E-Commerce Law Week, Issue 334

A Post-Holiday Letdown for RIAA's Subpoena Hopes
As Don Henley (or was that Shakespeare?) once sang, "Let’s kill all the lawyers, kill 'em tonight." And that may be just what the Recording Industry Association of America (RIAA) is thinking after yet another Christmas-time defeat in the circuit courts. The US Court of Appeals for the Eighth Circuit on January 4 reversed a district court decision and found that §512(h) of the Digital Millennium Copyright Act (DMCA) does not authorize subpoenas to be issued to Internet Service Providers (ISPs) who act solely as a "conduit" for communications. This decision in RIAA v. Charter Communications, Inc., represents a further setback for the RIAA's efforts to get quick and easy access to records on file sharers. Last December, the RIAA's campaign of lawsuits against individual broadband subscribers who used peer-to-peer (P2P) software to share music files suffered a major blow at the hands of the US Court of Appeals for the District of Columbia. The DC Circuit ruled that the DMCA did not authorize the issuance of subpoenas to ISPs for the purposes of identifying P2P file sharers.

FTC Charges Forward in First Anti-Spyware Case
What's worse than having a company secretly install spyware on your machine so it can create a never-ending stream of pop-up adds, change your browser's home page, and otherwise clog up your computer’s resources? Not much, you might think. But what if the same company turned around and tried to sell you a $30 anti-spyware tool to "fix" your problems? That's exactly what renowned "Spam King" Sanford Wallace apparently did to a host of unsuspecting web surfers, spurring the Federal Trade Commmission (FTC) to new legal tactics. A complaint filed by the FTC in October 2004 against Wallace and two of his companies – SmartBot.Net Inc. and Seismic Entertainment Productions Inc. (the court subsequently entered a default judgment against Seismic for failure to respond) – is the the agency's first federal lawsuit against an alleged spyware purveyor. The case is still pending before the US District Court for the District of New Hampshire, but Wallace and SmartBot agreed on December 20 to a stipulated order that requires they cease exploiting certain security vulnerabilities in particular versions of Microsoft's Internet Explorer browser in an attempt to force software onto computers without the users' express authorization. 

German Court Finds eBay Indirect Accessory to Identity Theft
Late last year, a municipal court in Potsdam, Germany, issued a decision that raises the compliance bar for online service providers that are aware of identity theft involving their customers. The court found that eBay acted as an "indirect accessory" to identity theft by failure – after proper notice – to prohibit a third party from conducting auctions by fraudulently using the plaintiff's name and address. The decision appears to be largely consistent with the ISP liability provisions of the EU E-Commerce Directive, including Article 14 which provides that, once the provider is made aware of illegal activity occurring on his site, he must act expeditiously to stop it.

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