August 18th, 2011

Amazon Says Privacy Lawsuit Should Be Dismissed

Online Media Daily

Amazon is seeking dismissal of a privacy lawsuit alleging that it tricked users’ browsers into accepting cookies. The Web retailer argues that the consumers who filed the complaint lack “standing” to sue because they haven’t sufficiently alleged that they were harmed by Amazon.

“Plaintiffs assert attenuated theories of liability and harm, recognized by no court or law, based on Amazon’s alleged practices in setting ‘cookies’ on user’s computers,” the online retail site argues in papers filed recently in federal court in Seattle.

The consumers’ lawsuit against Amazon was filed in March, shortly after Carnegie-Mellon researchers reported that many Web sites thwart users’ privacy settings by providing erroneous information to Microsoft’s Internet Explorer.

That browser enables users to automatically reject certain cookies, including tracking cookies. But it can only do so when Web site operators provide accurate “compact policies”—or codes that provide information about their privacy policies to the browser. The report stated that many sites that use compact policies misrepresent their privacy practices in the compact policies.

The consumers who sued argued that Amazon was among the companies that had incorrect compact policies. “Amazon circumvents the privacy filters of IE users by exploiting IE in a way that caused IE to categorize as more privacy-protective than it actually is,” they argued.

But Amazon says in its motion to dismiss that those allegations don’t warrant litigation. “Although plaintiffs theorize that Amazon’s alleged practices caused them economic harm by ‘reducing the scarcity’ of their information, and ‘depriving them of the opportunity to exchange their valuable information for the content and services’ of other Websites, no plaintiff offers a single instance how he or she has been harmed personally by Amazon’s alleged practices,” the company argues.

In addition to the claims relating to Amazon’s compact policy, consumers alleged that Amazon circumvented their privacy settings by placing Flash cookies on their computers for tracking purposes. Flash cookies were originally designed to allow sites to remember users’ preferences for Flash-based applications, like online video players, but some sites also use them to store the same type of information that is normally found on HTTP cookies. Until a recent Adobe update, Flash cookies were harder to delete than HTTP cookies.

Amazon also argues that those claims should be dismissed because the Web users are not asserting that they suffered tangible economic injuries.

Many judges are confronting similar arguments in online privacy lawsuits. So far, decisions appear mixed. Earlier this year, U.S. District Court Judge George Wu in the Central District of California dismissed a lawsuit against Specific Media stemming from allegations that it used Flash cookies. Wu ruled that the consumers had not alleged they were injured by the alleged use of Flash, but also allowed the Web users to file an amended complaint. They did so and the matter is still pending.

A different federal judge, Otis D. Wright II in the Central District of California, recently rejected an argument by data aggregator Spokeo that a privacy lawsuit against it should be dismissed. In that case, a Web user argued that incorrect information on Spokeo cost him money by hampering his job search. Spokeo is now attempting to appeal that ruling.

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