The heyday surrounding Carrier IQ broke in November when one researcher went on a tirade letting everyone in the world know they were being watched. Because people get into enough trouble on their own with smartphones, the possibility of secret spies tracking text messages and emails not only felt very Big Brother, but also posed greater threat for expose. While the company denied a majority of claims, it got hit with several major lawsuits, and in a new bill announced this week, deemed the Mobile Device Privacy Act, the government has taken further action.

Uncovering the Mole

Carrier IQ began and will likely end in controversy. The company, which is privately owned and deployed in over 150 million devices worldwide, created software or “spyware,” installed on mobile phones, which monitors and logs user activity. It professes to be a way of aggregating and analyzing data for wireless carriers, so businesses can examine customer experience and improve their services. Nevertheless, upon further investigation, researcher Trevor Eckhart uncovered the software was additionally keeping keystroke logs without allowing users to opt-out, in violation of federal law.

The Mobile Device Privacy Act, if passed, will require wireless operators and their partners to notify subscribers if they use such software, and request their express consent before collecting and transmitting information. This, of course, means Carrier IQ is probably going out of business.

Carrier IQ's Side

Not surprisingly, Carrier IQ vehemently denies the notion it is in the wrong, calling allegations of keystroke collection and/or other content surveillance “erroneous.” It believes its program is beneficial to society, as it improves phone efficiency for consumers. It was already dumped by Apple in December however, and with Congressional legislation looming, it surely is a sign of the end.

The new bill also puts reins on third parties receiving the personal information, requiring them to have a protective system in place and submit agreements with the FTC and FCC. It’s aimed at manufacturers, service providers, phone operating systems and app developers, covering anyone “who operates a website or other online service from which a consumer downloads monitoring software for installation on a mobile telephone.” The punishers will be known as the “enforcement regime.”

In a press statement, Rep. Markey noted,

Consumers have the right to know and to say no to the presence of software on their mobile devices that can collect and transmit their personal and sensitive information. Today I am releasing draft legislation to provide greater transparency into the transmission of consumers’ personal information and empower consumers to say no to such transmission.”

Now if only users could get some protection against their own missteps.