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Post date: February 15 2007

New York Attorney General Vindicates Free Speech Rights Of Consumers

NEW YORK, NY (February 15, 2007)—Attorney General Andrew Cuomo today announced that the State has reached a settlement with Blue Coat Systems, Inc. over the company’s use of end user license agreements that claimed to prevent consumers from testing and criticizing Blue Coat products.  Blue Coat is a leading developer of enterprise-level security hardware and software products.

Before the Attorney General’s action, Blue Coat included language within its End User License Agreements that required the company’s permission in order to publish test results comparing Blue Coat products to competitors’ products (often called “benchmark tests”).  Many Blue Coat customers did not even have the opportunity to review the License Agreement before purchasing the product; Blue Coat’s terms were only revealed to consumers after the purchase.

“Companies don’t have the right to pick and choose who can test their products, nor can they legally silence criticism,” Cuomo said.  “Companies that believe in their products should welcome the free exchange of information and opinions — not threaten legal action against critics. In this case, many customers did not even have an opportunity to soldier through a lengthy license agreement —  which threatened their rights — until buying the product. That is unacceptable.”

The Attorney General’s office began investigating Blue Coat after receiving a complaint from a third party that Blue Coat had invoked the “anti-benchmarking” clause to prevent the third party from publishing test results about Blue Coat’s proxy servers.  In agreeing to settle the case without litigation, Blue Coat agreed not to include anti-benchmarking clauses in license agreements with New York parties — or any other clause that interferes with a third party’s right to test and comment on Blue Coat’s products.  Blue Coat has also agreed not to seek to enforce anti-benchmarking clauses included in earlier license agreements with New York consumers.

Blue Coat has also agreed to pay the State of New York $20,000 in penalties and $10,000 for the costs of investigation.