Washington, DC: The House Judiciary Committee today passed the Internet Spyware (I-SPY) Prevention Act of 2005, H.R. 744, which was introduced by Representatives Bob Goodlatte (R-VA-06).  This bipartisan legislation, which passed the House of Representatives last Congress by a vote of 415-0, addresses the most egregious activities that are conducted via spyware and makes those activities criminal offenses.  Thus far the legislation has not been taken up by the U.S. Senate.

Spyware has been defined as “software that aids in gathering information about a person or organization without their knowledge and which may send such information to another entity without the consumer’s consent, or asserts control over a computer without the consumer’s knowledge.”  In April 2004, the Federal Trade Commission testified before a House Subcommittee that “spyware appears to be a new and rapidly growing practice that poses a risk of serious harm to consumers”.

“I am encouraged by the passage of this legislation through the Judiciary Committee,” said Rep. Bob Goodlatte.  “I believe that four overarching principles should guide the development of any spyware legislation.  First, we must punish the bad actors, while protecting legitimate online companies.  Second, we must not over-regulate, but rather encourage innovative new services and the growth of the Internet.  Third, we must not stifle the free market.  Fourth, we must target the behavior, not the technology.  The I-SPY Prevention Act is a targeted approach that protects consumers by imposing stiff penalties on the truly bad actors, while protecting the ability of legitimate companies to develop new and exciting products and services online for consumers.”

The legislation would make the following criminal offenses:

• Intentionally accessing a computer without authorization, or intentionally exceeding authorized access, by causing a computer program or code to be copied onto the computer and using that program or code to 

-Further another federal criminal offense (punishable by fine or imprisonment for up to 5 years)
-Intentionally obtain or transmit “personal information” with the intent of injuring or defrauding a person or damaging a computer (punishable by fine or imprisonment for up to 2 years)
-Intentionally impair the security protections of a computer (punishable by fine or imprisonment for up to 2 years)

The legislation includes language to preempt States from creating civil remedies based on violations of this act.

The legislation also authorizes $10 million to the Department of Justice to combat spyware and phishing scams.  “Phishing” scams typically involve the use of fake e-mail messages and websites to lure consumers into providing bank account information, credit card numbers and other personal information.  These fake e-mail messages and websites are often indistinguishable from the real ones and often request account information from consumers.

Spyware encompasses several potential risks including the promotion of identity theft, by harvesting personal information from consumers’ computers.  Additionally, it can adversely affect businesses, as they are forced to sustain costs to block and remove spyware from employees’ computers, not to mention the potential impact on productivity.

There is also a growing concern that persistent computer security vulnerabilities may expose U.S. critical infrastructure and government computer systems to cyber attacks, which would ultimately jeopardize national security and the economy.