In a prior post we noted a subtle but potentially far-reaching development in how federal prosecutors interpret the Electronic Communications Privacy Act. In that post we discussed the prosecution of Hammad Akbar for selling a software application that could be used to record file, text, or voice records on a mobile phone. The prosecution’s claim was that the software Akbar advertised and sold was a “device” under the Act. Previously, only physical devices (tape recorders, for instance) had been considered within the scope of the Act.
Of key importance to us in the case was the fact that one had to have total control of the phone in order to install the software app, meaning that the app was likely only installed by people who had a claim to owning or controlling the phone. The app was marketed as a way to spy on a cheating spouse.
This prosecution—and the novel interpretation of the Act it implies—caught our attention because if software is a “device” that can violate the wiretap laws, it is possible that cookies or similar common software installed quietly by third parties might also be interpreted to implicate the Act. In our mind, the software industry should be deeply disturbed by this new development. But, of course, it was always possible that the prosecutors would be rebuffed by the courts charged with interpreting the Act.
Case Against Small Player Will Allow Prosecutors to Bootstrap Precedent. Since the time of our prior post, the second shoe has dropped in the Akbar case. There will be no judge or jury to question this novel prosecution, and a clear precedent has been set.
On Tuesday, November 25, 2014, Mr. Akbar pled guilty to a violation of the Act, specifically to selling an interception device in violation of 18 § U.S.C. 2512(1)(b) and advertising an interception device in violation of 18 § U.S.C. 2512(1)(c). Despite facing up to ten years of incarceration for those offenses, Akbar was sentenced to time served—a mere ten days—and was ordered to pay the maximum statutory fine of $500,000.
Filings Confirm Novel Nature of the Prosecution. The filings provided to the Court in advance of sentencing confirmed the novel nature of this prosecution. In a pre-sentencing memorandum, Akbar stated that in 2013 he “engaged a partner at a prominent United States law firm” to obtain an opinion on the legality of his software application. Dkt. 32 at 11. The prosecution accepted that statement and repeated it in its Stipulation of Facts. Dkt. 36 at 3.
Tellingly, Akbar’s counsel advised that he was “not aware of any U.S. statute or FTC or court decision that holds mobile phone tracking software is per se illegal.” Id. at 11-12. Clearly, then, not even experienced counsel anticipated that the Government would characterize a software application as a “device” falling within the Act’s prohibitions. Akbar’s filing concluded by noting that he is “the first person to be convicted of violating § 2512 in connection with the sale of a software application for smartphone devices.” Id. at 28.
Prosecutors Will Decide When Software Constitutes a Crime. The first of its kind, this prosecution has ushered in a new era of prosecutions against software manufacturers under the Act. The two counts to which Akbar pled guilty specifically applied to the sale and advertisement of “devices,” and the Department of Justice public statement has made clear that Akbar’s plea will serve as precedent for prosecutors who conclude that software of one sort or another violates an expectation of privacy in contravention of the Act.
The problem with this development is that the Act, which was passed in 1986 and long before software applications like Akbar’s StealthGenie could have even been fathomed, is vague. As a consequence, potential targets like Mr. Akbar have no clear statutory guidance about when their business activities may violate the Act. Thus software companies will face a new and surprisingly complicated risk—one that attaches criminal sanctions.