Travel Companies, Cingular Settle Adware Case

UPDATED: Three online advertisers have to pony up $100,000 and promise to stop using controversial adware as part of a settlement with New York State’s Attorney General.

Priceline , Travelocity, and Cingular Wireless
(now part of AT&T ) agreed to pay $35,000, $30,000, and
$35,000 respectively, Andrew Cuomo, the state’s top law enforcement
official, said in a statement.

The companies also agreed to follow the AG office’s requirements for
adware, software downloaded by computer users that displays advertising.

Among the requirements: providing full disclosure of the adware when
downloaded, obtaining consumer consent and offering practical ways to
remove the ads.

The companies must also stop using any adware companies that
violate the policy and ensure they learn how online ads will be
delivered in the future.

“Advertisers can no longer insulate themselves from liability by
turning a blind eye to how their advertisements are delivered,” Cuomo
said.

The settlement is an outgrowth of the office’s Internet Bureau
investigation of Direct Revenue, a New York City-based adware
provider sued last year by former New York Attorney General (and now New York’s Governor) Eliot Spitzer.

The Spitzer lawsuit claimed Direct Revenue used spyware to deliver
ads, a charge the company called baseless.

Although Direct Revenue did not respond to questions, the three
companies named in the settlement say they stopped using the adware
provider soon after the lawsuit.

Cingular said it stopped using adware after finding out that Direct
Revenue wasn’t upholding its pledge to gain consumer consent, spokesman Mark Siegal told internetnews.com. “We couldn’t agree more with the Attorney General. Control needs to be in the hands of consumers.”

On its site, Direct
Revenue provides computer users instructions on how to remove the
adware.

Travel site Priceline.com stopped using adware in February 2006 and
shifted its online advertising budget to e-mail and search engines,
spokesperson Brian Ek said. Travelocity said it terminated its relationship with Direct
Revenue in early 2006.

Ari Schwartz, deputy director of the Center for Democracy and Technology, a Washington, DC-
based consumer advocacy group, said in a statement: “The dirty secret about unwanted adware is that many legitimate companies — knowingly or not — fund its proliferation with their
advertising dollars.”

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