Turning for the first time to the courts to punish an Internet company for privacy breaches, consumers across the country have filed three class-action lawsuits--including two submitted Wednesday--against online audio and video software giant RealNetworks Inc.
The suits accuse Seattle-based RealNetworks of violating an array of privacy and fraud laws in the wake of the company's admission last week that it surreptitiously used its software to record data, including music preferences, from millions of Internet users.
Amid a fierce backlash, the company issued a software patch last week that it claims will prevent further data collection. But now consumers are seeking legal damages against the company, the first time an online privacy breach has triggered such legal strikes.
Legal experts said prospects for the suits are unclear because they hinge on laws not specifically designed for Internet privacy violations. But if the suits succeed, they could create a powerful weapon for Internet users in their ongoing tug-of-war with companies bent on stockpiling consumer information.
"These cases are an indication that consumers are going to get more aggressive about privacy on the Internet," said David Sobel, general counsel for the Electronic Privacy Information Center, a Washington-based advocacy group. "I think we're going to see a lot of lawsuits pursuing creative legal theories."
The suits filed Wednesday against RealNetworks were submitted in federal courts in Philadelphia and Chicago. Both allege that the company violated an assortment of federal laws, including computer fraud statutes and common-law privacy protections.
The suits follow a class action filed in Orange County Superior Court in Santa Ana last week that seeks up to $500 million in damages, or about $500 per RealNetworks user in California. That suit accuses RealNetworks only of violating California privacy laws.
Founded by Rob Glaser, a former top Microsoft Corp. executive, RealNetworks is best known as the maker of such music and video "streaming" software as RealPlayer and RealJukebox. Company executives did not return two phone calls to the company's public relations office Wednesday afternoon.
If the lawsuits succeed, RealNetworks could be forced to pay millions of dollars in damages, mainly because so many consumers are potential victims of the privacy breach. But the cases hinge on several untested legal arguments.
