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

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

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
against Wall Street and the insurance industry.

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