RealTime IT News

Spitzer Files Spyware Suit

New York Attorney General Eliot Spitzer is suing an Internet advertising firm he claims surreptitiously installed millions of pop-up ad producing programs on individuals' computers.

The suit seeks a court order preventing New York City-based Direct Revenue from secretly installing spyware or sending ads through spyware that has already been installed on computers. It also asks the court to impose monetary penalties and force the company to provide an accounting of its revenues.

Direct Revenue's executives called the lawsuit an attack on the company's "past practices of distributing its advertising software."

"This lawsuit is a baseless attempt by the Office of the Attorney General to rewrite the rules of the adware business," according to a statement posted on the Direct Revenue Web site. "It focuses exclusively on the company's past practices - practices we and other industry leaders changed long ago - and says not a word about what we're doing today."

Spitzer's lawsuit claims that Direct Revenue advertised free applications such as games or browser "enhancement" software but did not inform consumers that spyware would accompany the applications.

Once consumers downloaded the applications, surreptitious code placed on their computers caused Direct Revenue's own servers to install its spyware, without notice to consumers. Among the names of the programs that Direct Revenue bundled with its applications are "VX2," "Aurora" and "OfferOptimizer," each of which tracks consumers' Web behavior and then delivers sequential pop-up ads to them.

"Surreptitiously installed spyware and adware harm consumers and businesses, and my office will continue to prosecute these practices aggressively," said Spitzer, whose office last year filed a suit against adware distributor Intermix Media, which resulted in a $7.5 million settlement.

An email from Direct Revenue's former CEO Josh Abram (a defendant in the lawsuit) was included in the press information provided by Spitzer's office. In the e-mail, dated April 2005 and apparently sent to a distributor, Abram boasted, "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."

The suit also charges that Direct Revenue's chief technology officer observed in 2005 that users "don't know how they got our software" and that users "say that they are getting so many ads that it is annoying them."

The lawsuit further alleges that Direct Revenue "knowingly frustrated" consumers' attempts to remove the downloaded software by requiring consumers intent on accomplishing removal to go to a separate Web site (mypctuneup.com), turn off their firewalls and download additional "uninstall" software.

"The practice of forcing consumers into downloading software they neither want nor need has threatened the essential trust that lies at the heart of Internet communication. Aggressive law enforcement is an essential component in the ongoing fight to stem the tide of unwanted spyware," said Ari Schwartz, Deputy Director of the Center for Democracy and Technology.

Direct Revenue's attorney, Andrew G. Celli, Jr. said in a statement that the company had attempted to settle the matter with the attorney general.

"We offered the Office of the Attorney General a resolution of this matter which would provide a blueprint for other adware companies to comply with the Attorney General's view of the law and afford the broadest possible protection to consumers," Celli said. "The Office of the Attorney General refused. Accordingly, we will defend our conduct vigorously and we are confident that the courts will bring clarity and a satisfactory conclusion to our case."

Spitzer, who is running for Governor of New York, launched his campaign against spyware in 2005. His office has also pursued spammers, most notably Monsterhut and OptInRealBig.com, owned by infamous spammer Scott Richter.

Spitzer is perhaps best known for his high-profile crusades against Wall Street and the insurance industry.