• by Wendy Davis  @wendyndavis, January 11, 2013

The Internet service provider Wide Open West has scored a significant victory in long-running litigation, stemming from its partnership with defunct behavioral targeting company NebuAd.

U.S. District Court Judge Edmond Chang in the Northern District of Illinois recently dismissed a claim alleging that WOW intercepted the consumers' communications by partnering with NebuAd. Chang ruled that the consumers didn't present enough facts to move forward with a claim that the ISP intercepted their data.

Instead, the allegations only amount to a claim that Wide Open West "facilitated" NebuAd's acquisition of data, Chang ruled. "Yes, WOW diverted the communications to NebuAd, but it was NebuAd that actually acquired the communications in the sense of the statute, meaning it was NebuAd that actually accessed the communications when it analyzed them to fashion targeted ads," Chang wrote. The judge did not dismiss the case in its entirety, but it's not clear whether the consumers will be able to proceed given the recent decision.

Wide Open Web was one of six Internet service providers to test NebuAd's ad-serving platform in 2007 and 2008. The company, which shuttered soon after news of the tests came to light, worked with ISPs to gather data about Web users' activity and serve them targeted ads. The controversial technology drew objections from privacy advocates as well as lawmakers. One criticism was that ISPs could provide data about everything consumers did online -- including their sensitive searches and browsing activity at noncommercial sites.

NebuAd said its data collection was anonymous, and that consumers could opt out of the program.

In 2008, after news of the tests came to light, consumers sued NebuAd and the six ISPs, arguing that the companies unlawfully installed "spyware." NebuAd agreed to a $2.4 million settlement, but the ISPs fought the cases.

Chang's decision is in line with a recent 10th Circuit Court of Appeals ruling in favor of Embarq -- another company that worked with NebuAd. The appellate court said that NebuAd alone was responsible for any interceptions of subscribers' data.

Other ISPs who partnered with NebuAd were CenturyTel, Knology, Bresnan and Cable One and Wide Open West. A lawsuit against CenturyTel was dismissed in 2011, while a case against Knology was sent to arbitration. Litigation against Bresnan is still pending.