The settlement concludes a lengthy investigation into the company's collection and retention of information about its users' browsing habits.
Between 2000 and 2002, the SmartDownload feature had, in processing certain users' download requests, also saved several categories of data relating to each download – including the internet address, or URL, of each file that a user downloaded.
While SmartDownload was designed to make it easier for users to download large files, the capturing of this data made it a form of what is known as spyware, software that is used to collect information about an individual or organisation without their knowledge.
Spitzer argued that the retention of the information contradicted Netscape's representation to consumers that "none of this information is saved." Netscape has now undertaken to delete the data captured and undergo a series of privacy audits.
Spitzer has also confirmed that neither Netscape nor AOL had taken the further step of associating this profiling data with personally identifiable information, such as name and address. Just in case, the agreement provides that such data association will be prohibited unless consumers specifically give their consent.
The agreement also requires Netscape to delete all URLs and related data it has obtained through SmartDownload, to undergo a series of privacy audits, and to pay $100,000 to the State of New York.
Spitzer commented, "When companies misrepresent how data is collected or saved, we will hold these companies accountable."
The agreement does not contain any admission of liability on the part of Netscape or AOL. According to Reuters, an AOL spokesman confirmed that Netscape had voluntarily stopped using the tracking element of SmartDownload as soon as the first of several consumer class actions was filed against it.
"The version of software that was reviewed has not been distributed since the fall of 2000 to consumers, and did not adversely impact users," said the spokesman.