WhenU Challenges Utah Anti-Spyware Act

Rhett Pardon
SALT LAKE CITY – An online advertising software company is challenging Utah’s new anti-spyware law set to take effect May 3.

WhenU, which offers desktops toolbars and pop-up and pop-under advertising, says the new Spyware Control Act violates free-speech guarantees and could unfairly harm its business. The company, formerly known as Gator, filed a motion for a temporary restraining order and preliminary injunction this week in the 3rd Judicial District Court in Salt Lake County.

As reported last month on XBiz, Utah is the first state to pass a law regulating spyware and other advertising software, which typically tracks computer users' actions online or uses a computer's resources to create pop up ads.

"WhenU has sought damages from Utah on the grounds that the act constitutes an unconstitutional taking of WhenU's property in violation of the Utah Constitution," the company said in a statement.

The Spyware Control Act bars companies from installing software that reports its users' online actions, sends any personal data to other companies, or pops up advertisements without permission.

The legislation, however, contains some loopholes – advertisements served by ordinary HTML or JavaScript are exempted, as are "cookies" often used to help personalize web pages. It also bars "context based" tools from triggering unrelated ads based on visiting websites on a certain topic.

WhenU said its software can only be installed after people agree to accept terms of service that explicitly describe all of its practices.

The Internet Alliance, a trade organization that includes America Online, eBay and Microsoft, has opposed anti-spyware legislation.

In a related matter, Salt Lake City-based 1-800-Contacts filed a suit last month, charging that its competitor Coastal Contacts used WhenU and other adware to deliver ads that infringe on its copyrights and trademarks.