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Here's a partial answer, beginning with a question. How do you outlaw it?
Definition:
What is it?
In simple terms, spyware gathers information about your computer, yourself, your web browsing habits, etc. and does something with it. Legitimate programs do this as well, and we -- in some instances -- want them to. So, you can't blanket outlaw what they do without outlawing a whole class of software that we want work. For example, if spyware were outlawed on this basis, AOL wouldn't be legal anymore. (I'm not sure that's entirely a bad thing, but many would disagree. :-))
Execution:
How do we get spyware?
Most spyware gets installed on your computer with your consent, whether you realize it or not. You click a link, without knowing what that link does, and it installs a program for you. You asked that software to be installed by clicking the link. One could require a thorough explanation of what each link on a web page does, which would pretty much destroy web browsing as we know it.
Another avenue for spyware involves downloading and installing so-called "free" programs. The installer for these programs comes packaged with spyware. When you execute the installer, you are giving it permission to install everything that comes with it. Certain restrictions on this practice could curtail spyware, such as requiring a full disclosure of what the package installs in the EULA. Unfortunately, most people never bother to read the EULA, so this would be all for naught. In fact, many reputable companies are in fact including such disclosure, but spyware still abounds.
Enforcement:
How do you enforce a ban on spyware?
Tracing the source of certain kinds of spyware is difficult. Combined with the previously mentioned problems of definition and execution, enforcement of a ban would be next to impossible. At the very least, it would require resources that would better be spent on many other things.
As I said, this is an incomplete answer.
Here's a brief story. Spyware is a running concern for many of the people with whom I do business. I give them advice on how to combat it and offer them free tools to do so. Much to my horror, I recently discovered that a CD my company offers our customers that includes anti-spyware and anti-virus programs comes packaged with, guess what, spyware. The anti-spyware tool in this package conveniently does not detect this particular brand of spyware. (The spyware was Broadjump, FWIW, which comes pre-installed on many PCs and is offered as a part of many broadband ISPs connection packages.) I've since stopped offering this except to those who explicitly ask for it. Unfortunately, when I tell them what it does, they rarely refuse to use it because they want its other features.
This should not be construed in any way as a defense of spyware. I hate it myself, but annoyances such as this are the price we pay for some of the things we do want. One can control spyware. The best method of doing so would be for everyone to refuse to purchase anything from a company that had advertised itself in this manner. But, people do not refuse to do that, so it remains and will as long as that is the case.
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