[ql06] GENERAL: When Free Isn't Really Free
- From: Sheldon Erentzen <sheldon.erentzen@xxxxxxxxxxxx>
- To: QL'06 newslist <ql06@xxxxxxxxxxxxx>
- Date: Sun, 23 Nov 2003 10:54:42 -0500
This article is interesting in that it combines questions of
law, technology, privacy issues and copyright. The fact that
there is hidden spyware in otherwise innocuous programs
surprises me; not because I hadn't heard of it, but because it
seems such a blatant intrusion on a person's rights, that it
blows me away that such mainstream companies as Macromedia are
doing it. I spent sometime as a production co-ordinator and
have done some programming--I used to use Flash/ Director 6
and Shockwave quite a lot. If you've looked at any Flash
movie style websites (the ones with fancy animation that you
can [skip] if you want), you've probably got some Macromedia
software on your computer.
<http://www.nytimes.com/adx/bin/adx_click.html?type=goto&page=www.nytimes.com/printer-friendly&pos=Position1&camp=foxsearch50a-nyt5&ad=in_america_3-printer&goto=http%3A%2F%2Fwww%2Efoxsearchlight%2Ecom%2Finamerica%2Findex%5Fnyt%2Ehtml>
November 23, 2003
When Free Isn't Really Free
By JOHN SCHWARTZ
REE.
Is there any sweeter word? Its promise of something for nothing, and its
underlying connotation of liberation, put a spring in the step and make
the world seem a better place.
But lately, free isn't what it used to be, especially on the Internet,
whose very history and technology are based on the notion that
information and pretty much everything else online want to be free. Web
giveaways increasingly come at a steep price, in the form of computer
glitches, frustration and loss of privacy and security - not to mention
the threat of expensive lawsuits for large-scale music downloaders.
"You often get what you pay for," said Mitch Bainwol, chairman of the
Recording Industry Association of America. "In the case of what is
so-called free, it comes along with challenges."
Of course, that is what you would expect him to say. Mr. Bainwol, after
all, is the chief representative of an industry that says it has
suffered grievous harm from music downloading, and that is trying to
quash the free-music movement with lawsuits.
But now people from all sides of the Internet copyright debate have
begun to notice that freebies often mask a multitude of possible
cybersins. A report released last week by the Center for Democracy and
Technology, a high-tech policy group in Washington, called for new
regulations, voluntary industry measures and consumer education to
combat the problem of "spyware" that often piggybacks on programs,
including the software people use to download music.
The Federal Trade Commission has not tried to prosecute any companies
for distributing spyware, and courts have declared the programs legal so
far. But the Center for Democracy and Technology says that more should
be done to protect consumers from sneaky software. "Spyware represents a
serious threat to users' control over their computers and their Internet
connections," the report said.
The definitions are fuzzy, but the programs fall under three broad
categories: "adware," which serves pop-up ads and banners, including
some for pornography; true "spyware, " which monitors Web wanderings for
marketing purposes; and more insidious "snoopware," which can track
everything users do on their computers, whether or not they are online.
Some programs can even disable anti-virus software and hijack the
results of Web searches.
The list of suspect software is long. Kazaa, the most popular program
for downloading free music, comes with a cluster of software, some
created by a company called Brilliant Digital Entertainment
<http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=BDE>.
One of Brilliant's "extras," called Altnet, can even make someone's
computer part of a Brilliant-owned network that harnesses a PC owner's
excess computing power to distribute music. Derek Broes, a vice
president at Brilliant, said that the program could be turned off by
computer users and that the company's products should not be classified
as spyware.
On its Web site, the company states that revenue from advertising and
installed programs are part of what makes Kazaa free; you can get a
version of the software without ads and other clutter, but it will set
you back $29.95. Nikki Hemming, the chief executive of Sharman Networks,
which owns Kazaa, said in an interview that the extra programs were not
a big issue for users. "I think there is a bar not to be crossed, and
we've been pretty careful to manage that," she said. With 10 million
Kazaa downloads a month, "it's not a deterrent to consumers," she added.
The problem is that very few of those doing the downloading know what
they are getting into. That is because most people do not bother to read
the contracts that they click through when they install Kazaa - or, for
that matter, any other programs and services they download.
"These user agreements that allow the downloading of spyware are Trojan
horses," said Representative Mary Bono, Republican of California, at a
House Energy and Commerce subcommittee hearing last week. "The average
user has no idea that he or she is opening up their entire personal and
financial life, down to the keystroke, to an unknown, often
ill-intentioned, third party," said Ms. Bono, who introduced a bill last
summer to restrict the use of spyware that operates without a computer
owner's full knowledge or consent.
Sharman is not the only company giving people unwanted extras. Gator,
one of the first pieces of software to be described as spyware by
security and privacy experts, is made by a company now known as Claria.
It is automatically installed with many free programs and can track a
user's Web surfing habits - without actually identifying him or her by
name - for marketing purposes. Some versions can keep even closer track
of individuals, giving each one a user ID, according to the report of
the Center for Democracy and Technology.
Computer games available free from sites like Shockwave.com often carry
a program called n-Case, which inundates online shoppers with pop-up ads
promoting rival offerings. On its Web site, the company that makes the
software, 180Solutions, says 16 million people have downloaded its
program, which it says offers advertisers "a 360-degree view of the
user's behavior - 24 hours a day, 7 days a week."
People who turn to free services for songs, movies or software may get
something else they haven't bargained for: viruses. Bruce Hughes, the
director of malicious-code research at TruSecure, a computer security
company, says that as much as 45 percent of the free software available
on Kazaa may be infected with computer viruses. A Sharman spokesman said
the company provides virus protection for downloads.
Before long, the mounting collection of adware, spyware, Trojans and
viruses can turn a person's zippy computer into a sludgy, slogging mess.
"When their computer gets too slow, they go off and buy another
computer," Mr. Hughes said.
Free, in other words, can end up costing a bundle. "Free's got a price
tag on it, that's for sure," said Ed English, the chief executive of
InterMute, a company based in Braintree, Mass., that makes programs to
block adware, spyware and spam. (The latest versions of Internet
security packages from major antivirus companies like Network Associates
<http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=NET>,
Symantec and Trend Micro
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can also block spyware.)
"You're paying with your privacy," Mr. English said. "You're paying with
your productivity loss. You're paying with your computer speed."
It hasn't always been this way. Giving away samples and selling "loss
leaders" cheaply enough to attract customers is a tradition practically
as old as commerce itself. And industries like broadcasting have long
followed the advertiser-supported business model, providing news and
programming free to consumers - or, in the case of newspapers, at
relatively low cost.
Jonathan Zittrain, who teaches Internet law at Harvard and is a director
of the university's Berkman Center for Internet and Society, said that
the Internet itself reinforced the idea that information should be free.
That is the spirit that led to the free-software and open-source
movements, in which volunteers work on software together and make it
available to others, often at no cost.
The collaborative, early stages of the online medium encouraged sharing.
Vast libraries of information appeared on the Web. The dot-coms carried
the idea further, using soaring stock prices and venture capital money
to provide content and services to customers free or at steep discounts.
The new business models blended the old advertising idea with a
near-religious faith in growing fast to build customer loyalty.
During the boom, one company, ZapMe, went so far as to install free
computer labs in schools across the country in return for being able to
show ads to students while they surfed. (ZapMe, which came under fire
from people who oppose commercialism in schools and from privacy
advocates, has since changed its name to rStar
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and dropped the free-computers business; it now sells high-speed
Internet access to businesses and schools.)
NO wonder, then, that when the technology became available to download
music and other digital media easily, tens of millions of people jumped
at the chance without considering the legal implications. The nature of
downloading made the copyright issues even fuzzier in the public mind.
Downloading a song, Professor Zittrain noted, is not like stealing a
loaf of bread. "You don't see the loaf of bread missing on the
windowsill," he said. "You see the bread on the sill and one that has
magically appeared in your hand."
When the dot-com bubble burst, however, the freebie model largely
collapsed along with it, said Alan Davidson, the associate director of
the Center for Democracy and Technology and an author of the report on
spyware.
"They were business models based on hope," he said.
Some true freebies survived the crash. Programs that allow computer
users to read the ubiquitous ".pdf" files or to listen to sound clips
still cost nothing. Their makers get revenue by selling premium versions
of the programs and industrial-strength versions used to produce the
documents and clips. Many Web sites, from the online magazine Slate to
the Internet Movie Database, still offer their content free and support
themselves with advertising. The companies behind popular software like
Eudora, an e-mail program, still profit by giving away copies with
unobtrusive advertising built in and selling versions that do not show
ads. And the open-source movement has produced gems like Linux, the free
operating system.
But the belief that advertising alone could finance more than a narrow
band of companies was shattered, Mr. Davidson said. And that's when
things became ugly. Companies scrambled to find ways to make up for the
money they thought they were going to earn from advertising.
Some programs in use today "went from just obnoxious advertising into
the hacking area," said Richard M. Smith, a software engineer and
privacy expert who has done some of the groundbreaking work that
uncovered the ways of rogue programs. On a recent weekend trip to visit
his daughter at Bard College, he spent much of his time fumigating her
computer, which she had loaded with file-sharing software. The various
programs, he said, had changed the security setting on his daughter's
machine, opening the door to other unwanted programs that were
downloaded automatically.
When he tried to use the Google search service to find Spybot, an
effective anti-spyware program, he discovered that one of the programs
had substituted a look-alike search page that did not include a link to
the program. "There seems to be this meeting of the hacker world and the
advertising world," he said. "There clearly is a line crossed that I
hadn't seen before."
OF course, someone is almost always making money somewhere. To download
free music, for example, you need to buy a computer and pay an Internet
service provider.
"There are costs built into every step of these media systems," said
Siva Vaidhyanathan, the director of communication studies in the
department of culture and communication at New York University. The
money just does not go to record companies and artists. "What's really
at stake here is who's going to get the money and in what-sized pieces,"
he said.
But the problems with spyware and other rogue programs may offer the
music industry a way out, one that doesn't risk alienating customers by
threatening lawsuits. To avoid messing up their computers and
surrendering their privacy, people may be more willing to pay for their
music - so long as it comes in a form they want and at a price they
don't mind paying.
"It's not rocket science, it's not new math, it's not 'new economy,' "
said Mike McGuire, director of media research at GartnerG2, the business
strategy research group of Gartner Inc.
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"If people want this thing, they will pay a reasonable price for it - if
it is reasonably priced and convenient, and it works when you hit 'play.' "
John Esposito, head of the music distribution arm of Time Warner
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noted that plenty of consumers routinely buy movies on demand through
cable systems or pay to download ring tones to their cellphones.
"Convenience of access will be the most important ingredient, and they
will be willing to pay for it," he said.
The idea of small payments appeals to people on all sides of the debate.
"Cheap is really the antidote to 'free with a lot of strings attached,'
" Mr. Davidson said.
Professor Zittrain agreed. "The difference between free and 5 cents can
be huge" to a business, he said.
Or 99 cents. The iTunes Music Store from Apple Computer
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is showing that small payment systems, which have not been very
successful in the past, can work if there is a large audience for a
compelling product, said Avivah Litan, an analyst at Gartner.
Steve Jobs, the Apple chairman, has said that his company does not make
much from the store, which has sold millions of songs. The real profit
is in selling its wildly successful portable music player, the iPod.
If that high-tech approach sounds like old-style marketing, like giving
away razors to sell the blades, that should come as no surprise. The
future can look a lot like the past, when Mr. Esposito, the Warner Music
executive, could buy singles for 49 cents each at his hometown record
store in Punxsutawney, Pa.
To Mr. McGuire, blending the past and the future to give music lovers
what they want might provide the best hope for the music industry,
helping it move beyond the lingering idea of music as a physical object
to be sold.
"What we're talking about is the 20th-century record business versus the
21st-century music industry," he said.
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