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Plaintiffs’ Lawyers Open New Challenges to Ad Servers and Cookie Use

December 2000

The Internet privacy debate will play out in the courts now that plaintiffs in Denver, Colorado and Redmond, Washington have filed federal class action lawsuits against MatchLogic and Avenue A. The two suits, filed early this month, essentially charge that the companies violated the federal Electronic Communications Privacy Act ("ECPA") and the Computer Fraud and Abuse Act by placing cookies on the hard drives of consumers' computers.

Attorneys for the Milberg Weiss Bershad Hynes & Lerach class action law firm, who are involved in both suits, say the plaintiffs will argue that existing wiretap rules under the ECPA apply to the web and that the companies are using a method that is similar to what wiretappers would do to intercept a telephone conversation. However, wiretap law experts note that the ECPA is designed to protect phone conversations, not necessarily transactional data, which data would include the number dialed and the length of the call. In addition, it is unclear that the suits will be granted class action status.

In any case, the outcome of the cases could hinge on whether plaintiffs read the companies' privacy policies. A ruling against web publishers would put even more pressure on the use of cookies and could force the industry to look to Congress to validate their use.

For additional information, please contact John Kamp (202/719-7216 or).