Spitzer Sues Major ‘Spyware’ Internet Company Over Pop-Up Ads

By | April 5, 2006

New York Attorney General Eliot Spitzer on Tuesday accused a major Internet pop-up advertising company of secretly installing spyware and sending ads through spyware already installed on personal computers.

Spitzer sought a court order in state Supreme Court to stop Direct Revenue from allegedly installing millions of pop-up ad programs that he said also monitors the Internet activity of users.

“These applications are deceptive and unfair to consumers, bad for businesses that rely on efficient networks to do their jobs, and bad for online retailers that need consumers to trust and enjoy their online experience,” Spitzer said. “We will continue to side with consumers in their fight for control of their desktops.”

Spitzer has taken legal action against other companies he said installs spyware and adware – software that can be downloaded onto personal computers without the computer user’s knowledge after they are attracted to Web sites or other actions.

Spitzer claims Direct Revenue or its distributors offered free games, browsers or software it but never mentioned the spyware that was attached in the downloads.

Spitzer called them “drive-by downloads” and said his investigators documented 21 Web sites that included Direct Revenue downloads called VX2, Aurora and OfferOptimizer. After the download, Spitzer said the company can track consumers’ Web activity and deliver pop-up ads.

Spitzer said the company also thwarted consumers’ attempts to remove the spyware, which sometimes reinstalled itself. Spitzer accuses the company in a civil suit under state business laws against deceptive business practices and false advertising.

A spokesman for the company didn’t immediately respond to a request for comment.

Spyware and adware often land on computers, hitching a ride during visits to porn and gambling sites or in downloads of free games and screensavers. Often, the payload arrives with downloads of cartoon-character softwares aimed at children.

Infected computers can become filled with pop-up ads and users can find the unwanted programs difficult to remove.

In October, the former chief executive of Los Angeles-based Intermix Media Inc. agreed to pay $750,000 in penalties after Spitzer accused the company of secretly installing adware and spyware on millions of home computers. Spitzer accused the former executive, Brad Greenspan, of directing employees to bundle adware with other free programs and to make the software difficult to remove.

Spitzer said Intermix also agreed to pay $7.5 million in penalties over three years and stop distributing adware programs. Intermix ran Web sites featuring quizzes, games and jokes that it packaged for advertisers.

Spitzer’s lawsuit filed in Manhattan also names Direct Revenue’s former CEO, Josh Abram. Spitzer said Abram told a distributor in an e-mail that “we have a very stealthy version of our adware product which we ‘re happy to give u . . . Don’t worry. If we do a deal * a build together * these will not be caught.”

In another part of an e-mail released by Spitzer, the company’s chief technology officer allegedly stated that users “don’t know how they got our software (this is both upgrade and recent install…” and that users “say that they are getting so many ads that it is annoying them.”

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