You've got mail (and AOL can read it).

• Author: Swartz, Nikki
• Position: Up front: news, trends & analysis

In an online eavesdropping case with profound implications for electronic communications, a federal appeals court ruled that a company that provides e-mail service can copy and read its subscribers' messages.

The ruling stems from a now-defunct online literary clearinghouse, Interloc Inc., which made copies of clients' e-mails in 1998 so it could peruse messages sent to them from rival Amazon.com. An Interloc executive was subsequently indicted on an illegal wiretapping charge.

In a 2-to-1 decision, the Boston-based appeals court upheld a federal judge's dismissal last year of a wiretapping charge against Branford C. Councilman, former Interloc vice president. According to the indictment, Councilman directed employees to write computer code to intercept and copy all incoming e-mails from Amazon.com to Interloc's subscribers, who were dealers seeking buyers for rare and out-of-print books. The government alleged Interloc tried to develop a list of books, learn about competitors, and attain a commercial advantage. Councilman argued that no violation of the Wiretap Act had occurred because the e-mails were copied while in electronic storage (the messages were in the process of being routed through a network of servers to recipients). The wiretapping law protects eavesdropping on any "wire, oral, or electronic communication" that is not stored--such as an unrecorded phone conversation--but does not afford the same legal protections to stored messages. The wiretap law makes it a crime to intercept messages, but the court ruled that it did not apply because there had been no actual interception.

The court ruled that because e-mail is stored, even momentarily, in computers before being routed to recipients, it is not subject to laws that apply to eavesdropping of telephone calls, which are continuously in transit. As a result, the court majority agreed that companies or employers who own the computers are flee to intercept messages before they are received by customers.

Privacy advocates, however, say e-mail should enjoy the same protections as telephone conversations or letters sorted by mail carriers and fear that the ruling could expand e-mail monitoring by businesses and the government. An advocacy group said the decision opens the door to further interpretations of the federal Wiretap Act that could erode personal privacy rights and put all electronic communications in jeopardy.

The New York Times said the court's "analysis was predicated on...