Cosmetic Surgery Company 'Fesses Up To Widespread Campaign Of Fake Reviews; Pays Fine

from the some-questions-though... dept

The NY Times has an article about how LifeStyle Lift, a company that does cosmetic surgery (facelifts) has reached a settlement with NY Attorney General Andrew Cuomo over posting fake reviews on its site. It wasn't just a case of some "rogue" employees posting some fake positive reviews, either. The company apparently sent out emails to employees telling them to "devote the day to doing more postings on the Web as a satisfied client." It also created its own fake facelift review websites that (of course) reflected positively on themselves. The company has apologized and agreed to pay $300,000.

Now, it's clear that the company was doing a bad thing here, but there are some questions raised about this. Eric Goldman, who also notes that the company previously had sued a review site that had many negative reviews for trademark infringement (a clear misuse of trademark law to stifle free speech), points out that it's unclear what law was actually broken here. Andrew Cuomo claims that what the company did was illegal, but doesn't point to any specific law that says so. We've seen this before from Cuomo, who has publicly accused companies of breaking the law, without ever naming the law in question.

That said, it's clear in this case that LifeStyle Lift was a bad actor. The question is how to deal with it. Goldman suggests that review sites and consumers should deal with this themselves:

Ultimately, I believe the burden should largely rest on review websites to provide a forum that is sufficiently game-resistant that consumers can trust the information on the website.... In my opinion, the only real "solution" to fake consumer reviews is to teach consumers proper techniques for searching for information and evaluating the credibility of the information they consume. This is one of those crucial life-coping skills that everyone needs to learn at an early age, right up there with the three Rs and how to manage money. Education is the only scalable answer to the problems of information credibility in our complex information society.

For the most part, I agree... though I do wonder if there's potential to make a claim that the practices violate truth in advertising type laws or other consumer protection laws on deceptive practices. Of course, I would assume that it would then be an issue for the FTC, rather than the NY Atotorney General's office.

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Feds Show Their Cards On Online Poker: Freeze Funds

from the whoops dept

For years, the federal government has insisted that online poker in the US is illegal, and reinforced it by tacking on punishment for payment processors who process gambling payments onto a totally unrelated bill about harbor safety. Poker players, on the other hand, have insisted for years that there are no laws against online poker -- in part because the laws are all against games of chance, whereas poker is a game of skill. This position received a small boost recently when a judge agreed that poker was a game of skill rather than chance. On top of this, there's been an ongoing effort underway (led by Barney Frank) to specifically make it clear that online poker is legal. However, until that bill goes anywhere, the feds apparently still believe it's very much illegal and have now started going after the payment processors, freezing the funds of payment processors who work with a variety of online poker sites. Expect quite a legal battle to follow.

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Another Court Ruling In Spain Finds Personal File Sharing To Be Legal

from the no-profit-motive dept

While the entertainment industry has been working over time to try to stop file sharing in Spain, court ruling after court ruling has found that personal file sharing is perfectly reasonable and legal -- and that sites that merely link to content rather than host it (i.e., search engines and trackers) aren't breaking copyright law either. In the latest such case, a judge found that a guy who downloaded and shared over 3,000 movies wasn't violating copyright law, because it was all for personal use with no intent to profit.

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Principal Installs Cellphone Jammer But Forgets To Check If It's Legal

from the whoops,-forgot-about-that-law-thing dept

Many educators are having trouble figuring out how to handle electronic devices in the classroom. Some have been educating students on the negative effects, encouraging them to regulate their own use. Others have even highlighted possible applications for mobile devices in the classroom. Though, many just try to ban everything. A principal in British Columbia took his school's ban to a new level by setting up a cellphone jammer. There was just one problem -- the device is illegal in Canada. The principal had ordered the Chinese device online, but some angry students were quick to find out and inform him that he was breaking the law. So much for that idea. Now, he's left looking pretty bad while cellphone use in school now seems like some kind of civil rights issue to some students.

It seems like this is less about the cellphone ban and more about maintaining authority in the school. On that front... this completely backfired. Plenty of schools have effective cellphone bans without resorting to technological blocks (I attended such a high school). Maybe the principal should explain to students and teachers why cellphones are a problem, set some reasonable guidelines for use and some reasonable consequences for violations of the policy. That would probably go a lot further to establish the principal's authority and gain his students' respect than installing an illegal device and being forced to backtrack ever could.

Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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T-Mobile Takes Out Some Handset Unlockers

from the the-only-confused-people-here-are-us dept

T-Mobile has won damages and an injunction (via Phone Scoop) against several companies that were taking bulk quantities of its prepaid handsets, unlocking them, and then reselling them. The company calls such activity "prepaid phone trafficking," when it's really just exploiting a poor business model. As in other suits filed by other operators, it sounds like T-Mobile based this one on copyright or trademark claims, saying "Consumers are harmed and may be misled about the source and origin of their mobile phones... Because the phones may still carry T-Mobile's brand, consumers may believe they are purchasing handsets manufactured for T-Mobile and covered by original warranties." That's slightly counter-intuitive: T-Mobile says the unlockers made their money by buying handsets locked to the operator, then unlocking them so they could charge a higher price when they were resold. According to T-Mobile, the phones carried a higher price, weren't sold in original packaging and didn't come with manuals. They were also, presumably, accompanied by advertising playing up the fact that they could be used on any operator's network. All of this combined would seem to make it pretty clear to buyers that they weren't buying an original, "official" T-Mobile product. So where's the basis for the confusion claims?

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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IFPI Says 95% of Music Downloads Are Illegal

from the but-then-they-would,-wouldn't-they dept

The IFPI, the international equivalent of the RIAA, has put out new stats claiming that only 5 percent of all music downloads in 2008 were legal. The group estimated that 40 billion tracks were shared illegally last year, or an average of almost 30 songs for every internet user worldwide. The IFPI says it arrived at that estimate by "collating separate studies in 16 countries over a three-year period," so it's not really clear just how accurate it is -- and of course, the higher the figure, the better, as far as the IFPI's efforts to get governments to be their copyright police are concerned. The IFPI says that global music revenues fell by 7% last year, blaming the drop on falling CD sales, which a 25% increase in digital sales couldn't overcome. The IFPI says piracy is the biggest challenge it faces; given the stats, the real challenge seems to be record labels' inability to move past its legacy business model and adapt to consumers' changing desires.

It's hard to give much credence to the IFPI report, given the way it plays with statistics. For instance, in the press release for the report, the IFPI tries to pin the blame on piracy for a downturn in the "local music sectors" of France and Spain. It backs this up by saying that new French and Spanish artists accounted for a smaller percentage of album releases in 2008 than they had before. What about established French and Spanish artists? And does a lack of new local artists have more to do with downloading, or problems with labels in how they do business, and find and promote new talent? Furthermore, when the album is declining in popularity compared to singles, and new artists more likely to take advantage of this by targeting the singles market, is this even a legitimate metric for this purpose? These IFPI stats should be taken with a large grain of salt, and their intended purpose -- to further the group's goal to get governments and ISPs to prop up record labels' outmoded business models -- should be considered.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Should It Be Illegal To Sell A Keylogger? Or Just To Use It?

from the might-be-pushing-the-boundaries dept

A court has issued an injunction temporarily banning the sale of a keylogger product called RemoteSpy. The ruling probably makes sense under the current FTC law, but it does raise some questions about whether it really makes sense to ban the sale of such a program, versus just the use of one. I can certainly understand why you might want to ban the sale of such programs, because if they're sold, they're perhaps more likely to be used. However, it still seems wrong to make it illegal to sell some software because that software can be used for illegal activities. Shouldn't the liability belong to those who actually use the software for illegal purposes?

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Is Public Shame Enough To Keep ISPs From Doing Bad Stuff With Your Data?

from the not-if-no-one-knows-what's-going-on dept

While there has been a lot of attention paid recently to ISPs using clickstream tracking to provide targeted ads, it seems that many people are still focused on the activities of the ad companies, such as NebuAd, which garnered some attention from Congress for its offering. However, as we pointed out recently, many ISPs have been selling your clickstream data to others for years without people knowing about it. Now, with Congress threatening to put regulations in place, the various ISPs are scrambling to push back against that possibility.

For example, Broadband Reports points out that Verizon is claiming that the chance of a public shaming will keep the company honest. While it's certainly true that a public shaming is a risk, it's also true that the sale of clickstream data is usually kept entirely secret, which would preclude any sort of public shaming. Public shaming could work if the companies were upfront and honest with how they're using data. But, since they're not, it's difficult to see how that works as a self-regulating mechanism.

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Is The Indictment Of The Palin Email Hacker Legally Correct?

from the truthiness dept

Stephen Colbert famously coined the term "truthiness" on the very first episode of The Colbert Report. The word is used to explain a person who knows something is true in his or her "gut" rather than via any facts (and, of course, continues to believe that it's true even if the facts contradict the claim). I'm beginning to wonder if there needs to be a similar world for the legal world, where you believe something must be illegal, in your gut, even if the law itself doesn't appear to cover it. That's what we see with folks who want to string up Lori Drew, the woman whose online conversations with a former friend of her daughter may have resulted in that girl's suicide, despite little evidence that Drew's actions broke any actual law. Yet, because of the quasi-lynch mob mentality of folks who felt in their gut that it must be illegal, prosecutors eventually twisted a law to charge her.

Now it's looking like the recent indictment of a teenager for breaking into Vice Presidential candidate Sarah Palin's email may be facing a similar situation. We had already noted that Justice Department's own definition of the law might make it difficult to prosecute the hacker. However, now a friend sent over an interesting analysis of the indictment itself, by Orrin Kerr, which suggests the entire indictment is legally flawed. Specifically, the statute used, claims that the intrusion is only a felony if used to further a criminal activity.

As Kerr notes, it's not clear what criminal activity was "furthered" by hacking into the email -- unless you read the whole thing recursively, such that the act itself is illegal, and thus doing it is furthering that illegal act. But, obviously, that's legally problematic. So once again, it looks like a situation where plenty of people believe that the act was illegal (very reasonably so, I might argue), but the feds are having trouble finding a law that actually makes it illegal. So, do we have any Colbertian suggestions for what this should be called? Illegalism? Illeginess? Illegfulness?

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Most People Don't Realize Their ISPs Are Already Spying On Them

from the wake-up... dept

We recently wrote about how you should probably be more nervous about the data your ISP is collecting rather than what Google is collecting, because your ISP has access to a lot more data, and the data it has isn't data that you chose to give, as in the case of Google. Plus, ISPs have a long history of selling that data. Now, a new study is showing that most people have no idea that their ISPs track and sell their data, with many believing that an ISP would need to first let them know if they were doing that. In fact, many people are quite concerned about how that data would be used, not realizing that it's already being sold. And, of course, it's not just being sold to ad companies like NebuAd and Phorm, but to website tracking firms like Compete and Hitwise. And, even if that data is sold solely for the purpose of creating trend data, there's no reason that uses can't change over time. For example, the Register is noting that a recent patent lawsuit suggests that trend-tracking research firm Hitwise (which was recently bought by credit giant Experian) may be working on an advertising product as well, that also uses your clickstream data.

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UK Police Stop Phorm Investigation, As They Don't See Any Criminal Behavior

from the civil,-however.., dept

While American competitor NebuAd may be on the verge of shutting down, it appears that Phorm, the controversial clickstream tracking, behavioral ad company that focused mainly on the UK market, may be dodging a series of bullets. First, the government said that clickstream tracking could be legal if the situation was clearly explained to customers and there was an obvious mechanism for opting out. Now, UK police are dropping their own investigation of earlier trials with BT, which many believed were illegal because they were done with no notice to consumers at all, and no way to opt-out. That would seem to go against the government's earlier statements, but the police are saying that there's no evidence that this is a criminal matter -- which would leave this open to civil lawsuits from individuals who were impacted by the trials.

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India Looks To Make Open WiFi Illegal

from the overreact-much? dept

In most of the discussions we've had over the years concerning the legalities of open WiFi networks, the issue was whether or not it was legal to access an open WiFi network. Over in India, they're taking a different approach, apparently preparing rules that would outlaw offering an open WiFi network (via Slashdot). This is in response to the recent bombings in India, where officials believe the bombers used open WiFi networks to email each other. That seems like a pretty big overreaction. If it's not open WiFi, the terrorists will come up with other ways to communicate -- and in the meantime you inconvenience everyone else, and make it impossible for those who want to offer open WiFi to do so.

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isoHunt Seeks Declaratory Judgment In Canada On Legality Of Torrent Tracking

from the one-to-watch dept

You may remember that soon after the entertainment industry provided The Pirate Bay with a ton of free publicity by getting the site (oh so briefly) shut down, its next target was isoHunt, which similarly backfired. While isoHunt is still involved in litigation in the US with the MPAA, up in Canada, the Canadian Recording Industry Association (CRIA) has sent it a threatening letter demanding that it shut down. Similar threats have worked against other BitTorrent tracker sites, but isoHunt feels that it's on pretty firm legal grounds, and has filed a lawsuit against the CRIA, asking for a declaratory judgment that its service doesn't infringe on copyrights. It's using a similar explanation as its US lawsuit, noting that it's no different than a search engine. It also points out that when given evidence of infringing content, it takes down the related trackers -- which again should help put the site on pretty strong legal ground. While Canadian copyright law is different than US law, this is an important case to watch.

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AT&T Says It May Inject Its Own Ads In Your Surfing... And You'll Like It

from the oh-really? dept

Various ISPs have long made extra cash by selling your clickstream data to various tracking outfits. But in the last few months, it's come out that many have been either testing or considering taking things a step further by inserting their own ads based on your surfing history, using technology from firms like NebuAd and Phorm. Both of those companies have run into some trouble lately, as there are serious questions as to the legality of such practices, which have gotten the attention of folks in Congress.

While most ISPs have shied away from giving too detailed answers to Congress, apparently AT&T has decided to take a different stance. While the company says it has not tried any such ad insertion technology, it vehemently defends the idea, claiming that it would implement it "the right way" and that it "could prove quite valuable to consumers and could dramatically improve their online experiences, while at the same time protecting their privacy."

This is an old line that's been used before about these types of services: that it somehow enhances your surfing experience by throwing less crappy ads at you. Of course, this is based on the somewhat faulty assumption that people actually care about most banner ads, no matter how relevant. Also, it's hard to see how it "protects" a customer's privacy, when the whole point of these programs is to make use of your surfing details (which most people believe is private) to make your ISP more money.

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NebuAd In Trouble After Congress Suggests Its Entire Business Is Illegal

from the oops dept

We've covered the saga of companies like NebuAd and Phorm, who basically worked with ISPs to access your clickstream data and place advertisements based on your overall surfing habits, rather than the specific page that you're on at that moment. It didn't take long before people realized that such services (beyond just being somewhat deceptively implemented by ISPs) were probably illegal. And, of course, given the public outcry over these services, it didn't take long for Congress to get involved, suggesting that it felt these activities were illegal.

So, of course, if you happen to work at Phorm or NebuAd, you've got a bit of a business model problem (not to mention the potential legal problem). The Register is reporting that NebuAd has now laid off a bunch of employees -- and also dumped its PR firm. Considering the fact that no amount of PR probably could have stopped consumer outrage over how these services were implemented, it seems like the PR firm may have been something of a scapegoat --- or, perhaps, the company just realized that any PR work at this point is simply futile.

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Why Are People Being Sent To Jail For Unlocking A Mobile Phone?

from the bad-news-all-around dept

For a few years, we've been covering the various lawsuits over mobile phone unlocking, mostly involving the company TracFone. TracFone focuses on the "prepaid" mobile phone market. That is, rather than selling long term contracts to people with various total minutes, it just sells phones with a certain number of minutes already on them that can then be re-upped at the buyer's discretion. However, like typical mobile phone service providers, TracFone subsidizes the price of the phone in order to make it seem quite cheap (sometimes as low as $10 or $15). The idea is to hook people and make money on selling the minutes. However, there's no requirement that people buy more minutes.

What's happened, of course, is that people figured out a huge arbitrage opportunity. They buy TracFone phones on the cheap, unlock them, and then resell them for a higher price (often outside the country). The problem here is TracFone's choice of a business model. It decided to subsidize the phones and it set up a business model that doesn't require people to sign a long term contract or ever agree to buy more minutes. However, if you listen to TracFone tell the story, this is a case of felony interference of a business model, and anyone unlocking those phones must be stopped.

For a while it was abusing the DMCA for this purpose -- using it to claim that the unlocking was circumvention of copy protection. Of course, that's exactly how the DMCA is not supposed to be used -- and that was made even more clear when the Library of Congress explicitly carved out an exemption for mobile phone unlocking, making it quite clear that this is perfectly legal. TracFone has whined about this, but it still doesn't amount to much more than that the company just picked a bad business model.

However, the situation keeps getting more bizarre. Some folks involved in one of these arbitrage opportunities were eventually arrested for terrorism, after US officials assumed that anyone buying so many prepaid phones must be planning some sort of attack (don't ask). This had companies in the space suddenly claiming that this action of unlocking prepaid phones was a national security threat (seriously). What's scary is that some officials seem to believe it.

It turns out that TracFone actually is winning a bunch of the lawsuits it's filing, using both questionable copyright and trademark claims. However, the real kicker is that one man is actually facing jailtime for this. It's a little unclear from the wording in the article, as the jailtime may actually be as a result of him ignoring a judge's order to stop the practice of reselling unlocked TracFones -- but it's still not clear why it's illegal to unlock these phones that were legally purchased. The DMCA exemptions say that unlocking a phone is perfectly legal, and as long as the phone was legally purchased, it's now the possession of the buyer, who should be allowed to tinker with the software and resell it without having to worry about lawsuits or (worse) jailtime. Yes, TracFone is upset that it wipes out their business model, but the law isn't designed to protect their own poor choice of business models.

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Research Into NebuAd Finds Controversial And Potentially Illegal Tactics

from the not-looking-good dept

NebuAd is a company we've discussed before, that basically works with ISPs to use your clickstream data to send targeted ads. It's quite similar to Phorm, which has received plenty of attention for its questionable behavior over in the UK. Now, some researchers have looked into the details of what NebuAd really does... and it's not pretty:

NebuAd exploits normal browser and platform security behaviors by forging IP packets, allowing their own JavaScript code to be written into source code trusted by the Web browser. NebuAd and ISPs together cooperate in this attack against the intentions of the consumers, the designers of their software and the owners of the servers that they visit.... NebuAd breaks the rules of acceptable behavior on the Internet. It monitors what you do and see on the Internet, it breaks in and changes the contents of your private communications, it keeps track of what you've done, and if you even know that it's happening, it is impossible to opt-out of it."

Perhaps Charter Communications and other ISPs that have signed up for NebuAd should have researched things a little more thoroughly. Congress is already investigating the legality of something like NebuAd, and one assumes that a report like this may find its way to many of those politicians pretty quickly.

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Judges Rejects Gambling Group's Attempt To Toss Out Anti-Online Gambling Law

from the keep-trying dept

A group calling itself the Interactive Media Entertainment & Gaming Association has failed in its attempt to get a judge to throw out Congress' law designed to ban online gambling. While the judge did note that the group has standing to bring this suit (which was an open question), she did not find their case compelling at all. She basically said that Congress passed the law legally and it wasn't a violation of the Constitution. The group is planning to appeal, but it still seems like a more likely path towards getting such a law overturned is to convince Congress that it made a mistake.

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TorrentSpy Loses To The MPAA... But For The Wrong Reasons

from the bad-news dept

TorrentSpy has lost the first round of its case against the MPAA, but the details suggest that it's for all the wrong reasons. TorrentSpy, of course, is like many other torrent trackers: it's a search engine. While the MPAA went after TorrentSpy claiming that it was violating copyright laws like Grokster/Morpheus, TorrentSpy pointed out (correctly) that the Supreme Court only said that service providers who actively encourage copyright infringement can be held liable. Instead, TorrentSpy noted, it was a search engine, just like Google -- which is quite accurate. However, the court seemed to have difficulty understanding this -- and when the court ordered TorrentSpy to spy on its users (against TorrentSpy's own terms of service), the company instead chose to cut off US users. This seemed quite admirable and reasonable. It was, in fact, a lot more admirable than the MPAA, who hired someone to hack into TorrentSpy's servers and pass on internal emails. However, it appears that TorrentSpy's decision to not spy on its users and to block access to US users is part of what caused it to lose the case. The ruling isn't on the merits of the actual copyright claim, but on the claim that TorrentSpy destroyed evidence -- such as the IP addresses of its users. There does appear to be some additional egregious destruction of evidence from TorrentSpy beyond just the IP addresses of users -- which was incredibly stupid for the company. That certainly hurt the company's position. However, that does not address the merits of the original lawsuit. The MPAA, of course, is claiming this is a huge win, but that's just its usual press release quote and has little to connect it to reality: which is that the MPAA won this case on a technicality rather than the merits. TorrentSpy plans to appeal, so this is hardly over -- but the destruction of evidence will hurt the rest of TorrentSpy's position, no matter how reasonable it may have been.

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