Flash Cookie Lawsuits Could Spur Courts To Reconsider Privacy Ruling

In recent weeks, class-action lawyers have filed a handful of lawsuits against companies that allegedly use Flash cookies to recreate HTTP cookies that users delete.

Already those lawsuits -- which have drawn much media attention -- seem to be creating public relations problems for the companies. But whether the litigation campaign will pose a legal risk to the online publishers and ad companies remains to be seen.

As The Wall Street Journal recentlyreported, courts in 2001 and 2003 dismissed privacy lawsuits alleging that companies unlawfully placed cookies on users' computers. The judges in those cases ruled that placing cookies on users' PCs didn't violate wiretap laws as long as the publishers consented.

But much has changed in the last seven years -- both on a technological front as well as the political one. Given the fast-evolving landscape, judges today won't necessarily agree with the conclusions that seemed reasonable to courts in 2001.

Perhaps more importantly, some observers today allege that Web publishers are circumventing users' privacy settings by recreating cookies even when people have opted out of tracking.

That alleged use of Flash raises questions about whether companies are engaging in deceptive practices -- which is a separate issue from whether they are violating federal wiretap laws or other privacy statutes.

Meantime, the Federal Trade Commission might step in before the courts are ready to act. Consumer protection head David Vladeck said in January that the agency was "examining practices that undermine the tools that consumers can use to opt out of behavioral advertising." More recently, FTC official Christopher Olsen toldThe New York Times that the commission is investigating several companies that allegedly use Flash for online ad tracking.

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