, is not indexed to your name or another unique identifier, and is impermanent, residing in short-term human memory. You remain a barely noticed stranger. One important exception exists: The scarf purchase generates data that are detailed, computer-processable, indexed by name, and potentially permanent.
By contrast, in cyberspace, the exception becomes the norm: Every interaction is like the credit card purchase. The best way to grasp this point is to take seriously, if only for a moment, the metaphor that cyberspace is an actual place, a computer-constructed world, a virtual reality. In this alternate universe, you are invisibly stamped with a bar code as soon as you venture outside your home. There are entities called "road providers," who supply the streets and ground you walk on, who track precisely where, when, and how fast you traverse the lands, in order to charge you for your wear on the infrastructure. As soon as you enter the cyber-mall's domain, the mall begins to track you through invisible scanners focused on your bar code. It automatically records which stores you visit, which windows you browse, in which order, and for how long. The specific stores collect even more detailed data when you enter their domain. For example, the cyber-bookstore notes which magazines you skimmed, recording which pages you have seen and for how long, and notes the pattern, if any, of your browsing. It notes that you picked up briefly a health magazine featuring an article on St. John's Wort, read for seven minutes a newsweekly detailing a politician's sex scandal, and flipped ever-so-quickly through a tabloid claiming that Elvis lives. Of course, whenever any item is actually purchased, the store, as well as the credit, debit, or virtual cash company that provides payment through cyberspace, takes careful notes of what you bought - in this case, a silk scarf, red, expensive.
All these data generated in cyberspace are detailed, computer-processable, indexed to the individual, and permanent. While the mall example does not concern data that appear especially sensitive, the same extensive data collection takes place as we travel through other cyberspace domains - for instance: to research health issues and politics; to communicate to individuals, private institutions, and the state; and to pay our bills and manage our finances. Moreover, the data collected in these various domains can be aggregated to produce telling profiles of who we are, as revealed by what we do and say. The very technology that makes cyberspace possible also makes detailed, cumulative, invisible observation of our selves possible. One need only sift through the click-streams generated by our cyber-activity. The information we generate as a by-product of this activity is quite valuable. The private sector seeks to exploit it commercially, but individuals resist. Both sides lay powerful, clashing claims to this data generated in cyberspace. How we resolve this conflict warrants careful discussion.
Jerry Kang, Information Privacy in Cyberspace Transactions, 50 Stan. L. Rev. 1193, 1198-99
(1998)
Unless you take specific steps to cover your tracks, browsing the web often
means leaving a "clickstream" trail. Webservers log your computer's Internet Protocol (IP) address
with each web page request. They may set "cookies," small identification files on
your computer, to track browsing activity within and between web sessions. If you
enter personally identifying information to make a purchase or enter a give-away, sites
may be able to tie the browsing habits to you individually.
These technologies can work for us: Cookies and tracking enable Amazon to build
"your store" around your past purchases and the likes of similar customers; they
allow you to put an item into a virtual "shopping cart" to pay
for later; they let you re-organize the news on the Google news homepage.
With the added convenience come privacy concerns. Can the breadcrumbs we leave in
our online travels be gathered to be used against us? Do those tracking
us through cyberspace have our best interests in mind, or will they sell
our profiles to advertisers, spam us with unwanted marketing, or use the information
to charge us more for products we're predicted to need? Will the massive
private databases become tempting targets for government subpoenas or third-party discovery requests, as
well as for data-mining by those who collect information?
Currently, we address these privacy concerns with a grab-bag of law, code, and
industry self-regulation (norms and markets). There is no comprehensive U.S. privacy law, instead
privacy is protected through FTC regulation of "unfair or deceptive acts or practices";
private lawsuits for tort and contract; and claims under federal statute. Internet users
engage in self-help by erasing browser cookies, installing pop-up blockers, or giving false
information in web forms.
The Federal Trade Commission takes authority to oversee privacy practices from § 5 of
the FTC Act (15 U.S.C. §§ 41-58, as amended). As the FTC describes:
Under this Act, the Commission is empowered, among other things, to (a)
prevent unfair methods of competition, and unfair or deceptive acts or practices in
or affecting commerce; (b) seek monetary redress and other relief for conduct injurious
to consumers; (c) prescribe trade regulation rules defining with specificity acts or practices
that are unfair or deceptive, and establishing requirements designed to prevent such acts
or practices; (d) conduct investigations relating to the organization, business, practices, and management
of entities engaged in commerce; and (e) make reports and legislative recommendations to
Congress.
The FTC complaint and settlement order (optional) in In re Geocities shows how this
enforcement authority can be used. Does the settlement order look
like much of a deterrent?
In re Doubleclick, Inc. Privacy Litigation, by contrast, is a private class action invoking
federal computer crime and wiretap law. Read it less for the specific details
of the federal laws than to see how poorly suited they can be to
resolve consumer privacy concerns. As one example where they do reach, however, the First Circuit upheld a Wiretap Act indictment against a bookstore that offered email accounts to its customers,
then intercepted email messages from Amazon to those users. United States v. Councilman,
418 F.3d 67 (1st Cir. 2004):
Defendant-appellee Bradford C. Councilman was Vice President of Interloc, Inc., which ran an online rare and out-of- print book listing service. As part of its service, Interloc gave book dealer customers an e-mail address at the domain "interloc.com" and acted as the e-mail provider. Councilman managed the e-mail service and the dealer subscription list.
According to the indictment, in January 1998, Councilman directed Interloc employees to intercept and copy all incoming communications to subscriber dealers from Amazon.com, an Internet retailer that sells books and other products. Interloc's systems administrator modified the server's procmail recipe so that, before delivering any message from Amazon.com to the recipient's mailbox, procmail would copy the message and place the copy in a separate mailbox that Councilman could access. Thus, procmail would intercept and copy all incoming messages from Amazon.com before they were delivered to the recipient's mailbox, and therefore, before the intended recipient could read the message. This diversion intercepted thousands of messages, and Councilman and other Interloc employees routinely read the e-mail messages sent to Interloc subscribers in the hope of gaining a commercial advantage. … On July 11, 2001, a grand jury returned a two-count indictment against Councilman.
Finally, businesses too recognize they must respond to consumers' privacy concerns. Customers won't
shop online if they are too afraid of having their data misused. Further,
if the public raises a privacy outcry and companies fail to respond, the
government may feel compelled to step in. To ward off government regulation, companies
have stepped up with self-regulation through policies and through code.
On the policy side, most popular websites now post "privacy policies," describing the data they collect and their planned uses for it. Look at StopBadware's report on Facebook's Beacon, chronicling a company's privacy misstep and retreat. Is self-regulation enough?
Some online companies ask third party
clearinghouse TRUSTe to certify their practices. Browse the TRUSTe website, <http://www.truste.org/>, to see
what certification entails. Does it reassure you about the practices of the sites
where the seal appears?
In May 2000, the Federal Trade Commission issued a report to Congress, Fair Information Practices in the Electronic Marketplace. The FTC found that "self-regulatory initiatives to date fall far short of broad-based implementation of effective self-regulatory programs," and recommended that Congress enact new privacy-protective legislation:
Consumer-oriented commercial Web sites that collect personal identifying information from or about consumers online would be required to comply with the four widely-accepted fair information practices:(1) Notice -- Web sites would be required to provide consumers clear and conspicuous notice of their information practices, including what information they collect, how they collect it (e.g., directly or through non-obvious means such as cookies), how they use it, how they provide Choice, Access, and Security to consumers, whether they disclose the information collected to other entities, and whether other entities are collecting information through the site.
(2) Choice -- Web sites would be required to offer consumers choices as to how their personal identifying information is used beyond the use for which the information was provided (e.g., to consummate a transaction). Such choice would encompass both internal secondary uses (such as marketing back to consumers) and external secondary uses (such as disclosing data to other entities).
(3) Access -- Web sites would be required to offer consumers reasonable access to the information a Web site has collected about them, including a reasonable opportunity to review information and to correct inaccuracies or delete information.
(4) Security -- Web sites would be required to take reasonable steps to protect the security of the information they collect from consumers.
Although its proposed legislation was never adopted, the fair information practices principles, and a final, enforcement, component, are helpful criteria against which to analyze existing privacy law and practices. Take a look at a website you use frequently to see how its privacy practices square with these principles.
Law might not be the only way to protect privacy. P3P was an ambitious effort to take privacy policies beyond legal text to computer code. As proposed by the World-Wide Web Consortium (W3C), the "Platform for Privacy Preferences Project" provided a technical means for sites to describe their privacy practices. Users could configure their web browsers to accept or reject communications with sites based on whether the privacy policies met their preferences. Some of these features were included in IE6, but never reached widespread adoption. Read the W3C's P3P overview, <http://www.w3.org/TR/NOTE-P3P-CACM/>. Would we be better off using P3P widely to protect privacy?
Posted by Maxim Weinstein, StopBadware.org Wed, 05 Dec 2007 22:00:00 GMT
Social networking site Facebook has been on the defensive lately
for a variety of poor privacy and dislosure related decisions about
its Beacon application. Beacon, which is turned on by default for
Facebook users, allows users to update their Facebook news feed with
information about recent purchases and other activities on third
party web sites, such as Blockbuster.com, Overstock.com, and
Epicurious.com.
To its credit, Facebook has worked fairly quickly to respond to many
of the complaints:
The engineers we spoke with at Facebook also point out that they
built the system originally to ensure that data stored by Facebook,
including e-mail addresses and other contact information, is never
provided to the third party web sites.
We applaud Facebook’s commitment to privacy and its
responsiveness to the community throughout this process. We
don’t fully agree, however, with the conclusion of CEO Mark Zuckerberg’s statement where he
says, “[I] hope that this new privacy control addresses any
remaining issues we’ve heard about from you.” In our
discussions with Facebook during the past 24 hours, we have raised a
couple other privacy issues that we hope the Facebook team will still
address:
We wish to thank Facebook for engaging in dialogue with us on these issues, and we encourage its leadership to continue listening to and learning from the community so the company can reach the goal they expressed to us of becoming a leader in user privacy.
154 F. Supp. 2d 497 (S.D.N.Y. 2001)
NAOMI REICE BUCHWALDDoubleClick compiles user profiles utilizing its proprietary technologies and analyses in cooperation with its affiliated Web sites. DoubleClick is affiliated with over 11,000 Web sites for which and on which it provides targeted banner advertisements. A select group of over 1,500 of these Web sites form the "DoubleClick Network" and are among "the most highly trafficked and branded sites on the Web." In addition, DoubleClick owns and operates two Web sites through which it also collects user data: (1) the Internet Address Finder ("IAF"); and (2) NetDeals. com.
When users visit any of these DoubleClick-affiliated Web sites, a
"cookie" is placed on their hard drives. Cookies are computer
programs commonly used by Web sites to store useful information such as
usernames, passwords, and preferences, making it easier for users to access Web
pages in an efficient manner. However, Plaintiffs allege that DoubleClick's
cookies collect "information that Web users, including plaintiffs and the
Class, consider to be personal and private, such as names, e-mail addresses,
home and business addresses, telephone numbers, searches performed on the
Internet, Web pages or sites visited on the Internet and other communications
and information that users would not ordinarily expect advertisers to be able
to collect." DoubleClick's cookies store this personal information on
users' hard drives until DoubleClick electronically accesses the cookies and
uploads the data.
How DoubleClick targets banner advertisements and utilizes cookies to collect
user information is crucial to our analysis under the three statutes.
Therefore, we examine both processes in greater detail.
A. Targeting Banner Advertisements
DoubleClick's advertising targeting process involves three participants and
four steps. The three participants are: (1) the user; (2) the
DoubleClick-affiliated Web site; (3) the DoubleClick server. For the purposes
of this discussion, we assume that a DoubleClick cookie already sits on the
user's computer with the identification number " # 0001."
In Step One, a user seeks to access a DoubleClick-affiliated Web site such as
Lycos.com. The user's browser sends a communication to Lycos.com (technically,
to Lycos.com's server) saying, in essence, "Send me your homepage." U.S. Patent No. 5,948,061 (issued
In Step Two, Lycos.com receives the request, processes it,
and returns a communication to the user saying "Here is the Web page you
requested." The communication has two parts. The first
part is a copy of the Lycos.com homepage, essentially the collection
article summaries, pictures and hotlinks a user sees on his screen when Lycos.com
appears. The only objects missing are the banner advertisements; in their
places lie blank spaces. The second part of the
communication is an IP-address link to the DoubleClick server. This link
instructs the user's computer to send a communication automatically to
DoubleClick's server.
In Step Three, as per the IP-address instruction, the user's computer sends a
communication to the DoubleClick server saying "I am cookie # 0001, send me banner advertisements to fill the blank spaces
in the Lycos.com Web page." This communication contains information
including the cookie identification number, the name of the
DoubleClick-affilated Web site the user requested, and the user's browser-type.
Finally, in Step Four, the DoubleClick server identifies the user's profile by
the cookie identification number and runs a complex set of algorithms based, in
part, on the user's profile, to determine which advertisements it will present to
the user. It then sends a communication to the user with banner advertisements
saying "Here are the targeted banner advertisements for the Lycos.com
homepage." Meanwhile, it also updates the user's profile with the
information from the request.
DoubleClick' s targeted advertising process is
invisible to the user. His experience consists simply of requesting the
Lycos.com homepage and, several moments later, receiving it complete with
banner advertisements.
B. Cookie Information Collection
DoubleClick's cookies only collect information from one step of the above
process: Step One. The cookies capture certain parts of the communications that
users send to DoubleClick-affiliated Web sites. They collect this information
in three ways: (1) "GET" submissions, (2) "POST"
submissions, and (3) "GIF" submissions.
GET information is submitted as part of a Web site's address or
"URL," in what is known as a "query string." For example, a
request for a hypothetical online record store's selection of Bon Jovi albums
might read: http://recordstore.hypothetical.com/search?terms=bonjovi.
The URL query string begins with the "?" character meaning the cookie
would record that the user requested information about Bon Jovi.
Users submit POST information when they fill-in multiple blank fields on a
webpage. For example, if a user signed-up for an online discussion group, he
might have to fill-in fields with his name, address, email address, phone
number and discussion group alias. The cookie would capture this submitted POST
information.
Finally, DoubleClick places GIF tags on its affiliated Web sites. GIF tags are
the size of a single pixel and are invisible to users. Unseen, they record the
users' movements throughout the affiliated Web site, enabling DoubleClick to
learn what information the user sought and viewed.
Although the information collected by DoubleClick's cookies is allegedly
voluminous and detailed, it is important to note three clearly defined
parameters. First, DoubleClick's cookies only collect information concerning
users' activities on DoubleClick-affiliated Web sites. Thus, if a user visits
an unaffiliated Website, the DoubleClick cookie captures no information.
Second, plaintiff does not allege that DoubleClick ever attempted to collect
any information other than the GET, POST, and GIF information submitted by
users. DoubleClick is never alleged to have accessed files, programs or other
information on users' hard drives. Third, DoubleClick will not collect
information from any user who takes simple steps to prevent DoubleClick's
tracking. As plaintiffs' counsel demonstrated at oral argument, users can
easily and at no cost prevent DoubleClick from collecting information from
them. They may do this in two ways: (1) visiting the DoubleClick Web site and
requesting an "opt-out" cookie; and (2) configuring their browsers to
block any cookies from being deposited.
Once DoubleClick collects information from the cookies on users' hard drives,
it aggregates and compiles the information to build demographic profiles of
users. Plaintiffs allege that DoubleClick has more than 100 million user
profiles in its database. Exploiting its proprietary Dynamic Advertising
Reporting & Targeting ("DART") technology, DoubleClick and its
licensees" target banner advertisements using these demographic profiles.
ABACUS ACQUISITION AND FTC INVESTIGATION
In June 1999, DoubleClick purchased Abacus Direct
Corp. ("Abacus") for more than one billion dollars. Abacus was a
direct-marketing services company that maintained a database of names,
addresses, telephone numbers, retail purchasing habits and other personal
information on approximately ninety percent of American households, which it
sold to direct marketing companies. Plaintiffs allege that DoubleClick planned
to combine its database of online profiles with Abacus' database of offline
customer profiles in order to create a super-database capable of matching
users' online activities with their names and addresses.
In furtherance of this effort, DoubleClick created the Abacus Online Alliance
("Abacus Alliance") and amended its privacy policy. The Abacus
Alliance is purportedly a confidential group of online marketers and publishers
who secretly contribute their compiled customer data to a cooperative database
managed by DoubleClick. In return for their contributions, Abacus Alliance
members gain access to exclusive DoubleClick products and services. In
mid-1999, shortly after acquiring Abacus, DoubleClick amended its privacy
policy by removing its assurance that information gathered from users online
would not be associated with their personally identifiable information.
Not long after the Abacus acquisition, the Federal Trade Commission
("FTC") launched an investigation into whether DoubleClick's
collection, compilation and use of consumer information constituted unfair or
deceptive trade practices in violation of Section 5 of the Federal Trade
Commission Act. On March 2, 2000, Kevin
O'Connor, DoubleClick's CEO and Chairman of the Board, announced that he had
made a "mistake" by planning to merge DoubleClick's and Abacus'
databases and stated that DoubleClick would undertake no such merger until it
reached an agreement with the United States government and Internet industry
regarding privacy standards. It is unclear whether DoubleClick had already
merged any of the information.
The FTC concluded its investigation on
Based on this investigation, it appears to staff that DoubleClick never used or disclosed consumers' PII [personal identifiable information] for purposes other than those disclosed in its privacy policy. Specifically, it appears that DoubleClick did not combine PII from Abacus Direct with clickstream collected on client Web sites. In addition, it appears that DoubleClick has not used sensitive data for any online preference marketing product, in contravention of its stated online policy. We understand that DoubleClick's Boomerang product takes user data from one site to target advertising to the same user on other sites. However, the user profiles DoubleClick creates for its Boomerang clients for this targeting contains only non-PII. Furthermore, we understand that for all new Boomerang clients, DoubleClick requires by contract that the site disclose in its privacy policy that it uses DoubleClick's services to target advertising to consumers, and DoubleClick will not implement Boomerang on a site until such disclosures are posted.
The letter also noted several commitments DoubleClick made to modifying its
privacy policy to "enhance its effectiveness," including allowing a
user to request an "opt out" cookie that would prevent DoubleClick
from collecting information from that user.
DISCUSSION
Defendants move to dismiss plaintiffs' claims, pursuant to Fed.
R. Civ. P. 12(b)(6), for failure to state a claim
upon which relief may be granted. …
Claim I. Title II of the ECPA
Title II ("Title II") of the Electronic Communications Privacy Act
("ECPA"), 18
U.S.C. § 2701 et. seq. (" § 2701"), aims
to prevent hackers from obtaining, altering or destroying certain stored
electronic communications. See Sherman
& Co. v. Salton Maxim Housewares, Inc., 94 F. Supp. 2d 817, 820 (E.D. Mich.
2000) ("the ECPA was primarily designed to provide a cause of action
against computer hackers") (quoting State
Wide Photocopy Corp. v. Tokai Fin. Serv., Inc., 909 F. Supp. 137, 145 (S.D.N.Y.
1995)). It creates both criminal sanctions and
a civil right of action against persons who gain unauthorized access to
communications facilities and thereby access electronic communications stored
incident to their transmission. Title II specifically defines the relevant
prohibited conduct as follows:
"(a) Offense. Except as provided in
subsection (c) of this section whoever-- (1) intentionally accesses without
authorization a facility through which an electronic information service is
provided; or (2) intentionally exceeds an authorization to access that
facility; and thereby obtains. . . access to a wire or
electronic communication while it is in electronic storage in such system shall
be punished. . . ."
Plaintiffs contend that DoubleClick's placement of cookies on plaintiffs' hard
drives constitutes unauthorized access and, as a result, DoubleClick's
collection of information from the cookies violates Title II. However, Title II
contains an exception to its general prohibition.
"(c) Exceptions. - Subsection (a) of this section does not apply with respect to conduct authorized-... (2) by a user of that [wire or electronic communications] service with respect to a communication of or intended for that user;"
DoubleClick argues that its conduct falls under this exception. It contends
that the DoubleClick-affiliated Web sites are "users" of the Internet
and that all of plaintiffs' communications accessed by DoubleClick's cookies
have been "of or intended for" these Web sites. Therefore, it
asserts, the Web sites' authorization excepts
DoubleClick's access from § 2701(a)'s general prohibition.
…To summarize, plaintiffs' GET, POST and GIF submissions are excepted from §
2701(c)(2) because they are "intended for"
the DoubleClick-affiliated Web sites who have authorized DoubleClick's access.
The cookie identification numbers sent to DoubleClick from plaintiffs'
computers fall outside of Title II's protection
because they are not in "electronic storage" and, even if they were,
DoubleClick is authorized to access its own communications.
In light of the above findings, we rule that all of plaintiffs' communications
accessed by DoubleClick fall under § 2701(c)(2)'s
exception or outside Title II and, accordingly, are not actionable. Therefore,
plaintiffs' claim under the Title II (Claim I) is dismissed.
Claim II. Wiretap Act
Plaintiffs' second claim is that DoubleClick violated the Federal Wiretap Act
("Wiretap Act"), 18
U.S.C. § 2510, et. seq.. The
Wiretap Act provides for criminal punishment and a private right of action
against:
"any person who-- (a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept wire, oral, or electronic communication [except as provided in the statute]." 18 U.S.C. § 2511.
For the purposes of this motion, DoubleClick concedes that its conduct,
as pled, violates this prohibition. However, DoubleClick claims that its
actions fall under an explicit statutory exception:
"It shall not be unlawful under this chapter for a person not acting under
color of law to intercept a wire, oral, or electronic communication where such
person is a party to the communication or where one of the parties to the
communication has given prior consent to such interception unless such
communication is intercepted for the purpose of committing any criminal or
tortious act in violation of the Constitution or laws of the United States or
any State." 18
U.S.C. § 2511(2)(d) ("§ 2511(2)(d)") (emphasis added).
DoubleClick argues once again that the DoubleClick-affiliated Web sites have
consented to its interceptions and, accordingly, that its conduct is exempted
from the Wiretap Act's general prohibition as it was from the Title II's.
Plaintiffs deny that the Web sites have consented and argue that even if the
Web sites do consent, the exception does not apply because DoubleClick's
purpose is to commit "criminal or tortious act[s]."
As a preliminary matter, we find that the DoubleClick-affiliated Web sites are
"parties to the communication[s]" from plaintiffs and have given
sufficient consent to DoubleClick to intercept them. In reviewing the case law
and legislative histories of Title II and the Wiretap Act, we can find no
difference in their definitions of "user" (Title II) and
"parties to the communication" (Wiretap Act) or "authorize"
(Title II) and "consent" (Wiretap Act) n23 that would make our
analysis of the Web sites' consent under Title II inapplicable to the Wiretap
Act. See discussion supra Section I(C). Therefore, the issue before us is:
assuming that DoubleClick committed every act alleged in the Amended Complaint,
could this evince a "criminal or tortious" purpose on DoubleClick's
part?
...Section 2511(2)(d)'s legislative history and caselaw make clear that the
"criminal" or "tortious" purpose requirement is to be
construed narrowly, covering only acts accompanied by a specific
contemporary intention to commit a crime or
tort. ….
In the instant case, plaintiffs clearly allege that DoubleClick has committed a
number of torts. However, nowhere have they alleged that DoubleClick's
"primary motivation" or a "determining factor" in its
actions has been to injure plaintiffs tortiously. The
Amended Complaint does not articulate any facts that could support an inference
that DoubleClick accessed plaintiffs' electronic communications with the
"insidious" intent to harm plaintiffs or others. In fact, everything
in the Amended Complaint suggests that DoubleClick has been consciously and
purposefully executing a highly-publicized market-financed business model in
pursuit of commercial gain -- a goal courts have found permissible under §
2511(2)(d). Its technology and business strategy have been described, and
indeed promoted, in the company's Security and Exchange Commission
("SEC") filings and have been the focus of numerous articles in
prominent periodicals and newspapers. Indeed, the intricate details of each
proprietary technology challenged by plaintiffs are public record in
DoubleClick's patents. See, e.g., U.S. Patent No. 5,948,061 (issued
To summarize, we find that the DoubleClick-affiliated Web
sites are "parties" to plaintiffs' intercepted communications under
the Wiretap Act and that they consent to DoubleClick's interceptions.
Furthermore, we find that plaintiffs have failed to allege that DoubleClick has
intercepted plaintiffs' communications for a "criminal or tortious"
purpose. Accordingly, we find that DoubleClick's actions are exempted from
liability under the Wiretap Act by § 2511(2)(d) and,
thus, we dismiss Claim II.
Count III. Computer Fraud and Abuse Act
Plaintiffs' final federal claim is under the Computer Fraud and Abuse Act
("CFAA"), 18
U.S.C. § 1030, et. seq. ("§ 1030") The
CFAA provides:
"[18
U.S.C. § 1030](a) - whoever... (2)(c) intentionally accesses a computer without authorization, or
exceeds authorized access, and thereby obtains... information from any
protected computer if the conduct involved an interstate or foreign
communication... shall be punished as provided in subsection (c) of this
section.""
The CFAA also provides a civil right of action for victims under 18
U.S.C. § 1030(g) ("§ 1030(g)"):
"(g) Any person who suffers damage or loss by reason of a violation of
this section may maintain a civil action against the violator to obtain
compensatory damages and injunctive relief or other equitable relief. Damages
for violations involving damage as defined in section (e)(8)(A)
are limited to economic damages..."
However, section 18
U.S.C. § 1030(e)(8) ("§ 1030(e)(8)")
limits the "damage" civilly recoverable to the following instances:
"(e)(8) the term 'damage' means any impairment to the integrity or
availability of data, a program, a system, or information that - (A) causes
loss aggregating at least $ 5,000 in value during any 1-year period to one or
more individuals; [B. Impairs medical care; C. Causes physical injury; D.
Threatens public health or safety]." (emphasis
added).
For the purposes of this motion, DoubleClick does not contest that
plaintiffs' computers were "protected" under the CFAA or that its
access was unauthorized. Instead, it claims that § 1030(e)(8)
creates a $ 5,000 damages threshold for each individual class member and that
plaintiffs have failed to plead these damages adequately. [**65] Plaintiffs argue that
"loss" under § 1030(g) is distinct from "damage" and,
accordingly, is not subject to § 1030(e)(8)'s damage
threshold. In the alternative, if § 1030(e)(8)'s
damage threshold is found applicable to plaintiffs' claims, plaintiffs argue
that they easily meet the threshold by "aggregating" losses for the
entire class over "any 1-year period."
[P]laintiffs seek damages for their "'loss' - an invasion of their
privacy, a trespass to their personal property, and the misappropriation of
confidential data by DoubleClick... [as well the cost of the] affirmative steps
[plaintiffs must take] to negate DoubleClick's wrongful unauthorized access of
their computers." …. Plaintiffs have failed to allege facts that could
support a finding that plaintiffs suffered over $ 5,000 in damages and losses
from any single act by DoubleClick.
…Plaintiffs essentially plead two bases of "damage or loss": (1)
their cost in remedying their computers and data in the wake of DoubleClick's
access, and (2) the economic value of their attention (to DoubleClick's
advertisements) and demographic information. n33 Clearly, any economic losses
plaintiffs bore in securing or remedying their systems in the wake of
DoubleClick's alleged CFAA violations would count towards § 1030(e)(8)(A)'s
damage threshold. However, as counsel demonstrated at oral argument, users may
easily and at no cost prevent DoubleClick from collecting information by simply
selecting options on their browsers or downloading an "opt-out"
cookie from DoubleClick's Web site. Similarly, they have not pled that
DoubleClick caused any damage whatsoever to plaintiffs' computers, systems or
data that could require economic remedy. Thus, these remedial economic losses
are insignificant if, indeed, they exist at all.
Plaintiffs also contend that they have suffered economic damages consisting of
the value of: (1) the opportunity to present plaintiffs with advertising; and
(2) the demographic information DoubleClick has collected. Essentially, they
argue that because companies pay DoubleClick for plaintiffs' attention (to
advertisements) and demographic information, the value of these services must,
in some part, have rightfully belonged to plaintiffs. They point to AOL in
which the court appeared to hold that damage to "reputation and
goodwill" counted towards the damage threshold and argue that, by the same
logic, the economic value of their attention and demographic information should
count as well. See AOL,
46 F. Supp. 2d at 451.
Even assuming that the economic value of plaintiffs' attention and demographic
information could be counted towards the monetary threshold -- a dubious
assumption -- it would still be insufficient. We do not commonly believe that
the economic value of our attention is unjustly taken from us when we choose to
watch a television show or read a newspaper with advertisements and we are
unaware of any statute or caselaw that holds it is. We see no reason why Web
site advertising should be treated any differently. A person who chooses to
visit a Web page and is confronted by a targeted advertisement is no more
deprived of his attention's economic value than are his off-line peers.
Similarly, although demographic information is valued
highly (as DoubleClick undoubtedly believed when it paid over one billion
dollars for Abacus), the value of its collection has never been considered a economic loss to the subject. Demographic information is
constantly collected on all consumers by marketers, mail-order catalogues and
retailers.
Nevertheless, to the extent that some value could be placed on these losses, we
find that the plaintiffs have failed to allege facts that could support the
inference that the damages and losses plaintiffs incurred from DoubleClick's
access to any particular computer, over one year's time, could meet §
1030(e)(8)(A)'s damage threshold. Accordingly, Count III of the Amended
Complaint is dismissed.
Conclusion Concerning Federal Claims
Plaintiffs' Amended Complaint fails to plead violations of any of the three
federal statutes under which they bring suit. The absence of evidence in the
legislative or judicial history of any of these Acts to suggest that Congress
intended to prohibit conduct like DoubleClick's supports this conclusion. To
the contrary, the histories of these statutes reveal specific Congressional
goals -- punishing destructive hacking, preventing wiretapping for criminal or
tortious purposes, securing the operations of electronic communication service
providers -- that are carefully embodied in these criminal statutes and their
corresponding civil rights of action.
Furthermore, DoubleClick's practices and consumers' privacy concerns with them
are not unknown to Congress. Indeed, Congress is currently considering
legislation that specifically recognizes and regulates the online harvesting of
user information. For example, the "Consumer Internet Privacy Enhancement
Act," H.R. 237, 107th Cong. (2001), now pending before a House Committee,
imposes substantial notice and opt-out requirements on Web site operators who,
unlike DoubleClick, compile personally identifiable information from users. … Although
proposed legislation has no formal authoritative weight, it is evidence that
Congress is aware of the conduct plaintiffs challenge
and is sensitive to the privacy concerns it raises. Where Congress appears to
have drawn the parameters of its regulation carefully and is actively engaged
in the subject matter, we will not stray from its evident intent.
Counts IV - VII. Remaining State Claims
For the reasons set out above, we have dismissed
plaintiffs' federal claims which were the sole predicate for federal
jurisdiction. When federal claims are dismissed, retention
of state law claims under supplemental jurisdiction is left to the discretion
of the trial court. See 28
U.S.C. § 1367(c)(3)(1994)("district courts
may decline to exercise supplemental jurisdiction over a claim... if... (3) the
district court has dismissed all claims over which it has original
jurisdiction."); Purgess
v. Sharrock, 33 F.3d 134, 138 (2d Cir.1994); In
re Merrill Lynch Ltd. P'ships Litig., 7 F. Supp. 2d 256, 258 (S.D.N.Y. 1997).
We decline to exercise supplemental jurisdiction over plaintiffs' state law
claims. Accordingly, the remaining counts of plaintiffs' Amended Complaint are
dismissed as well.
CONCLUSION
For the foregoing reasons, defendant's motion to dismiss is granted and
plaintiffs' Amended Complaint is dismissed with prejudice.
New York Times, March 22, 1999
By JERI CLAUSING A nonprofit watchdog group that monitors online privacy policies on Monday scolded but declined to pursue an audit of one of its biggest donors, the Microsoft Corp., an awkward decision that comes at crucial time in the debate over whether companies can effectively police themselves in cyberspace.The group, TRUSTe, a Santa Barbara, Calif-based nonprofit organization that regulates the Internet privacy policies of about 500 companies, said that while Microsoft did compromise consumer privacy and trust with an identifying number in its Windows 98 operating system that was surreptitiously collecting consumer data, it found no privacy violations involving information collected through the company's Web site.
"In this case, TRUSTe's certification process covers data that is collected specifically by Microsoft.com, a TRUSTe licensed site," TRUSTe said in declining to seek an independent audit of Microsoft or to revoke its seal of approval.
Privacy advocates said the distinction simply proved that such seals are useless in protecting consumers. "It illustrates the fact that these seals don't deliver the real privacy protection that people want and deserve, and self-regulation is sham regulation," said Jason Catlett, president of Junkbusters Corp., who filed the complaint with TRUSTe.
Catlett called for an immediate investigation of Microsoft by the Federal Trade Commission, saying the TRUSTe decision shows "that self-regulation has failed for a systemic reason that we can expect to see repeated."
Indeed, the decision was seen as a sticky one for TRUSTe. Microsoft is one of its premier corporate partners, contributing $100,000 to the nonprofit group.
And it comes at time when the United States is involved in intense negotiations to try and prove to the European Union that self-regulation and self-enforcement of data privacy practices are effective enough to meet a stringent new European Union privacy law, which threatens to disrupt electronic commerce between the United States and Europe.
A key provision of that law prohibits any company doing business in the European Union from transmitting personal data to any country that does not guarantee comparable privacy protection.
Last week, while a representative of the European Union was in Washington for negotiations, the Better Business Bureau launched a similar seal program that aims to regulate the posted privacy practices of Web sites.
Catlett's complaint, which was sent to TRUSTe on March 12, stemmed from recent reports that the latest version of Microsoft's Windows generates a unique serial number that can gather private information from users even when they request to remain anonymous.
"In TRUSTe's opinion, the investigation confirmed that the technology 'bug' already acknowledged by Microsoft did transfer Hardware IDs to the Microsoft secure server regardless of whether users chose to send this information or not," TRUSTe said in a written statement posted on its Web site Monday afternoon. "While this event does not fall within the boundaries of the TRUSTe License Agreement, it did, in TRUSTe's opinion, compromise consumer trust and privacy."
"Once the company was made aware of what had occurred, it took the necessary action to remedy the problem."
Microsoft applauded TRUSTe for its investigation.
|
| |
| Privacy advocates argue that that revelations of the bug in the Windows should have cast enough doubt about Microsoft's privacy practices | |
|
|
Catlett agreed that TRUSTe "diligently did what they were constitutionally able to do. But by design, that is very little. They did rebuke Microsoft. But they didn't call in an auditor. They haven't caused any consequences for Microsoft other than this rebuke. It really demonstrates that self-regulation is a toothless tiger."
He and other privacy advocates argue that that revelations of the bug in the Windows should have cast enough doubt about Microsoft's privacy practices to trigger an independent audit to insure it is following the principles that the company lays out in a 1,250-word statement on its Web site. That statement, bearing the TRUSTe seal, vows, among other things, to be "committed to protecting your privacy and developing technology that gives you the most powerful, safe, online experience that you can get anywhere."
"If TRUSTe stands for anything, they should be forwarding this complaint to the Federal Trade Commission," said Dave Banisar of the Electronic Privacy Information Center. "The question is, do they have the independence and the political will to do that given the relative power of Microsoft. ... This isn't a small company that can be offered up as a sacrificial lamb for their credibility."
Susan Scott, executive director of TRUSTe, however, said that if anything, the Microsoft case was investigated with more diligence than other complaints to avoid any perceptions of conflict.
"Their can be good arguments for the need for someone to monitor offline practices. But TRUSTe's responsibility is online. We don't pretend to go beyond our charter," Scott said.
Upon receiving TRUSTe's decision on Monday, Catlett immediately wrote to Federal Trade Commission's chairman, Robert Pitofsky, asking the agency "to use its investigative powers to assess whether Microsoft Corporation has acted unfairly or deceptively."
Catlett, who along with EPIC and Privacy International launched a boycott of Intel earlier this year for including a unique identifying number in the new Pentium III computer processors, said his campaign is about "whether Americans have any effective privacy protections at all against a company like Microsoft."
COMPLAINT
The Federal Trade Commission, having reason to believe that GeoCities, a
corporation ("respondent"), has violated the provisions of the
Federal Trade Commission Act, and it appearing to the Commission that this
proceeding is in the public interest, alleges:
1. Respondent GeoCities is a
2. Respondent has operated a World Wide Web ("Web") site located at http://www.geocities.com. This Web site is a virtual community consisting of consumers' personal home pages that are organized into 40 themed neighborhoods. Respondent "hosts" a personal home page by posting it to an address in the consumer's chosen neighborhood.
3. Respondent has provided numerous services including free and fee-based personal home pages, free e-mail service, contests and children's clubs. Respondent provides personal home pages and e-mail addresses to adults and children who reveal personal identifying and demographic information when they register with the Web site.
4. Respondent has more than 1.8 million
members whom it refers to as "homesteaders." As of
5. Respondent has created opportunities for third party advertisers to promote products in a targeted manner to its more than 1.8 million members through respondent's collection of personal identifying, demographic, and "special interest" information obtained in the registration process and through the placement of members' personal home pages in themed neighborhoods.
6. Respondent has derived its revenues from: selling third party advertising space on the Web site (including rotated ad banners, pop-up ads, and sponsorships of major areas on the Web site); selling personal identifying, demographic, and/or interest information collected from consumers who register; GeoPlus, an enhanced fee-based service that provides members extra server space for their personal home pages, among other benefits; merchandising in the Web site's GeoStore; and respondent's publishing unit (GeoPress Publishing).
7. Respondent has required consumers, including children, to complete a "New Member Application" form to become a GeoCities member. The form requests certain mandatory information and certain other information that respondent describes as "optional." The form also asks consumers to designate whether they would like to receive "special offers" from a list of topics or from specific companies. The default setting on the form for special offers is for members to receive them unless members choose otherwise.
8. Respondent has promoted on its Web site
a children's neighborhood called the "
9. Respondent has promoted on its Web site
a children's club in the
10. Respondent has distributed a newsletter called the "World Report." The World Report is e-mailed at regular intervals to respondent's members and occasionally is posted on respondent's Web site. Members automatically receive the World Report but can discontinue receiving it by using respondent's "Profile Editor," a form used to revise members' registration information. The Profile Editor's default setting is for members to receive the World Report unless they request not to.
11. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.
DECEPTIVE
PRACTICES IN CONNECTION WITH RESPONDENT'S COLLECTION
AND USE OF PERSONAL IDENTIFYING INFORMATION
Misrepresentations involving information collection by GeoCities
12. Respondent has placed privacy
statements on its New Member Application form [Exhibit A]. This form
collects from consumers, including children, certain mandatory information
(first and last name, zip code, e-mail address, gender, date of birth, and
member name) and certain other information respondent designates as
"optional" (education level, income, marital status, occupation, and
interests). The form also asks consumers to designate whether they wish to
receive "special offers" from advertisers, to select from a list of
special offer topics, and to designate whether they wish to receive specific
products or services from individual companies. Respondent has also placed
privacy statements on its "GeoCities Free Member E-mail Program" Web
page [Exhibit B] and in the
A. "The following section is completely optional. We will not share this information with anyone without your permission, but will use it to gain a better understanding of who is visiting GeoCities. This information will help us to build a better GeoCities for everyone. . . . [The information requested is] Highest Level of Education Completed . . . Household Income . . . Marital Status . . . Occupation . . . Interests" [Exhibit A]
B. "When [consumers] apply to GeoCities we ask if they would like to receive information on a variety of topics. . . . Before we send anything out, we deliver an orientation e-mail to explain the program, to ensure that only those people who requested topically-oriented mail receive it and to protect your privacy. . . . We assure you this is a free service provided only to GeoCitizens who request this information, and we will NEVER give your information to anyone without your permission." [Exhibit B]
C. "[Certain e-mail to members] came from our friends at CMG Direct Corporation. It was only sent to homesteaders who clicked a box in the topic list on the GeoCities application. The letter was meant as a heads-up to those people that information about the interests they selected would be coming from reputable companies. . . . We are sorry about any confusion concerning these e-mails. We assure you that we will NEVER give your personal information to anyone without your permission." [Exhibit C]
13. Through the means described in Paragraph 12, respondent has represented, expressly or by implication, that the personal identifying information collected through its New Member Application form is used only for the purpose of providing to members the specific e-mail advertising offers and other products or services they request.
14. In truth and in fact, the personal identifying information collected through respondent's New Member Application form is not used only for the purpose of providing to members the specific e-mail advertising offers and other products or services they request. Respondent has also sold, rented, or otherwise marketed or disclosed this information, including information collected from children, to third parties who have used this information for purposes other than those for which members have given permission. For example, third parties have targeted unrequested e-mail advertising offers to individual members based on their chosen GeoCities neighborhoods. Therefore, the representation set forth in Paragraph 13 was, and is, false or misleading.
15. Through the means described in Paragraph 12, respondent has represented, expressly or by implication, that the "optional" information collected through its New Member Application form is not disclosed to third parties without the consumer's permission, and is used only to gain a better understanding of who is visiting GeoCities.
16. In truth and in fact, respondent has disclosed the "optional" information it collects through the New Member Application form to third parties without the consumer's permission, and for purposes other than to gain a better understanding of who is visiting GeoCities. Respondent has disclosed this information, including information collected from children, to third parties who have used this information to target advertising to GeoCities' members. Therefore, the representation set forth in Paragraph 15 was, and is, false or misleading.
Misrepresentations
involving sponsorship by GeoCities
where information is collected by third parties
17. Respondent has disseminated or caused
to be disseminated Enchanted Forest Web pages [Exhibits D, H]. These
Web pages have promoted children's activities in the
A. "Welcome kids to this enchanting forest created by your friends for you to enjoy. . . . Join the GeoKidz Club at Enchanted Forest/3696 for fun and HTML help. Play Java games and be sure to visit Charlie, the GeoKidz Club's new dog." [Exhibit E]
B. "JOIN THE GEOKIDZ CLUB!
We all want a safe spot for our children to
play and The GeoKidz Club is the perfect place. Enchanted Forest Community
Leader Melange has been busy providing an
C. "Join us in our quest to name our
Prince and Princess, the mascots of
18. Through the means described in Paragraph 17, respondent has represented, expressly or by implication, that respondent collects and maintains the children's personal identifying information collected through the Official GeoCities GeoKidz Club Membership Request Form and Enchanted Forest Contest Entry Form.
19. In truth and in fact, respondent does
not collect and maintain the children's personal identifying information
collected through the Official GeoCities GeoKidz Club Membership Request Form
and Enchanted Forest Contest Entry Form. In fact, the Official GeoCities
GeoKidz Club and the
20. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
THEREFORE, the Federal Trade Commission this fifth day of February, 1999, has issued this complaint against respondents.
DECISION AND ORDER
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and
The respondent, its attorneys, and counsel for Federal Trade Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and
The Commission having considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter by interested persons pursuant to § 2.34 of its Rules, now in further conformity with the procedure prescribed in § 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:
1. Respondent GeoCities,
is a corporation organized, existing, and doing business under and by virtue of
the laws of the State of
2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the proceeding is in the public interest.
ORDER
DEFINITIONS
For purposes of this order, the following definitions shall apply:
1. "Child" or "children" shall mean a person of age twelve (12) or under.
2. "Parents" or "parental" shall mean a legal guardian, including, but not limited to, a biological or adoptive parent.
3. "Personal identifying information" shall include, but is not limited to, first and last name, home or other physical address (e.g., school), e-mail address, telephone number, or any information that identifies a specific individual, or any information which when tied to the above becomes identifiable to a specific individual.
4. "Disclosure" or "disclosed to third party(ies)" shall mean (a) the release of information in personally identifiable form to any other individual, firm, or organization for any purpose or (b) making publicly available such information by any means including, but not limited to, public posting on or through home pages, pen pal services, e-mail services, message boards, or chat rooms.
5. "Clear(ly) and prominent(ly)" shall mean in a type size and location that are not obscured by any distracting elements and are sufficiently noticeable for an ordinary consumer to read and comprehend, and in a typeface that contrasts with the background against which it appears.
6. "Archived" database shall mean respondent's off-site "back-up" computer tapes containing member profile information and GeoCities Web site information.
7. "Electronically verifiable signature" shall mean a digital signature or other electronic means that ensures a valid consent by requiring: (1) authentication (guarantee that the message has come from the person who claims to have sent it); (2) integrity (proof that the message contents have not been altered, deliberately or accidentally, during transmission); and (3) non-repudiation (certainty that the sender of the message cannot later deny sending it).
8. "Express parental consent" shall mean a parent's affirmative agreement that is obtained by any of the following means: (1) a signed statement transmitted by postal mail or facsimile; (2) authorizing a charge to a credit card via a secure server; (3) e-mail accompanied by an electronically verifiable signature; (4) a procedure that is specifically authorized by statute, regulation, or guideline issued by the Commission; or (5) such other procedure that ensures verified parental consent and ensures the identity of the parent, such as the use of a reliable certifying authority.
9. Unless otherwise specified, "respondent" shall mean GeoCities, its successors and assigns and its officers, agents, representatives, and employees.
10. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.
I.
IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with any online collection of personal identifying information from consumers, in or affecting commerce, shall not make any misrepresentation, in any manner, expressly or by implication, about its collection or use of such information from or about consumers, including, but not limited to, what information will be disclosed to third parties and how the information will be used.
II.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with any online collection of personal identifying information from consumers, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the identity of the party collecting any such information or the sponsorship of any activity on its Web site.
III.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the online collection of personal identifying information from children, in or affecting commerce, shall not collect personal identifying information from any child if respondent has actual knowledge that such child does not have his or her parent's permission to provide the information to respondent. Respondent shall not be deemed to have actual knowledge if the child has falsely represented that (s)he is not a child and respondent does not knowingly possess information that such representation is false.
IV.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the online collection of personal identifying information, in or affecting commerce, shall provide clear and prominent notice to consumers, including the parents of children, with respect to respondent's practices with regard to its collection and use of personal identifying information. Such notice shall include, but is not limited to, disclosure of:
A. what information is being collected (e.g., "name," "home address," "e-mail address," "age," "interests");
B. its intended use(s);
C. the third parties to whom it will be disclosed (e.g., "advertisers of consumer products," mailing list companies," "the general public");
D. the consumer's ability to obtain access to or directly access such information and the means by which (s)he may do so;
E. the consumer's ability to remove directly or have the information removed from respondent's databases and the means by which (s)he may do so; and
F. the procedures to delete personal identifying information from respondent's databases and any limitations related to such deletion.
Such notice shall appear on the home page of respondent's Web site(s) and at each location on the site(s) at which such information is collected.
Provided that, respondent shall not be required to include the notice at the locations at which information is collected if such information is limited to tracking information and the collection of such information is described in the notice required by this Part.
Provided further that, for purposes of this Part, compliance with all of the following shall be deemed adequate notice: (a) placement of a clear and prominent hyperlink or button labeled PRIVACY NOTICE on the home page(s), which directly links to the privacy notice screen(s); (b) placement of the information required in this Part clearly and prominently on the privacy notice screen(s), followed on the same screen(s) with a button that must be clicked on to make it disappear; and (c) at each location on the site at which any personal identifying information is collected, placement of a clear and prominent hyperlink on the initial screen on which the collection takes place, which links directly to the privacy notice and which is accompanied by the following statement in bold typeface:
NOTICE: We collect personal information on this site. To learn more about how we use your information click here.
V.
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the online collection of personal identifying information from children, in or affecting commerce, shall maintain a procedure by which it obtains express parental consent prior to collecting and using such information.
Provided that, respondent may implement the following screening procedure that shall be deemed to be in compliance with this Part. Respondent shall collect and retain certain personal identifying information from a child, including birth date and the child's and parent's e-mail addresses (hereafter "screening information"), enabling respondent to identify the site visitor as a child and to block the child's attempt to register with respondent without express parental consent. If respondent elects to have the child register with it, respondent shall: (1) give notice to the child to have his/her parent provide express parental consent to register; and/or (2) send a notice to the parent's e-mail address for the purpose of obtaining express parental consent. The notice to the child or parent shall provide instructions for the parent to: (1) go to a specific URL on the Web site to receive information on respondent's practices regarding its collection and use of personal identifying information from children and (2) provide express parental consent for the collection and use of such information. Respondent's collection of screening information shall be by a manner that discourages children from providing personal identifying information in addition to the screening information. All personal identifying information collected from a child shall be held by respondent in a secure manner and shall not be used in any manner other than to effectuate the notice to the child or parent, or to block the child from further attempts to register or otherwise provide personal identifying information to respondent without express parental consent. The personal identifying information collected shall not be disclosed to any third party prior to the receipt of express parental consent. If express parental consent is not received by twenty (20) days after respondent's collection of the information from the child, respondent shall remove all such personal identifying information from its databases, except such screening information necessary to block the child from further attempts to register or otherwise provide personal identifying information to respondent without express parental consent.
VI.
Nothing in this order shall prohibit respondent from collecting personal identifying information from children or from using such information, as specifically permitted in the Children's Online Privacy Protection Act of 1998 (without regard to the effective date of the Act) or as such Act may hereafter be amended; regulations or guides promulgated by the Commission; or self-regulatory guidelines approved by the Commission pursuant to the Act.
VII.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns, shall provide a reasonable means for consumers, including the parents of children, to obtain removal of their or their children's personal identifying information collected and retained by respondent and/or disclosed to third parties, prior to the date of service of this order, as follows:
A. Respondent shall provide a clear and prominent notice to each consumer over the age of twelve (12) from whom it collected personal identifying information and disclosed that information to CMG Information Services, Inc., describing such consumer's options as stated in Part VII.C and the manner in which (s)he may exercise them.
B. Respondent shall provide a clear and prominent notice to the parent of each child from whom it collected personal identifying information prior to May 20, 1998, describing the parent's options as stated in Part VII.C and the manner in which (s)he may exercise them.
C. Respondent shall provide the notice within thirty (30) days after the date of service of this order by e-mail, postal mail, or facsimile. Notice to the parent of a child may be to the e-mail address of the parent and, if not known by respondent, to the e-mail address of the child. The notice shall include the following information:
1. the information that was collected (e.g., "name," "home address," "e-mail address," "age," "interests"); its use(s) and/or intended use(s); and the third parties to whom it was or will be disclosed (e.g., "advertisers of consumer products," "mailing list companies," "the general public") and with respect to children, that the child's personal identifying information may have been made public through various means, such as by publicly posting on the child's personal home page or disclosure by the child through the use of an e-mail account;
2. the consumer's and childs parents right to obtain access to such information and the means by which (s)he may do so;
3. the consumer's and childs parent's right to have the information removed from respondent's or a third party's databases and the means by which (s)he may do so;
4. a statement that childrens information will not be disclosed to third parties, including public posting, without express parental consent to the disclosure or public posting;
5. the means by which express parental consent may be communicated to the respondent permitting disclosure to third parties of a child's information; and
6. a statement that the failure of a consumer over the age of twelve (12) to request removal of the information from respondent's databases will be deemed as approval to its continued retention and/or disclosure to third parties by respondent.
D. Respondent shall provide to consumers, including the parents of children, a reasonable and secure means to request access to or directly access their or their childrens personal identifying information. Such means may include direct access through password protected personal profile, return e-mail bearing an electronically verifiable signature, postal mail, or facsimile.
E. Respondent shall provide to consumers, including the parents of children, a reasonable means to request removal of their or their childrens personal identifying information from respondent's and/or the applicable third party's databases or an assurance that such information has been removed. Such means may include e-mail, postal mail, or facsimile.
F. The failure of a consumer over the age of twelve (12) to request the actions specified above within twenty (20) days after his/her receipt of the notice required in Part VII.A shall be deemed to be consent to the information's continued retention and use by respondent and any third party.
G. Respondent shall provide to the parent of a child a reasonable means to communicate express parental consent to the retention and/or disclosure to third parties of his/her child's personal identifying information. Respondent shall not use any such information or disclose it to any third party unless and until it receives express parental consent.
H. If, in response to the notice required in Part VII.A, respondent has received a request by a consumer over the age of twelve (12) that respondent should remove from its databases the consumer's personal identifying information or has not received the express consent of a parent of a child to the continued retention and/or disclosure to third parties of a child's personal identifying information by respondent within twenty (20) days after the parent's receipt of the notice required in Part VII.B, respondent shall within ten (10) days:
1. Discontinue its retention and/or disclosure to third parties of such information, including but not limited to (a) removing from its databases all such information, (b) removing all personal home pages created by the child, and (c) terminating all e-mail accounts for the child; and
2. Contact all third parties to whom respondent has disclosed the information, requesting that they discontinue using or disclosing that information to other third parties, and remove the information from their databases.
With respect to any consumer over the age of twelve (12) or any parent of a child who has consented to respondent's continued retention and use of personal identifying information pursuant to this Part, such consumer's or parent's continuing right to obtain access to his/her or a child's personal identifying information or removal of such information from respondent's databases shall be as specified in the notice required by Part IV of this order.
I. Within thirty (30) days after the date of service of this order, respondent shall obtain from a responsible official of each third party to whom it has disclosed personal identifying information and from each GeoCities Community Leader a statement stating that (s)he has been advised of the terms of this order and of respondent's obligations under this Part, and that (s)he agrees, upon notification from respondent, to discontinue using or disclosing a consumer's or child's personal identifying information to other third parties and to remove any such information from its databases.
J. As may be permitted by law, respondent shall cease to do business with any third party that fails within thirty (30) days of the date of service of this order to provide the statement set forth in Part VII.I or whom respondent knows or has reason to know has failed at any time to (a) discontinue using or disclosing a child's personal identifying information to other third parties, or (b) remove any such information from their databases. With respect to any GeoCities Community Leader, the respondent shall cease the Community Leader status of any person who fails to provide the statement set forth in Part VII.I or whom respondent knows or has reason to know has failed at any time to (a) discontinue using or disclosing a child's personal identifying information to other third parties, or (b) remove any such information from their databases.
For purposes of this Part: "third party(ies)" shall mean each GeoCities Community Leader, CMG Information Services, Inc., Surplus Software, Inc. (Surplus Direct/Egghead Computer), Sage Enterprises, Inc. (GeoPlanet/Planetall), Netopia, Inc. (Netopia), and InfoBeat/Mercury Mail (InfoBeat).
VIII.
IT IS FURTHER ORDERED that for the purposes of this order, respondent shall not be required to remove personal identifying information from its archived database if such information is retained solely for the purposes of Web site system maintenance, computer file back-up, to block a child's attempt to register with or otherwise provide personal identifying information to respondent without express parental consent, or to respond to requests for such information from law enforcement agencies or pursuant to judicial process. Except as necessary to respond to requests from law enforcement agencies or pursuant to judicial process, respondent shall not disclose to any third party any information retained in its archived database. In any notice required by this order, respondent shall include information, clearly and prominently, about its policies for retaining information in its archived database.
IX.
IT IS FURTHER ORDERED that for five (5) years after the date of this order, respondent GeoCities, and its successors and assigns, shall place a clear and prominent hyperlink within its privacy statement which states as follows in bold typeface:
NOTICE: Click here for important information about safe surfing from the Federal Trade Commission.
The hyperlink shall directly link to a hyperlink/URL to be provided to respondent by the Commission. The Commission may change the hyperlink/URL upon thirty (30) days prior written notice to respondent.
X.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying the following:
A. For five (5) years after the last date of dissemination of a notice required by this order, a print or electronic copy in HTML format of all documents relating to compliance with Parts IV through IX of this order, including, but not limited to, a sample copy of every information collection form, Web page, screen, or document containing any representation regarding respondent's information collection and use practices, the notice required by Parts IV, V, and VII, any communication to third parties required by Part VII, and every Web page or screen linking to the Federal Trade Commission Web site. Each Web page copy shall be accompanied by the URL of the Web page where the material was posted online. Electronic copies shall include all text and graphics files, audio scripts, and other computer files used in presenting information on the World Wide Web; and
Provided that, after creation of any Web page or screen in compliance with this order, respondent shall not be required to retain a print or electronic copy of any amended Web page or screen to the extent that the amendment does not affect respondent's compliance obligations under this order.
B. For five (5) years after the last collection of personal identifying information from a child, all materials evidencing the express parental consent given to respondent.
XI.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns, shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.
XII.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns, shall establish an "information practices training program" for any employee or GeoCities Community Leader engaged in the collection or disclosure to third parties of consumers' personal identifying information. The program shall include training about respondent's privacy policies, information security procedures, and disciplinary procedures for violations of its privacy policies. Respondent shall provide each such current employee and GeoCities Community Leader with information practices training materials within thirty (30) days after the date of service of this order, and each such future employee or GeoCities Community Leader such materials and training within thirty (30) days after (s)he assumes his/her position or responsibilities.
XIII.
IT IS FURTHER ORDERED that respondent
GeoCities, and its successors and assigns, shall notify the Commission at least
thirty (30) days prior to any change in the corporation that may affect
compliance obligations arising under this order, including, but not limited to,
a dissolution, assignment, sale, merger, or other action that would result in
the emergence of a successor corporation; the creation or dissolution of a
subsidiary, parent, or affiliate that engages in any acts or practices subject
to this order; the proposed filing of a bankruptcy petition; or a change in the
corporate name or address. Provided, however, that, with respect to any
proposed change in the corporation about which respondent learns less than
thirty (30) days prior to the date such action is to take place, respondent
shall notify the Commission as soon as is practicable after obtaining such
knowledge. All notices required by this Part shall be sent by certified mail to
the Associate Director, Division of Enforcement, Bureau of Consumer Protection,
Federal Trade Commission,
XIV.
IT IS FURTHER ORDERED that respondent GeoCities, and its successors and assigns, shall, within sixty (60) days after service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.
XV.
This order will terminate on February 5, 2019, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:
A. Any Part in this order that terminates in less than twenty (20) years;
B. This order's application to any respondent that is not named as a defendant in such complaint; and
C. This order if such complaint is filed after the order has terminated pursuant to this Part.
Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.
CONCURRING STATEMENT OF COMMISSIONER ORSON SWINDLE
I have voted in favor of
final issuance of the consent order in this matter because its provisions are
appropriate to remedy the alleged violations of the law by GeoCities, Inc.
However, I want to emphasize that my support for these provisions as a remedy
for alleged law violations in this particular case does not necessarily mean
that I would support imposing these requirements on other commercial Internet
sites through either legislation or regulation.