Bonzi Settles Deceptive Ad Suit

Bonzi Software, a top Internet advertiser, agreed to settle a class-action lawsuit accusing the company of deceptive advertising, according to the plaintiff’s counsel.

The suit, filed in Washington state in November, accused Bonzi of engaging in a “diabolical scheme” that tricked Internet users into clicking through to Bonzi’s site by displaying online ads that mimicked dialog boxes with “message alert,” security alert,” or “warning” in the creative.

Darrell Scott, an attorney with Lukins & Annis, said the settlement would preclude Bonzi from deceiving consumers. The settlement calls for Bonzi to include the word “Advertisement” in the header of all online ads that look like computer system warnings and in the subsequent Web pages a user arrives after clicking such an ad.

Bonzi Software operates a Web site that functions as a portal and a promotional destination for its variety software products, including a voice e-mail program and BonziBUDDY, a purple gorilla that accompanies users around the Net and suggests sites to visit. According to Nielsen//NetRatings’ AdRelevance unit, Bonzi was the No. 6 software advertiser online in April, running 141.6 million impressions — more than twice the amount Microsoft ran.

Bonzi agreed to cease running ads that claim a computer user’s machine was “broadcasting” an IP address, as the company did in its ads for its virus software. The lawsuit held these ads fooled users into thinking their computer’s address was being sent around the Internet, instead of the simple process of IP addresses and Web sites responding to each other. The terms of the settlement require that the ads use the word “transmitting” and include the notation that they are ads.

Bonzi also agreed to stop using potentially misleading interfaces, such as “x” boxes that do not close an ad. Finally, Bonzi agreed to replace its “ok” button with a “more info” button.

“I am hopeful the Bonzi settlement creates some benchmarks by which some other Internet companies are measured,” said Scott.

Representatives for San Luis Obispo, Calif.-based Bonzi Software were unavailable for comment.

In the complaint, Scott asked for Bonzi to pay $500 for each Internet user who has encountered one of the ads and $5 per impression served. The plaintiff estimated Bonzi served up to 300 million impressions.

Bonzi will not make any financial payments under terms of the settlement, which was reached before the class was certified. The company will pay Lukins & Anis $170,000 in legal fees.

“The significant aspect is the class action practice is committed to investing in the area of Internet business activities over the next several years,” he said. “This litigation helps move forward a number of other cases we are pursuing or looking to pursue.”

Scott said the law firm’s Web site received 1.7 million visits in the days following the filing of the lawsuit in November and “thousands” of e-mails from potential class members.

Lukins & Annis is currently involved in another class action lawsuit over deceptive Internet advertising against eAcceleration Software. In that case, the firm accuses eAcceleration of deceiving Internet users into downloading software through its banner and pop-up advertisements. That case is pending.

Scott said the class action practice at Lukins & Annis is looking at a number of Internet-related business practices, including the misuse of private information.

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