Title: An act relating to spyware.

Brief Description: Modifying provisions regulating spyware.

Sponsors: Representatives Morris, Ericksen, Hasegawa, Morrell and Kelley; by request of Attorney General.

Brief History:

Technology, Energy & Communications: 1/22/08, 2/5/08 [DPS].

HOUSE COMMITTEE ON TECHNOLOGY, ENERGY & COMMUNICATIONS

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 12 members: Representatives McCoy, Chair; Eddy, Vice Chair; Crouse, Ranking Minority Member; McCune, Assistant Ranking Minority Member; Hankins, Herrera, Hudgins, Hurst, Kelley, Morris, Takko and Van De Wege.

Staff: Kara Durbin (786-7133).

Background:

Spyware: The term "spyware" generally describes any software that is placed on a user's computer to monitor, collect, and transmit personally identifiable information without the user's knowledge or consent. Spyware programs can be difficult to identify and remove, and can cause problems ranging from advertisements to computer viruses to identity theft. Frequently, spyware is hidden within a larger software package that the consumer purposely installs, but spyware can also be installed by visiting a web site.

Computer Spyware Law: In 2005 the Legislature enacted a state spyware law, Chapter 19.270 of the RCW. The law generally prohibits the unauthorized installation of computer spyware if installed through intentionally deceptive means. Several types of computer spyware activities are prohibited, including collecting web browsing histories, taking control of a user's computer to send electronic mail or viruses, creating bogus financial charges, opening multiple pop-up advertisements, and modifying security settings.

The Attorney General, a provider of computer software, or an owner of a web site or
trademark may bring a civil action to enjoin further violations and recover either actual
damages, or $100,000 per violation, whichever is greater. The maximum allowable damage
award is $2 million. In addition, a court may increase the damage award up to three times if
the defendant has engaged in a pattern and practice of engaging in the prohibited activities.
The court may also award costs and reasonable attorneys' fees to the prevailing party.

Summary of Substitute Bill:

Additions to the Computer Spyware Law: Several computer-related actions, collectively known as "spyware," are added to the computer spyware law. The following spyware activities are prohibited:

• disabling the ability of anti-spyware or anti-virus software to update automatically, if the disabling is done through intentionally deceptive means;
• using the owner or operator's computer as part of an activity performed by a group of computers for the purpose of causing damage to another computer or person, including, but not limited to, launching a denial of service attack;
• transmitting or relaying commercial e-mail or a computer virus from the owner or operator's computer if initiated by a person other than the owner or operator;
• modifying toolbars or buttons of the owner or operator's Internet browser used to access and navigate the Internet, if the disabling is done through deceptive means; and
• inducing an owner to install software by displaying a pop-up, web page, or other message whose source is misrepresented.

These prohibitions also apply to those persons who know or consciously avoid knowing that their services are being used to procure or transmit spyware.
            
Exceptions: These prohibitions do not apply to any monitoring of a subscriber's Internet service by a telecommunications carrier, cable operator, computer hardware or software provider, or provider of information service for network or computer security purposes.

Changes to the Computer Spyware Law: The following computer spyware provisions are modified to prohibit "deceptive" actions rather than "intentionally deceptive" actions:

• modifying settings for opening web pages, search engines, bookmarks, and toolbars;
• misrepresenting that software will be uninstalled or disabled by an owner or operator's actions; and
• misrepresenting that software is necessary for security, maintenance, repair, or privacy reasons.

"Deceptive" is defined as: (1) a materially false or fraudulent statement; or (2) a statement or description that omits or misrepresents material information in order to deceive an owner or operator.

Some provisions of the existing computer spyware law relating to: (1) keystroke logging; and (2) preventing an owner from disabling or blocking the installation of software, are removed.

These exemptions must not be construed as: (1) a defense to liability under the common law or any other state or federal law; or (2) an affirmative grant of authority to engage in certain computer monitoring or remote disablement activities.

Standing to Sue: A provider of computer software or owner of a web site or trademark only may bring a civil action if the action arises directly out of the person's status as a provider or owner.

The computer spyware statute is reorganized.

Substitute Bill Compared to Original Bill:

The substitute bill specifies that the exemptions in section 4 of the bill shall not be construed as: (1) a defense to liability under state, federal, or common law; or (2) an affirmative grant of authority to engage in certain computer monitoring or remote disablement activities outlined in section 4 of the bill.

Appropriation: None.

Fiscal Note: Available.

Effective Date of Substitute Bill: The bill takes effect 90 days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony:

(In support) This is agency request legislation to update our state's spyware law. The state spyware law has been a good tool and model for other states. This will only improve upon the good work that has already been done. The Attorney General's office has brought several successful spyware cases since 2006. There are some loopholes and weaknesses were exposed during litigation that we want to address in this bill. The high level of intent required under state law makes enforcement difficult. These changes will make the spyware law an even more effective enforcement tool. Spyware poses a very significant threat to the integrity of data.

(In support with amendment) The proposed amendment would clarify that liability is limited only under the spyware law itself.

(Opposed) None.

Persons Testifying: (In support) Representative Morris, prime sponsor; and Paula Selis, Office of the Attorney General.

(In support with amendment) Art Butler, WebTec; and Kenton Brine, Property Casualty Insurers Association.

Persons Signed In To Testify But Not Testifying: None.