• by Wendy Davis  @wendyndavis, April 15, 2008

Adware company Zango is getting some help in federal court from a coalition of business groups in its legal battle against spyware removal company Kaspersky Lab.

In a friend-of-the-court brief filed with the Ninth Circuit, the National Business Coalition for E-Commerce and Privacy argues that the trial judge should not have dismissed Zango's lawsuit against the spyware removal company. The Coalition's members include major companies like Eastman Kodak, JP Morgan Chase and Experian.

"The district court's decision will have unintended, adverse consequences that are of great concern to the coalition," the group argued in its legal papers.

Kaspersky manufactures programs that remove adware and spyware, including Zango's software, which serves consumers pop-up ads based on their Web-surfing activity. Zango alleges that Kaspersky interferes with Zango's relations with its customers. Zango alleges that consumers voluntarily install its software, and that Kaspersky is removing it against users' wishes.

But the trial judge sided with Kaspersky, ruling that the federal Decency Communications Act confers immunity on interactive computer services that undertake good-faith efforts to restrict material that users consider "objectionable." Zango is appealing that decision.

The coalition's members operate Web sites that place cookies on users' computers when they visit the site. The group is concerned that the trial judge's decision would immunize spyware removal companies that market software that deletes their members' cookies.

In its brief, the coalition argues that Congress intended to give immunity to companies that aim to restrict material that users don't want to view. "Although (interactive computer services) enjoy immunity for restricting access to sexually explicit, harassing, violent and similar content that consumers do not wish to view, it strains credulity to conclude that Congress sought to immunize security software providers for any content that such providers themselves deem 'objectionable.'"

In the past, Zango has been accused of installing its adware without obtaining consumers' informed consent. The FTC in 2006 brought a complaint against the company, and Zango ultimately agreed to pay a $3 million fine, refrain from installing adware without first making sure that people consented, and to monitor third-party distributors to make sure they aren't installing the software without consent.

The coalition quietly filed its brief earlier this month. News of the development was first reported by Eric Goldman, director of the High Tech Law Institute at Santa Clara University, on his blog.