ClickZ: Lawsuit Filed Under Utah's Challenged Anti-Spyware Act

In what will likely turn out to be the real battle between big name sites in Utah and adware companies, Overstock.com took advantage of its home state's restrictive anti-spyware law to sue Massachusetts competitor SmartBargains.com. The Utah law has been widely criticized as being so broadly written that it could be applied against adware and even sites using cookies, making it a potential device by which Utah companies could try to gain advantage over competitors from out-of-state.

Overstock's suit also makes claims against SmartBargains.com for more general common law concerns, such as unfair competition. The new anti-spyware act has been put on ice by a state judge at the request of adware firm WhenU, pending a June hearing on its constitutionality.

The issue reveals not only controversy surrounding the fate of adware and spyware, but also the dependency of U.S. civil law on markets being essentially local affairs. States traditionally exerted sovereign control over their internal markets without much worry about the friction between their citizens and those from other states. The Internet has revealed that this aspect of federalism may soon be at an end, as even the smallest businesses online have national and international markets. The U.S. Constitution precludes the state regulation of interstate commerce, except in several traditional categories, although the Supreme Court has vacillated over the generations as to whether or not it enforced that "dormant Commerce Clause."