NEW YORK -- A class-action lawsuit charging invasion of privacy has been filed against America Online (AOL) and its subsidiary Netscape Communications Corp.

The lawsuit, filed in the Seventh New York District Court by plaintiff Christopher Specht, charges that "SmartDownload," a software product distributed by Netscape, has been "spying on" Internet users' activities. AOL, based in Dulles, Va., acquired Netscape, of Mountain View, Calif., in 1998.

Specht is a photographer who runs several photographic websites, some with sensitive materials, that invite visitors to download .exe files. He has brought this action on behalf of himself and other "persons or entities who maintain websites on the Internet that provide .exe or .zip files that can be downloaded by Internet users."

The suit is seeking to recover damages resulting from the alleged theft of the plaintiff's private information, in violation of the Electronic Communications Privacy Act and the Computer Fraud Abuse Act.

The SmartDownload software enables users to interrupt an .exe or .zip file download without corrupting the data being sent. The software, claims the suit, "secretly transmits to defendants [Netscape] information identifying the name, type, and source of each and every .exe and .zip file that an Internet user downloads from any site on the Internet."

Further, the suit maintains that "coupled with the unique information uniquely identifying each visitor, it permits Netscape to create a continuing profile of ... each visitor's file transfers over time."

"We believe that there are potentially hundreds of thousands of people who have been affected by this," Joshua Rubin, class action attorney and partner at Abbey, Gardy & Squitieri, LLP, who filed the suit, told UpsideToday. As far as he is concerned, "SmartDownload is an electronic bugging device."

AOL and Netscape did not return calls.
Scary stuff? Depends on who you ask. Ralph Losey, an Internet law specialist, at TheFloridaLawFirm.com, told UpsideToday, "It's the same old privacy issues that were raised by credit cards but with more and more people joining the Internet this has become a sensitive area of the law." In order to avoid such "invasion of privacy suits" in the future, Losey recommends disclosure of services and potential breaches to an individual's privacy via the agreement page. "Nobody reads them but it protects the company even if it's only a technical disclosure," he said.

Without the benefit of sufficient legislation governing online privacy, Losey said, the industry has been policing itself. "At the moment this is a cutting-edge issue," Losey said. "I am surprised by Netscape, if this suit is correct." Losey does see a point in the future when legislatures will be forced to address the issue of Internet privacy and the collection of a Web surfer's content habits.

Don't pencil a date for this year though. Said Losey, "I suspect the Internet industry will continue self-policing, and that there will be pro-bono cases trying to protect individuals against corporations," that will test the law.