Spyware - Why isn't it illegal?

I was just thinking about this. How can somebody install software on your computer and not tell you about it? I mean I realize that some put it in their “read this and agree, or you can’t install” policy, but alot of software containing spyware doesn’t do this.

I also think that if a piece of software contains spyware, it should state exactly what it contains, what it is sending out, ect.