160 PART TWO • American Business and Its Basis
the inherent value of their services. Is this
an accurate or fair picture of the medical
profession?
6. Is licensing an all-or-nothing issue? Or is
it possible that although only licensed
C ASE 4.2
An Internet Parasite
When you’re cruising the web, do those little
pop-up ads bother you? If so, one of the com-
panies you have to thank is Gator Corp., an
Internet advertising firm. It makes software
that monitors what you do online and then
displays those ads when you visit certain web-
sites. Gator has cut deals with various soft-
ware makers to have them include its
software on their programs. As a result, mil-
lions of computer owners have Gator’s soft-
ware on their PCs. Gator also gives away
software like “e-wallet,” which helps you fill
out forms on websites, but this free software
comes with Gator’s “adware” or “spyware”
built in.81
Gator sells those pop-up ads to advertisers
who want to reach people who visit certain
websites but without paying the fees that the
owners of those websites would charge. For
example, with Gator adware on their compu-
ters, people visiting the Hertz website may be
greeted by pop-up ads for rival car-rental com-
panies. In an ad campaign for an automaker,
Gator recently searched its database and
found 1.3 million computers whose users had
clicked through automotive websites to look
at certain types of vehicles. It then sent ads
to those computers, varying the message de-
pending on whether the pattern of web visits
suggested the person was close to making a
purchase or was looking at competitors’ cars.
Gator argues that its ads provide useful in-
formation for shoppers who want to compare
professionals should be permitted to perform
certain services, paraprofessionals and lay-
persons could perform less expensively but
equally competently other services now
monopolized by licensed professionals?
prices and products. It labels what it does “be-
havioral marketing.” Critics, however, call the
company a “parasite” because it siphons ad
money from websites that others have con-
structed. Not only does Gator need other peo-
ple’s websites to exist, but also its program
threatens the existence of those sites by taking
away some of the income they need to keep run-
ning. Critics accuse Gator of unfair competition,
and several large American publishing compa-
nies with websites have filed suit against Gator
to protect their online business interests. Ironi-
cally, one of the companies joining the lawsuit
is the New York Times, which once used Gator’s
services to sell subscriptions to people who vis-
ited the websites of its competitors.
Although his employer is one of the com-
panies suing Gator, Wall Street Journal colum-
nist Lee Gomes worries that the publishers’
lawsuit may impinge on your right to control
what you do with your computer and to use it
to interact with the Internet in the way you
choose. “The publishers,” he says, “seem to
be saying that you should look at their web-
sites only the way they say you should. They
say you can’t have someone else’s pop-up ad
on top of their sites.” If the publishers win,
he reasons, this will be another setback for
the concept of “fair use”—the idea that people
who use copyrighted material have certain
rights, too (for example, to record a copy-
righted television program for their own use
later).

Instead, Gomes thinks the publishers
should try persuasion instead of litigation,
free speech instead of legal coercion. In partic-
ular, the publishers claim that most Gator
users don’t realize that they have it on their
computers or, at least, don’t understand how
it tracks their web-surfing habits. Gator denies
this, but in any case the publishers could,
Gomes says, inform their website visitors
that there are programs like Ad-Aware that
allow PC owners to check whether their com-
puters have Gator or other sorts of adware on
them and then, if they want, to delete those
programs. The publishers could also point
out that Microsoft, Yahoo, and others provide
the software that Gator gives away, but with-
out any Gator-like tracking built in. This,
Gomes argues, is the right way to respond to
the challenge of Gator—by giving computer
users more choice, not less.
Fred von Lohman, spokesperson for the
online advocacy group Electronic Frontiers
Foundation, agrees. He supports Gator be-
cause, as he sees it, the issue is who controls
your computer. “Is it you, or is it the company
whose website you happen to be using?” Not
everyone is persuaded, however. They see
what Gator does as a clear violation of private
property rights. It’s analogous, they think, to
sticking your message on a roadside sign or a
billboard that someone else has paid for.
Update The publishers’ lawsuit against
Gator was settled out of court, although the
terms of the settlement weren’t disclosed to
the public. But whatever its terms are, the
settlement affects only the specific websites
that were party to the suit. Since then, how-
ever, Gator has been trying to present a more
respectable face to the world. It changed its
name to Claria Corporation and is suing any-
one who refers to its adware programs as
spyware. Claria has helped Yahoo to develop
CHAPTER FOUR • The Nature of Capitalism 161
new search vehicles, and Microsoft has con-
sidered taking over the company to utilize its
technology for tracking the movements of
people online as well as the consumer behav-
ior data that Claria has accumulated. Mean-
while, Claria is not the only company with
technology that messes with companies’ web-
sites. Google has added to its popular toolbar
a new feature that inserts links right into the
body of any web page. These links lead you
to Google’s own map site or to other sites
Google selects. For example, if you look up
a book on eCampus, a book-selling site, Goo-
gle’s “autolink” feature converts the ISBN
numbers on the page into a link to Amazon,
which wants you to buy the book from it
instead of eCampus.
Discussion Questions
1. Is Gator a threat to the business interests
of the publishers and other website own-
ers? If so, do they have a legitimate com-
plaint against Gator? Or is this a case of
big companies’ ganging up to thwart a
smaller business rival?
2. Is Gator guilty of unfair competition? Has
it violated the implicit rules of a free-
market, capitalistic system? Is it a parasite
that should be put out of business or a
legitimate business operation?
3. What, if anything, should the publishers do
about Gator? Is Gomes’s “free-speech”
strategy likely to work? How would you
deal with Gator if you owned a popular,
expensive-to-run website?
4. Does Gator’s software violate the right to
privacy of PC owners? Would outlawing
Gator-like adware be a setback for the
idea of “fair use”? Would it violate the
rights of PC owners?
5. Is your view of this case affected by
whether you personally find
pop-up ads annoying?