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Spyware is a controversial software technology that allows the surreptitious collection of personal information from computers linked to the internet. The purpose of this study was to determine the prevalence of spyware in internet shareware and freeware and to investigate the personal information collected.

The methodology was a two‐phase, multi‐case study. The first phase determined that five of the 50 most popular pieces of Windows^®‐based freeware and shareware available to internet users from CNETDownload.com were suspected of containing spyware: these were included as data sources for phase two. The purpose of phase two was to confirm the existence of spyware and to identify the types and frequencies of any personal data transmissions. For this phase, data were collected and analyzed utilizing a passive network monitor program to examine packets of data transmitted from a personal computer to external destinations on the internet.

The findings confirmed the existence and use of spyware in three of five suspected cases. However, the data indicated that there was a low occurrence of spyware and that these programs have the capability to collect numerous types of personal data. The main limitation is that these results are based on a snapshot of data obtained during five days.

The study has practical implications for internet users, who should be aware that spyware exists and understand its potential threat. Spyware developers should provide the user with an effective removal tool. Finally, marketers are cautioned that spyware might alienate customers.

This paper confirms the potential for misuse of these programs.