The ongoing controversy over Carrier IQ’s hidden software has taken an unsurprising turn as class action lawsuits were filed yesterday against Carrier IQ, along with handset makers Samsung and HTC.

The lawsuit claims that the companies violated federal wiretapping laws by including Carrier IQ’s software in their phones. On Monday Android app developer Trevor Eckhart posted a YouTube video in which he demonstrated that the software records an alarming amount of information about the users of phones on which it is installed. The app tracks users’ location, as well as intercepting web traffic and SMS messages, and logging keystrokes.

The controversy has also drawn the attention of Senator Al Franken, who sent Carrier IQ a letter in which he asked the company about its data collection practices and some of the seemingly contradictory statements the company has made.

In response to an initial posting by Eckhart calling Carrier IQ a rootkit, the company sent a cease-and-desist letter in which they threatened legal action. When the EFF took up Eckhart’s case, however, Carrier IQ withdrew the threat and apologized. They also posted a statement on the company website claiming that the software was nothing more than a diagnostic tool employed by carriers to gauge the performance of their devices. In turn, Eckhart posted his video demonstration, which caused enormous controversy as more and more phones were found to have some version of the Carrier IQ software installed.

In the U.S. carriers have been somewhat slow to respond to the scandal. Sprint, AT&T, and T-Mobile have issued statements saying that they use the software only for network and device diagnostics, and nothing else. Meanwhile Verizon and UK carriers Vodafone and O2, as well as handset manufactuerers Nokia and RIM, have denied that the software is installed on their devices at all.

In many respects Apple has come through this scandal relatively clean. Although the software is present on iOS devices, it appears to only be active when the device is in diagnostic mode. Moreover, Apple issued a statement yesterday that they stopped supporting Carrier IQ with iOS 5, and that a future software update will remove it completely from all iOS devices. Apple’s statement also asserts that the data collected by the software is encrypted and sent anonymously.

For Android users who want to know if they have Carrier IQ installed, app developer François Simond has developed an app to detect the software. For iPhone users the process is somewhat more simple, as a simple settings change allows users to disable the collection of diagnostic data. From the Settings App, tap General, then About, then Diagnostics & Usage.

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