Legislature(2005 - 2006)BUTROVICH 205

04/13/2005 10:00 AM JUDICIARY


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10:04:56 AM Start
10:05:23 AM SB140
10:39:38 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 140 BAN INTERNET SPYWARE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 13, 2005                                                                                         
                           10:04 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
Senator Gretchen Guess                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ralph Seekins, Chair                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 140                                                                                                             
"An Act relating to spyware and unsolicited Internet                                                                            
advertising."                                                                                                                   
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 140                                                                                                                  
SHORT TITLE: BAN INTERNET SPYWARE                                                                                               
SPONSOR(s): SENATOR(s) THERRIAULT                                                                                               
                                                                                                                                
03/10/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/05       (S)       L&C, JUD                                                                                               
03/22/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/22/05       (S)       Heard & Held                                                                                           
03/22/05       (S)       MINUTE(L&C)                                                                                            
03/24/05       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
03/24/05       (S)       Moved SB 140 Out of Committee                                                                          
03/24/05       (S)       MINUTE(L&C)                                                                                            
03/29/05       (S)       L&C RPT 3DP                                                                                            
03/29/05       (S)       DP: BUNDE, DAVIS, STEVENS B                                                                            
04/07/05       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
04/07/05       (S)       Scheduled But Not Heard                                                                                
04/08/05       (H)       JUD AT 8:00 AM CAPITOL 120                                                                             
04/08/05       (S)       Scheduled But Not Heard                                                                                
04/13/05       (H)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Ben Edelman, Student                                                                                                        
Harvard University                                                                                                              
POSITION STATEMENT:  Commented on SB 140                                                                                      
                                                                                                                                
Mr. Curtis Clothier, Data Processing Manager                                                                                    
Legislative Affairs Agency                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION  STATEMENT:    Delivered a  Powerpoint  presentation  on                                                             
Spyware for SB 140                                                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
VICE-CHAIR CHARLIE  HUGGINS called the Senate  Judiciary Standing                                                             
Committee meeting to order at  10:04:56 AM. Present were Senators                                                             
French, Therriault, Guess and Vice-Chair Huggins.                                                                               
                                                                                                                                
                  SB 140-BAN INTERNET SPYWARE                                                                               
                                                                                                                                
VICE  CHAIR  CHARLIE  HUGGINS  announced  SB 140  to  be  up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
10:05:23 AM                                                                                                                   
SENATOR  GENE THERRIAULT  introduced  SB 140  and  asked Mr.  Ben                                                               
Edelman to explain how Spyware works.                                                                                           
                                                                                                                                
MR.  BEN  EDELMAN,  student,  Harvard  University,  informed  the                                                               
Senate Standing Judiciary Committee  Spyware has become a serious                                                               
problem.  Some companies  do bona  fide spying  by tracking  your                                                               
email address and purchases. Users  have a commercial purpose and                                                               
they track what a person does  on the internet for the purpose of                                                               
showing pop  up ads, often  for competitors  of the site  that is                                                               
being viewed.                                                                                                                   
                                                                                                                                
10:08:25 AM                                                                                                                   
SB 140 focuses  on this type of software. Spyware  pop up ads are                                                               
equivalent to a Wal-Mart employee  coming into a Target store and                                                               
trying to  get the customers  to shop at Wal-Mart  instead. Other                                                               
Legislatures have taken  up the issue, California  being the most                                                               
well  known example.  They passed  a  bill, which  names a  dozen                                                               
specific tactics, which they prohibit.                                                                                          
                                                                                                                                
10:10:33 AM                                                                                                                   
There  are  a  couple  of   bills  pending  in  U.  S.  Congress.                                                               
Representative  Bono of  California introduced  a bill  that bans                                                               
bad practices. Utah passed legislation  similar to SB 140 but the                                                               
language should have  been drafted more tightly  because the Utah                                                               
court ruled the bill unconstitutional.                                                                                          
                                                                                                                                
10:12:24 AM                                                                                                                   
Software companies  think they do not  need government oversight.                                                               
Currently they  are not well regulated  and they want to  keep it                                                               
that  way so  their objections  to  legislation of  any type  are                                                               
intense.  Yahoo,  for example,  makes  money  by selling  ads  on                                                               
websites.                                                                                                                       
                                                                                                                                
10:13:42 AM                                                                                                                   
SB  140 regulates  unfair  competition by  making  it illegal  to                                                               
design  confusing pop  up ads.  Enforcement is  entirely possible                                                               
because violators are easy to find.                                                                                             
                                                                                                                                
10:15:13 AM                                                                                                                   
SENATOR THERRIAULT asked Mr. Edelman his credentials.                                                                           
                                                                                                                                
MR.  EDELMAN responded  he  is a  student  at Harvard  University                                                               
working for his  Ph.D. on economics and finishing  law school. In                                                               
his spare  time he tests  Spyware and writes about  his findings.                                                               
He has  served as  an expert in  some litigation  against Spyware                                                               
companies.                                                                                                                      
                                                                                                                                
SENATOR THERRIAULT  asked Mr. Edelman  to comment on  the wording                                                               
on Page 2, lines 11-12.                                                                                                         
                                                                                                                                
MR.  EDELMAN suspected  the  drafter  was trying  to  get at  the                                                               
company who claims not to know they were purchasing the Spyware.                                                                
                                                                                                                                
10:21:33 AM                                                                                                                   
CURTIS  CLOTHIER, data  processing  manager, Legislative  Affairs                                                               
Agency,  provided an  overview  of Spyware.  The  following is  a                                                               
Powerpoint presentation entitled: Spyware 101.                                                                                  
                                                                                                                                
Definition of Spyware:                                                                                                          
   · Software that collects personal information, or makes                                                                      
     changes to your computer without your knowledge or consent.                                                                
                                                                                                                                
Occurrences of Spyware:                                                                                                         
   · 2003 2 out of 100 support calls concerned Spyware.                                                                         
   · 2005 2 out of every 5 support calls concerned Spyware                                                                      
   · 50 % of calls to Microsoft involve Spyware.                                                                                
                                                                                                                                
10:23:59 AM                                                                                                                   
Signs of Spyware:                                                                                                               
   · Lots of pop-up ads                                                                                                         
   · Homepage or other settings are changed                                                                                     
   · New toolbars appear                                                                                                        
   · New icons appear on your desktop                                                                                           
   · Computer slows down                                                                                                        
                                                                                                                                
How does Spyware get installed?                                                                                                 
     By installing "free" software such as:                                                                                     
          Screensavers                                                                                                          
          Weather info                                                                                                          
          Toolbars                                                                                                              
          Music sharing                                                                                                         
                                                                                                                                
10:25:27 AM                                                                                                                   
SENATOR HOLLIS  FRENCH asked whether  a person could  get pop-ups                                                               
without ever installing Spyware.                                                                                                
                                                                                                                                
MR. CLOTHIER answered yes. Many  websites are designed to deliver                                                               
pop-up ads to your computer.                                                                                                    
                                                                                                                                
SENATOR  THERRIAULT clarified  some  websites legitimately  place                                                               
their own pop-up ads but Spyware takes over the ads.                                                                            
                                                                                                                                
10:27:46 AM                                                                                                                   
MR.  CLOTHIER continued  many  websites place  a  cookie on  your                                                               
computer so  it knows a little  bit about you. Merely  visiting a                                                               
website can  open the  door where  software is  installed without                                                               
your consent.                                                                                                                   
                                                                                                                                
10:29:16 AM                                                                                                                   
How does Spyware get installed?                                                                                                 
A lengthy  "end user licensing  agreement", which most  people do                                                               
not read, might say you cannot uninstall the Spyware.                                                                           
                                                                                                                                
What does Spyware do?                                                                                                           
   · Change computer settings                                                                                                   
   · Occurs without your consent                                                                                                
   · Steals confidential information                                                                                            
                                                                                                                                
Good Software vs. Bad:                                                                                                          
     Not all software that collects information is bad                                                                          
                                                                                                                                
10:31:41 AM                                                                                                                   
How Do You Remove Spyware?                                                                                                      
   · Spybot                                                                                                                     
   · Spy Sweeper                                                                                                                
   · Ad-aware                                                                                                                   
                                                                                                                                
Despite  all the  best efforts,  Spyware  causes serious  issues.                                                               
Spyware removal is taking more time than virus removal efforts.                                                                 
                                                                                                                                
10:32:59 AM                                                                                                                   
Solutions:                                                                                                                      
   · Education                                                                                                                  
   · Technological tools                                                                                                        
   · Legislation                                                                                                                
                                                                                                                                
10:34:38 AM                                                                                                                   
SENATOR HUGGINS asked what SB 140 would accomplish.                                                                             
                                                                                                                                
MR.  CLOTHIER  answered SB  140  would  be  a signal  to  Spyware                                                               
operators that they will be  regulated. It will provide a benefit                                                               
to  computer  users  by  giving   them  recourse.  Major  Spyware                                                               
provider companies  are listed in  the NASDAQ. The  major players                                                               
are easy to identify.                                                                                                           
                                                                                                                                
10:38:05 AM                                                                                                                   
SENATOR THERRIAULT  announced his  intention to have  the drafter                                                               
remove  the finding  and  intent section  before  putting SB  140                                                               
before a vote.                                                                                                                  
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Vice-Chair Huggins adjourned the meeting at 10:39:38 AM.                                                                      

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