Apple named in lawsuit over Carrier IQ 'spy-phone' software

Three cell phone providers and four cell phone manufacturers have been named in a class-action lawsuit related to hidden software included on smartphones, which allegedly logs and may transmit users' personal information.

The lawsuit was filed last Friday in the U.S. District Court for the District of Delaware by the law firm of Sianni & Straite. The complaint asserts that T-Mobile, Sprint, AT&T, HTC, Motorola, Apple and Samsung violated the Federal Wiretap Act, the Stored Electronic Communications Act, and the Federal Computer Fraud and Abuse Act by hiding “spyware” on smartphones.

"The reason for the lawsuit is that, if the media reports about the Carrier IQ software are accurate, consumers are subject to having their personal information recorded or transmitted without their knowledge or consent," Ralph N. Sianni told Raw Story in an email.

"As stated in the Complaint, our clients are seeking damages that are permitted by statute, in an amount to be determined by the Court, and are also asking the Court to restrain cell phone carriers from installing of this type of software on mobile phones."

Called “Carrier IQ,” the software is supposedly meant to help mobile carriers monitor and diagnose problems with their devices. The company that makes the software insists it does not log keystrokes, but 25-year-old Trevor Eckhart seems to have proved that claim quite wrong.

Not only did he demonstrate the software capturing his keystrokes from a text message, it was being recorded even before the message he typed was displayed. Eckhart also demonstrated how the software can read Internet searches over secure connections, meaning that not even encrypted communications are completely private on some smartphones.

The software, which is installed on 150 million mobile devices, also allegedly tracks the location of the customer using the smartphone.

Carrier IQ has insisted the software does not record keystrokes or inspect the content of communications, and is merely a diagnostic tool.

“Our software is designed to help mobile network providers diagnose critical issues that lead to problems such as dropped calls and battery drain,” they claimed.

But the software quickly became a scandal. Wired magazine called Carrier IQ one of the top reasons to “wear tinfoil hats” this holiday season. Sen. Al Franken later demanded that the company explain its software and warned it may have violated federal laws. Rep. Edward Markey also sent a letter to the Federal Trade Commission chairman saying an investigation into Carrier IQ was warranted.

Apple said it recently stopped supporting the software and planned to completely remove it in a future update.

“We stopped supporting Carrier IQ with iOS 5 in most of our products and will remove it completely in a future software update," the company said in a statement.

"With any diagnostic data sent to Apple, customers must actively opt-in to share this information, and if they do, the data is sent in an anonymous and encrypted form and does not include any personal information. We never recorded keystrokes, messages or any other personal information for diagnostic data and have no plans to ever do so.”

The legal complaint is available here.

With reporting by Stephen C. Webster