E-Commerce Law Week, Issue 365

Wiretap Act Covers Emails In Temporary Storage, Appeals Court Says
The law governing both private and governmental acquisition of Internet communications has been a perennial source of confusion for lawyers and service providers alike.  Courts for years have struggled with questions such as whether a communication was "in transmission," and therefore subject to the rules of the Wiretap Act, or whether it was "in storage," and therefore subject to the less stringent Stored Communications Act (SCA).  Indeed, the question has almost literally made heads spin, causing judges to change their minds in the same case after having already issued a decision.  On August 11, the First Circuit, sitting en banc, added another decision to the mix.  In United States v. Councilman, the court reversed an earlier panel decision and held that email messages stored temporarily as part of the transmission process are covered by the federal Wiretap Act, and that an email provider could be prosecuted under that Act for allegedly intercepting and copying his customers' emails before they were delivered.  Though this was the result sought by government prosecutors and by some privacy advocates, the court's failure to clarify the boundaries between the Wiretap Act and the SCA could have unintended effects down the road both for Internet providers and for individual privacy rights.

FTC to Internet Users:  Don't Let the Fox Guard Your Chicken Coop
Congress may have yet to enact any sort of information security legislation this year, but that hasn’t stopped the Federal Trade Commission (FTC) from continuing to use its authority to prosecute deceptive trade practices as the vehicle for ramping up its enforcement efforts in the Internet security and privacy arena.  In the latest twist, the FTC did not go after a company for failing to live up to its own security or privacy policy, but instead aimed its sight at a company, Advertising.com, that appeared to be doing to consumers just the sort of thing it claimed to be protecting them from.  On August 3, the FTC announced that Advertising.com had agreed to settle charges that it violated federal law by failing to disclose adequately that adware was bundled with free security software that the company offered.  The settlement will require Advertising.com to “clearly and prominently” disclose that adware is bundled with software that the company advertises as enhancing security or privacy.

What Happens in Vegas ... Depends on Mississippi (at least on the Internet ...)
Even though many of the Communications Decency Act’s (CDA) provisions were struck down by the Supreme Court in 1997 (Reno v. American Civil Liberties Union), the Act’s prohibition on knowingly transmitting obscenity over the Internet to a minor is still alive and kicking. And, on July 25, this provision survived a constitutional challenge before a special three-judge panel in New York, raising again the question of what standards to apply to sexually explicit content on the Internet. In Nitke v. Gonzales, a judge from the Second Circuit Court of Appeals and two judges from the Southern District of New York issued a decision rejecting the plaintiffs’ argument that the CDA was “substantially overbroad” in violation of the First Amendment because it reached both obscene and non-obscene content.  Although somewhat sympathetic to the plaintiffs’ arguments, the court ultimately held that they failed to provide sufficient evidence that the law was unconstitutional.

The universality of the Internet presents a conundrum for the legal regime governing sexually explicit content, which (under the Supreme Court's test in Miller v. California (1973)) determines whether content is obscene based in part on local "community standards."  When courts rely on community standards, it is quite possible that the same material could be deemed obscene in one local community (say, in Mississippi) but not in another (say, Las Vegas).  As a result, Internet publishers might refrain from publishing content that might be considered obscene in some local community even if it would not be considered obscene elsewhere, effectively meaning that the most socially conservative communities (or perceptions of what they think, anyway) determine what the rest of the nation can see.  The Supreme Court wrestled with this problem in 2002 in Ashcroft v. ACLU, but could not muster a majority for any particular solution, leaving the Nitke court with little clear guidance.  Until the Supreme Court addresses this issue again, Internet content providers run the risk of being held to the community standards of the most socially conservative communities in the countries -- which is precisely where prosecutions under obscenity laws are most likely to be brought.

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