Web Filtering Companies Immune To Unfair Business Practices Suits

Source: http://www.kaspersky.com/kaspersky_internet_security

Can a web filter prevent another tool from showing up on your computer? Yes, according to the Ninth Circuit Court of Appeals. On June 25, 2009, the Court held in Zango, Inc. v. Kaspersky, Inc., that the Communications Decency Act of 1996 (CDA) immunizes internet security companies from unfair business practices suits. See here for opinion.

Zango produces online media software tools to users who agree to receive advertisements. Kaspersky produces internet security products that protect against malware, adware, and spyware. After installation, the Kaspersky product blocked a Zango toolbar that showed links to advertisers.

In its suit, Zango alleged that Kaspersky's blocking of the Zango toolbar was an unfair business practice. The CDA contains a safe harbor that immunizes "interactive computer service" providers from unfair business practices claims. Zango argued that the CDA's safe harbor applied only to internet service providers.

The Court rejected that argument, concluding that the only prerequisite for an "interactive computer service" "is access by multiple users of a computer server.” Kaspersky meets that requirement because it ”enables computer access by multiple users to a computer server by providing its customers with online access to its update servers." The Court explained that CDA's safe harbor extends to companies that " 'enable or make available to ... others' the technical means to restrict access to material that either the user or the provider deems objectionable." On that point, the Court agreed that Kaspersky had a good faith belief that it was blocking adware or spyware, both of which it had the discretion to deem objectionable. Kaspersky's users had the option to allow pop-up windows and to use Zango. The Court further noted that the Federal Trade Commission had fined Zango $3 million in 2006 for deceiving consumers into installing the product on their computers.

Implications For Web Filtering and Unfair Business Practices

Will the decision open the door to anti-competitive practices? An internet security software manufacturer might be able to block access to competing products. A browser manufacturer might be able to filter out search engine results that criticize the company.

Acknowledging this concern, the concurring opinion noted that "extending immunity beyond the facts of this case could pose serious problems if providers of blocking software were to be given free license to unilaterally block the dissemination of material by content providers under the literal terms (of the Act)." However, aside from the FTC fine against Zango, not much is unique about the facts of this case.

The problem is that the statutory language permits the provider to block material that the provider or its users find objectionable. Recognizing this problem, the Court suggested that Congress clarify the conditions under which interactive computer service providers can block material. Hopefully, Congress will take the Court up on its suggestion and tighten the language. Web filtering companies should have the ability to block "objectionable material," but should not have free reign to determine what is objectionable. If they are given unlimited discretion, they will have a powerful tool that will shape how software companies and advertisers do business on the internet.

It may unfortunately take more lawsuits to settle this matter. This will not be the last word.

Douglas Y. Park
Twitter: @DougYPark