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Microsoft, McDonald's absolved of tracking cookie abuse

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A judge has gutted a lawsuit that accused companies including Microsoft, McDonald's, and advertising network Interclick of fraud for the use of code that tracked the browsing history of website visitors, even when they took pains to keep that information private.

Wednesday's dismissal of claims under the federal Computer Fraud and Abuse Act and breach and interference of contract statutes came in a case that challenged the use of Adobe Flash cookies by Interclick to track people over extended periods of time as they surfed from site to site. New York City consumer Sonal Bose alleged use of the technology, and JavaScript that detected what websites she visited, were deceptive and invaded her privacy because they allowed tracking cookies to be resurrected even after she deleted them.

US District Judge Deborah A. Batts of the Southern District of New York, dismissed most of the claims brought by Bose under a rationale that's becoming common in privacy-invasion lawsuits. The crux of her basis is that there wasn't an injury that could be quantified in monetary amounts required by the statutes. She said the plaintiff failed to prove that the secret tracking created actual damages of $5,000 or more, as required under the CFAA.

“Only economic damages or loss can be used to meet the $5,000.00 threshold,” Batts wrote in the 28-page decision. “The limit based on economic damages under the CFAA 'precludes damages for death, personal injury, mental distress, and the like,'” she added, quoting from a 2004 decision from the Ninth Circuit US Court of Appeals.”

She went on to say: “Advertising on the internet is no different from advertising on television or in newspapers. Even if Bose took steps to prevent the data collection, her injury is still insufficient to meet the statutory threshold.”

The judge also dismissed claims for breach of implied contract and tortious interference with contract. Several claims brought under New York state laws were dismissed against the website operators that relied on Interclick, which in addition to Microsoft and McDonald's, included the CBS network and a US subsidiary of Mazda. She allowed claims brought under New York State law and under a trespass statute to remain against Interclick.

The ruling is the latest to dash a lawsuit alleging invasion of privacy because the plaintiff couldn't meet the required showing of monetary damages. Facebook, prescription processor Express Scripts, and job application processor Vangent have been absolved for alleged failures to safeguard sensitive information on similar grounds. The Technology & Marketing Law blog has legal analysis here.

According to the lawsuit gutted Wednesday, Interclick used Flash cookies to back up more traditional browser-based cookies it used to track which websites individual users visited. Until recently, Flash cookies – which are also known as LSOs, or locally stored objects – were significantly harder to delete. This allowed website operators in many case to recreate the deleted browser cookies, a practice known as “cookie respawning,” that was first revealed in 2009.

The lawsuit also accuses Interclick of exploiting a decade-old vulnerability in virtually every web browser that leaks the websites end users have visited recently. Interclick's use of history-sniffing code was first documented in December by researchers from the University of California at San Diego. Most browser makers have patched the vulnerability past year or so.

Websites and ad networks continue to use LSOs and at least one was recently accused of enhancing its cookie-respawning technique. ®

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