AOL Faces Class Action Lawsuit

In a development that could lead to a big shakeup in America Online‘s pop-up advertising model,
Miami-Dade County Circuit Court Judge Fredericka Smith has said that all
hourly subscribers to AOL should be considered plaintiffs
in a lawsuit filed over its pop-up ads.

At the same time, Smith denied AOL’s motion to dismiss the breach of
contract case, which revolves around the pop-up advertisements that AOL
subscribers are required to view or dismiss before they can continue their
use of the service. The plaintiffs — Hampton Booker and Arthur Sweeney —
say AOL has breached its contract with them by requiring them to view these
ads during the time that they have paid to use AOL services.

“When they bombard you with these pop-up ads, what they’re doing is blocking
you from having access, and they’re still charging you,” said Honey Kober, a
plantiff’s attorney in the case.

“So they’re, in effect, depriving you of precisely that which you’d paid
for, and what you’ve contracted for.”

The lawsuit aims to get AOL to compensate these hourly subscribers — who
pay a flat fee for a certain number of hours of AOL service — for the time
they have been deprived by viewing these ads. The plaintiffs’ attorneys
estimate that the number of people who have allegedly been deprived stands
at about 2.5 million. No dollar amount of damages was mentioned in the suit.

“The Court concludes that resolving the issues raised by plaintiffs’ action
through a single class action is superior to resolving those same issues in
millions (or even hundreds or thousands) of individual small claims
lawsuits,” wrote Judge Smith in her order.

If successful, the suit could force AOL to change the way it displays ads
before its hourly users, which may make advertising on AOL less attractive.
America Online representatives hadn’t returned phone inquiries about the
suit by the time of publication.

“We think one of the main reasons AOL has so much advertising revenue, is
that they have this captive audience,” said Andrew Tramont, another of the
attorneys for the plaintiffs.

“AOL takes the position that people want these advertisements. But we just
don’t think that’s true.”

America Online had sought to have the case dismissed, arguing that the
Miami-Dade county court was an improper venue for such a suit. The judge
disagreed with the company’s argument.

AOL is expected to appeal the judge’s decision.

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