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Post date: June 13 2003

Settlement With Netscape Reached In "spyware" Case

Attorney General Spitzer today announced an agreement with Netscape Communications, a subsidiary of America Online, regarding alleged privacy violations connected with its SmartDownload browser function. The settlement concludes a lengthy investigation into the company's collection and retention of information that identified files downloaded by its users.

The investigation found that between 2000 and 2002, Netscape's "SmartDownload" feature had, in processing certain users' download requests, also saved several categories of data relating to each download – including the Internet address, or URL, of each file user's downloaded. According to Spitzer, the retention of the information contradicted Netscape's representation to consumers that "none of this information is saved."

The Attorney General indicated that neither Netscape nor AOL had taken the further step of associating this profiling data with personally identifiable information, such as name and address, and under the agreement, such data association will be prohibited unless consumers specifically give their consent.

"I am proud that this office has won yet another victory for consumer privacy," Spitzer said. "When companies misrepresent how data is collected or saved, we will hold these companies accountable."

The agreement requires Netscape to delete all URL and related data it has obtained through SmartDownload, to undergo a series of privacy audits, and to pay $100,000 to the State of New York. Since the investigation began, the company has released several upgraded versions of the SmartDownload software which do not transmit such profiling data back to Netscape, and has successfully encouraged most of its users to upgrade to those versions.

The settlement with Netscape is the most recent in a line of the Attorney General's Internet privacy cases. Over the past year, Spitzer's office has forged Internet privacy settlements with DoubleClick, Ziff Davis, Eli Lilly, Juno Online Services, and the ACLU. His office also has proposed a state privacy law, which would regulate undisclosed data collection over the Internet.

The case was handled by Ken Dreifach, Chief of the Attorney General's Internet Bureau.