Legislature(2005 - 2006)CAPITOL 120
04/27/2005 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| Board of Governors of the Alaska Bar | |
| SB140 | |
| HB269 | |
| HB268 | |
| HB276 | |
| SB36 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 269 | TELECONFERENCED | |
| += | SB 36 | TELECONFERENCED | |
| + | SB 140 | TELECONFERENCED | |
| + | SJR 12 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 268 | TELECONFERENCED | |
| += | HB 276 | TELECONFERENCED | |
SB 140 - BAN INTERNET SPYWARE 1:33:17 PM REPRESENTATIVE ANDERSON announced that the next order of business would be CS FOR SENATE BILL NO. 140(JUD), "An Act relating to spyware and unsolicited Internet advertising." DAVID STANCLIFF, Staff to Senator Gene Therriault, Alaska State Legislature, sponsor, said on behalf of Senator Therriault that SB 140 proposes to allow individuals and businesses recourse to take action against those who are "putting things on and in their computers" without permission and those items cause damage. He relayed that the next speaker - Ben Edelman - is considered an expert in the field [of computers] and has testified as such before the courts. 1:34:40 PM BENJAMIN G. EDELMAN explained that spyware has become quite a serious problem. He elaborated: There's a lot of software on a typical [personal computer (PC)], maybe even on some of your PCs, that isn't there because you want it or because you asked for it, but rather it's there because some spyware company found a way to sneak it on and to make money from keeping it there. Some of these programs really do bona fide spying - they track your name, your e- mail address, your credit card number, your purchases, and so forth. Others have a commercial purpose that might at first glance seem less nefarious but that has actually proven to be quite a bit more profitable. They track what you do, and then ... show you extra pop-up ads, often for competitors of the sites you ask for. It's this kind of spyware that today's bill seeks to focus on. Why focus here? Well, the outright spying - stealing credit card numbers and so forth - is largely illegal under existing law. If you're trafficking in someone's credit card numbers, you better believe that eventually the law is going to catch up with you and you're not going to like it. Surely there's a need for ... more enforcement effort, but I don't get the sense that new legislation is really what's needed, here. On the other hand, as to the advertising software, well, these programs are in an odd, intermediate position. Some courts have said that what they do is illegal, but others have actually found it to be okay, [that] it's a kind of competition [that] somehow the web naturally creates. So there's a natural role for the legislature in stepping up and giving an answer, preventing the slow and costly litigation that has been present to date, and beginning to give consumers some relief from this unwanted software that at present has such overpowering economic incentives to sneak onto users' PCs. Just to be very concrete about what it is that we're talking about, ... there's software that for example might notice you're going to an Internet car rental site ... [and will then] show you a pop-up ad for a different car rental site. ... Well, maybe that's the kind of competition that might be thought to be fair or legitimate in the abstract, but the fact is, you can make so much money by getting new [car rental] customers that way that it seems like 100 different companies want to be in this business of showing that kind of pop-up ad. MR. EDELMAN continued: It's the race to get on to your computer, to trick you into clicking "yes" here or "yes" there or "okay" somewhere else, that causes users' computers to get truly overwhelmed and clogged up with all the different programs and their respective pop-up ads. Now, this bill comes in a very particular context, with some legislation perhaps in the pipeline in [Washington D.C.] and that in principle could preempt your state legislation, so you shouldn't be under any false illusions as to how long this will last. [The] fact is, Congress might act and it would block your legislation altogether; on the other hand, they might remain paralyzed as they have been for ... the past two years that they've been talking about this in various modes. Similarly there have been some bills passed in other states, though I think there's a lot we can learn from those bills and, as I see it at least, their shortcomings. For example, a bill passed in California last year has a regular laundry list of different tactics that California says are impermissible: you shouldn't take over someone's computer and use it to send junk e-mail, you shouldn't use someone's computer to install software and tell them that it's been removed when it hasn't - no lying. Well, so California gives a dozen-odd different things that you shouldn't do, but oddly they omit the methods used by the most prevalent programs; they omit the sneaky installations, for example, and, most importantly, they omit these pop-up adds that are the core of the profit motive of these programs. There may, nonetheless, be some objections to this bill. Last year, when there was surprisingly similar legislation in Utah, I was really just shocked by how many technology companies actively spread disinformation about what the bill would do. They said it would ban anti-virus software and porn filters. ... Of course, there was no legitimate basis for any of their allegations. My sense ended up being that software companies don't like the idea of governments, especially state governments, telling them how they can do business. Maybe we can see where they're coming from - after all, for the past 20 years, no one's really regulated software companies, they've gotten to do whatever they want - but we certainly have [a] great history of consumer protection legislation in this country and that's entirely appropriate ... [for] the Internet too. The Internet isn't free of laws just because it's implemented in software. Another possible objection to the bill is that it somehow grants excessive or undue protections to trademark holders and that that creates some kind of constitutional problem, trademark being largely a federal concern. But as I read the bill, I don't think that's actually right; what the bill does is regulate unfair competition - not trademark. And it's fully within a state's rights to say that it is unfair competition to show ads in particular ways. That's just the kind of thing all kinds of unfair competition laws have been doing for decades. MR. EDELMAN concluded: Finally, some folks will say that enforcement of the bill is impossible, they'll say it's hard to find these "adware" and spyware folks and when you find them you can't do anything to them; I emphatically disagree with that one. The folks making these pop-up ads are big companies; they have offices in New York and California - some of them may be in Alaska, though I don't have any specifically in mind - they're easy to find and there won't be any difficulty with enforcement or even with collection in due course. So I'll leave it at that, and I really am pleased to answer any question that the committee may have. 1:40:51 PM REPRESENTATIVE GARA noted that the interstate commerce clause says that the state can regulate Alaskan companies and those who know they're dealing with Alaskans, but cannot regulate those who don't know they're dealing with Alaskans. He offered his understanding that most companies responsible for infecting computers with pop-up ads don't know what state those computers are in, and asked whether the courts would consider that a sufficient reason for prohibiting the regulation of those companies. MR. EDELMAN pointed out that regulation of spyware is quite different because spyware does know where computers are located, since it provides specific marketing to specific populations and locations via Internet protocol (IP) addresses. Furthermore, [Section 1 of CSSB 140(JUD), specifically proposed AS 45.45.792(b)(1)-(3)] speaks to this issue directly, essentially saying that one can use spyware as long as it asks or otherwise determines where the user is located and then doesn't display the pop-up ad if that location is Alaska. Another point to consider is that the advertising company is actually sending a program that is going to stay on one's computer indefinitely and thus the State of Alaska has a large nexus over that program because it is then physically present in Alaska. In conclusion, he suggested that the committee ought to get advice from Legislative Legal and Research Services regarding possible constitutional issues raised by SB 140 and then follow that advice. REPRESENTATIVE ANDERSON relayed that SB 140 would be set aside until later in the meeting. SB 140 - BAN INTERNET SPYWARE 2:54:19 PM CHAIR McGUIRE announced that the committee would resume the hearing on CS FOR SENATE BILL NO. 140(JUD), "An Act relating to spyware and unsolicited Internet advertising." REPRESENTATIVE KOTT noted that the bill's presentation occurred earlier in the meeting, characterized the SB 140 as a good bill, and said he would support reporting it from committee. REPRESENTATIVE COGHILL indicated that he would be doing further research on the issues raised by SB 140. 2:56:30 PM REPRESENTATIVE GRUENBERG noted that he'd missed the earlier testimony, and asked for an explanation of the bill. DAVID STANCLIFF, Staff to Senator Gene Therriault, Alaska State Legislature, sponsor, said on behalf of Senator Therriault that SB 140 is modeled after legislation in other states, particularly Utah, and is aimed directly at those companies that violate fair trade practices by inserting information into one's computer without one's knowledge. He relayed that a recent search for spyware on legislative computers found 685 spyware programs. The bill allows a person or business to seek civil recourse for damages caused by spyware, and allows the attorney general to pursue violators under existing statutes. He noted that Legislative Legal and Research Services has provided a memo to the effect that SB 140 does not violate the federal commerce clause. REPRESENTATIVE GRUENBERG surmised, then, that SB 140 addresses pop-up ads. MR. STANCLIFF concurred, adding that spyware invades computers and is being used by major companies to influence commerce. 2:59:28 PM REPRESENTATIVE ANDERSON moved to report CSSB 140(JUD) out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSSB 140(JUD) was reported from the House Judiciary Standing Committee.
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