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AMERICAN MORNING

Microsoft Security Suit

Aired November 6, 2003 - 09:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BILL HEMMER, CNN ANCHOR: Microsoft is putting $5 million in reward money to catch hackers who write viruses. But if your identity is stolen through holes in the Microsoft security system, who's to blame? Marcy Levin Hamilton is suing the company. She says she's been living through a nightmare since her Social Security number was stolen by hackers. Marcy Hamilton, and her attorney Dana Harbor now in our L.A. bureau to talk about this.
Good morning to both of you.

Miss Hamilton, how much damage was done to you?

MARCY HAMILTON, SUING MICROSOFT FOR SECURITY BREACH: Well, it's -- it's never ending, actually. It started sometime in July. I went to a grocery store, a market to buy groceries for my family, and I gave them a debit card, and the cashier snickered and said, I'm sorry, there's no money in this account. So I went to call my bank, and I said, my money is not there? And they said, you've withdrawn all your money. And from then on, it's been a nightmare. They didn't believe me at first, and said, well, we'll investigate. It's four months later. They're still investigating. I've been to the credit reporting agencies, and they put a block on your account for six months.

But, after that time, I have no idea, you know, what will happen, what wolves will be coming in and trying to steal more money, and it's just been a nightmare.

HEMMER: So now you've brought this suit in. And for the sake of our viewers, you allege three things in this suit, and I'll read them off, first, Microsoft is a monopoly, PC users have no choice but to use their operating system. Second the fine print on the terms of use document says that if there is no warranty, consumers have no resource if there is a flaw in that software. Also, third, and finally, Microsoft does not have a good system to notify users of possible flaws, and that actually helps the hackers. What do you want this suit to accomplish, though, Miss Hamilton?

HAMILTON: Well, actually, I'll refer to Dana about that. All I can say is that you know, every person is born with a good name, and when that name is compromised and violated, it's a very primal wound. And you know, it's hard to go -- I never know when I go to a store if they're going to accept my check or not. My whole life is compromised in that way.

HEMMER: I'm going to get to your lawyer in a second here. But let me read a statement from Microsoft, and I'll get Dana to respond here. Microsoft says to CNN -- and I'm quoting now -- "Microsoft has made security a top priority. It's committed to developing the most secure software possible, and making it easier for customers to protect themselves against attacks launched by malicious lawbreaks." That's the statement in November of this year.

To Mr. Taschner, Microsoft says it's criminals doing this, they can't stop it anyway. What do you say to that?

DANA TASCHNER, ATTORNEY SUING MICROSOFT: Well, I think the activity of the last 24 hours would suggest otherwise. Microsoft, we believe, has a responsibility to make a safe product, and to police to the extent they can to make sure the product is not being violated or compromised, and we've seen this international posse go out now to effect a safer product.

I just heard you read the statement where they're stating they're committed to making the safest product. They've actually advertised, saying that they have the most reliable product on the market. And consumers have come to believe that statement in purchasing and using that product, that one of the primary efforts of our lawsuit is to have a paradigm shift in Microsoft's orientation to the consumer, to let them know that the information that is on their computer may not be secure. People need to be cautioned about that, and that's a primary focus of our lawsuit, so people like Marcy Hamilton will recognize that the data on their computer may not be secure.

HEMMER: Thank you. From L.A., Dana Tascher, Marcy Hamilton. Thanks for sharing your story with us today.

Turning our attention now for more on this lawsuit and Microsoft's reward offer that was announced yesterday, from Palo Alto, California, Jennifer Granick of Stanford University Law School here to talk about it.

Good morning to you, Jennifer.

JENNIFER GRANICK, STANFORD UNIV. LAW SCHOOL: Good morning.

HEMMER: Does this suit stand a chance, Mrs. Granick?

GRANICK: Well, there's a chance, but they have a lot of obstacles to overcome. One of the more serious obstacle obstacles is the terms of service. And when people purchase software, there's a license agreement that goes along with it, and that agreement limits the kinds of lawsuits that people can bring against Microsoft for software, for problems with the software.

HEMMER: So is this something that you see in court, or is this something you see settled before it even gets there, or is it dropped completely?

GRANICK: Well, I think some of these issues are going to be determined in pretrial motions, certainly. And I don't know whether the case will make it to trial. But it does have these important legal hurdles. HEMMER: I want you to pick up, if you could, then on the story that broke yesterday, a $5 million reward out there if you turn information in on people who might be trying to hack the Microsoft system. Do you see it more than P.R.?

GRANICK: Well, I think that there's a problem with those kinds of efforts, which is that, it's not going to be a real deterrent or dissuasion to a lot of people out there who have a criminal intent. And I can tell you from years of experience in the system, most people with criminal intent are starting from the premise that they're not going to get caught. And I don't know that having a bounty is going to really change that perception on people's part.

HEMMER: One final thought here, Mrs. Granick. Have you heard the claim from Microsoft that it can't stop the criminals they're going to do damage no matter what firewall they establish. Is there an argument for that?

GRANICK: Well, I think it's a little bit like a situation, where in other areas of the law where you have something like a parking garage in which somebody gets mugged. And on one part it's the mugger's fault for having done it, but there are also claims that you can bring sometimes against the parking garage for not having there be lights, or safe stairwells or security guards or that kind of thing. So responsibility is definitely shared here.

HEMMER: Thanks. Jennifer Granick from Palo Alto, California. Appreciate it.

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