Prepared Statement of The Honorable Cliff Stearns

Spyware: What You Don't Know Can Hurt You

Subcommittee on Commerce, Trade, and Consumer Protection
April 29, 2004

Statement of Honorable Clifford Stearns Chairman, Subcommittee on Commerce, Trade, and Consumer Protection of the House Committee on Energy and Commerce at Subcommittee Hearing Titled: "Spyware: What You Don't Know Can Hurt You." April 29, 2004

Good morning. I am pleased to welcome all of you to the Commerce, Trade and Consumer Protection Subcommittee's hearing on spyware.

Spyware is loosely defined as malicious software, downloaded from the Internet, that "spies" on the computer owner or user, usually to provide information to third parties. The Federal Trade Commission has said that spyware is software ".that aids in gathering information about a person or organization without their knowledge and that may send such information to another entity without the consumer's consent or that assert control over a computer without the consumer's knowledge."

A spyware relative, known as adware, enables the computer owner or user to receive a stream of ads and other marketing information, usually based on data the software has collected about the user. Adware or ad-supported software is frequently bundled with "free" Internet software or "freeware." Legitimate adware allows the user knowledge and consent about the software and frequently provides an adware-free version for purchase. More noxious adware versions, however, can be downloaded without consent or through deceptive means, essentially making them spyware.

As we speak, spyware and adware software programs are growing at a rapid rate. According to the computer security firm McAfee, these software programs have grown in number from around 2 million in August, 2003 to over 14 million currently. As further proof of the potential scale of this problem, the National Cybersecurity Alliance has estimated that over 90% of users had some from of adware or spyware on their computers, and most were unaware of it.

In worst cases, the more malicious varieties of spyware can record keystrokes and compromise personal information, including passwords and social security numbers. The simple act of downloading a desired program from the Internet can not only open the "door" on your personal computer and your most private information, but also can allow spies to effectively take up residence in your personal computer- YOUR PERSONAL PROPERTY - without your knowledge and consent. Then after sneaking into your computer, some of these malicious spyware programs can act as snoops-prying into your private life, or thieves-stealing personal information, or as pornography dealers- exposing your children to obscene on-line material. If and when you finally discover the "spy" lurking in your personal computer, the damage usually is already done.

In the best cases, the technology that enables spyware also can serve as a first line of defense against obscene Internet material by tracking website activity and filtering out the garbage. Other forms of the technology, like legitimate adware, are authorized by the consumer and provide businesses a new and efficient means of reaching potential customers with less expensive goods and services.

While some would have us define "spyware" with technical parameters, others believe that it's not the technology "tool" that needs to be defined and targeted, it's the unscrupulous individual preying on the consumer through these programs. Clearly, no matter the definition we create, it is always reprehensible when someone intentionally downloads secret software onto a personal computer that is designed to steal information or trick us into opening the door to their private life.

To try to address this egregious Internet activity, Ms. Bono has introduced legislation to enhance spyware disclosures, root out the deceptive and fraudulent, and create accountability. Ms. Bono's bill will require that computer users receive clear and conspicuous notice prior to downloading spyware, and that all third parties provide their identity. I commend her for her leadership on this issue. It is my hope that we can reach bipartisan consensus on legislation that will protect consumers from unwittingly being spied on.

With the help of our distinguished panel of witnesses, one of our most important tasks is to try to establish the boundaries of what is clearly legitimate and what is clearly reprehensible. We then need to explore the murky area in the middle, where cases aren't so stark and clear-cut - especially in cases where consumers are duped with lengthy and confusing license agreements, website trickery, and exploitation of weak personal computer security. The ultimate challenge, therefore, is to investigate ways industry, consumers, and the Congress can work together to rid our on-line marketplace of the bad apples while preserving legitimate uses for this software technology.

Finally, our panel today will help us understand how spyware and adware programs are distributed in commerce - both legitimate and fraudulent, the scope of the privacy and security risks posed by this software, its effects on economic productivity, and the need for federal legislation.

I welcome the witnesses today and look forward to their testimony.

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