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Messenger Ads Will Continue, For Now

A federal judge denied the Federal Trade Commission's request for an injunction against D Squared Solutions, a startup accused of spamming PC users with Messenger Service "pop-up" ads promoting its spam-blocker software.

While the FTC earlier called the San Diego, Calif.-based D Squared's actions nothing short of "extortion" -- and that its messages could even cause recipient computers to crash -- U.S. District Court Judge Andre Davis denied the injunction, saying the Commission lacked sufficient evidence that the activity injured consumers.

The case will go to trial March 8. Until then, D Squared is free to resume sending the ads, if it so chooses. The firm had been under a temporary injunction since early November.

D Squared, like the number of other firms distributing similar commercial messages, relies on a little-known feature in Microsoft Windows -- the rarely-used Messenger Service, which is not to be confused with the Redmond, Wash. software giant's Windows XP instant messaging client of the same name.

The service is intended to exchange "net send" and "Alerter" service messages between computers. Those can include updates from print jobs, a broadcast announcement by a system admin, or an alert following the activation of an uninterruptible power supply.

For that reason, the Messenger Service (which also hinges on Remote Procedure Call services, or RPC) has been enabled by default on Windows operating systems since the mid-1990s, and launches automatically when a user boots up his or her personal computer. In its default configuration, Microsoft Windows also opens the NetBIOS TCP ports necessary to receive messages.

However, in response to lingering privacy concerns and more recent security worries, several major ISPs, including America Online , have said they would block the service. Microsoft owned up to the problem in a recent critical alert and warned about the possibility of transmitting malicious code using the service. In October, the software giant said it would to turn off the services in Windows XP Service Pack 2, which is due in the first half of 2004.

But in more recent weeks, the FTC has begun putting a stop to the sending of commercial notices over Messenger Service on its own, targeting D Squared for its policy of using the messages to advertise its software -- which actually blocks those types of ads, as well as Web-based pop-ups.

"The defendants charge consumers between $25 and $30 for their Windows Messenger Service pop up-blocking software," the FTC said in its lawsuit. "In essence, defendants bombard an individual consumer with a stream of repeated, unwanted pop up spam in an attempt to induce the consumer to pay defendants to stop the bombardment."

The FTC alleges that D Squared has been improperly using the technology -- since it was originally intended for administrative messages -- and that it sends ads to some users as often as once every 10 minutes to 30 minutes. The Commission also alleged that the practice causes some computers to crash.

While Microsoft and other sources -- including the FTC -- post instructions on how to disable Messenger Service, the FTC also alleges that most ordinary, non-technical PC users still don't know how to deactivate it.

But D Squared's attorneys argue that this is precisely why the company's tactics are a beneficial service for the public.

"Obviously, if Microsoft released a 'Critical Warning,' and there are still people out there that haven't disabled it, then Microsoft hasn't been able to reach them," said attorney Anthony Dain last week. "So what's the best way to alert them? Pop it up on their screens through same channel to which they'd be vulnerable to malicious code."

Dain, a partner at San Diego-based Procopio, Cory, Hargreaves & Savitch, said that while he finds pop-up ads as annoying as everyone else, "our clients are in fact selling a pop-up blocker ... I liken it to the flu season. It's like saying flu shots are annoying, so it's better to leave them in blissful ignorance. [Microsoft warns] that there are people out there that have malicious code that could compromise systems. Instead of addressing that, the FTC says, 'Let's kill the messenger.'"

He added that users could block the Messenger pop-ups by themselves with ease.

"This annoyance is somehow equated by the FTC [to be] extortion," he said. "They so patronize the public and say they're so helpless, and this kind of message is completely beyond their ability to understand and address. You can do it. I can do it. If you don't like pop-ups, you can buy our software, or just get on your computer, surf the Web for 'pop-up stopper,' and you'll find probably hundreds of different sites that will help you to disable this system."

Naturally, the FTC sees it otherwise, pointing to reports that the messages D Squared has been sending cause PCs to crash.

"They've been barraging consumers with this pop-up advertising and causing computers to freeze and work to be lost," said FTC staff attorney Tara Flynn. "We don't agree that they're proving a customer service."

Meanwhile, Dain fired back at the assertion.

"They make those statements, but they had no foundation for making those," Dain said on Tuesday. "The judge acknowledged that computers crash all the time, and many things can cause them to crash ... all they had were complaints from a few people on the extremes claming their systems froze or crashed, they had no actual evidence that the messages caused it."

In addition to hosting a Web page giving instructions on how to disable the Messenger Service, the FTC is hoping to gather that evidence by encouraging consumers who have received D Squared's messages and suffered crashes or lost work to contact the Commission through its Web site.

Flynn said the FTC's site within the next day would make available a dedicated e-mail address for D Squared message recipients to contact the Commission.

Christopher Saunders is managing editor at InstantMessagingPlanet.com.



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