Zango Loses Legal Battle With Anti-Spyware Company

A federal appellate court has sided against adware company Zango in its dispute with spyware removal vendor Kaspersky Lab.

The 9th Circuit Court of Appeals ruled last week that Kaspersky is immune from liability for offering programs that delete ad-serving software.

"A provider of access tools that filter, screen, allow, or disallow content that the provider or user considers obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable is protected from liability," the 9th Circuit wrote.

The ruling upheld an earlier decision by a federal district court dismissing Zango's lawsuit on the grounds that the federal Communications Decency Act shielded Kaspersky from liability. That law's "good samaritan" provision protects interactive computer services from liability for good faith efforts to restrict objectionable material.

Zango filed suit in 2007, alleging that Kaspersky was interfering with Zango's relationships with its customers by deleting its ad-serving software. Zango shuttered earlier this year, but the legal proceedings continued.

The 9th Circuit's decision, issued last week, marked the first time an appellate court ruled on whether the "good samaritan" provisions apply when anti-spyware companies decide to remove programs they deem objectionable.

For that reason, the case was closely watched by other Web companies as well as consumer advocates. An umbrella group called the National Business Coalition for E-Commerce and Privacy, whose members include major companies like Eastman Kodak, JP Morgan Chase and Experian, filed a friend-of-the-court brief last year, asking the 9th Circuit to rule in Zango's favor.

They argued that a ruling in favor of Kaspersky could allow any company to offer software that interferes with other companies' programs under the guise of protecting people from objectionable content. A pro-Kaspersky ruling "will effectively empower security software purveyors as the ultimate arbiters of 'objectionable' content on the Internet," the group argued.

But consumer advocates including the Anti-Spyware Coalition, the Center for Democracy & Technology and the Electronic Frontier Foundation weighed in against Zango. The FTC brought a complaint against Zango in 2006, which resulted in the adware company's agreement to pay a $3 million fine.

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