Direct Revenue has settled a federal lawsuit brought by an Illinois resident last March over the company’s now-disavowed practices as a distributor of pop-up ads.
Terms of the settlement, which an Illinois federal court will review on April 24, include continuing some practices the company has instituted as it tries to reform its behavior as a former adware vendor. It also calls for instituting other new practices and makes Direct Revenue liable for $300,000 in attorney’s fees and court costs.
In March 2005, Stephen Sotelo filed suit in state court against Direct Revenue, which operates the Best Offers Network and Soho Digital. The suit alleged that the company deceptively bundled free software applications Sotelo downloaded with adware that tracked his movements around the Web and served targeted pop-up ads. Sotelo’s suit, moved to a federal court in August, charged that such concealed downloads amounted to trespass on his property.
Under the terms of the proposed settlement, Direct Revenue will continue procedures it set up since the filing, including obtaining explicit consent before loading software, not collecting personally identifiable information about users, easing software uninstalls, and not distributing software on sites aimed at children.
In addition, Direct Revenue has said it will set up a tool-free number to aid Illinois residents with both recorded and live uninstallation information and labeling its ads “advertisements” rather than “offers”.
Like other former adware servers such as Claria Corp., Direct Revenue has recast its business model following a widespread user backlash against pop-ups and adware. In November, the company announced it would build a behavioral advertising network that would comply with the disclosure and privacy guidelines laid down by TRUSTe. The network will use behavioral data to place ads on Web pages rather than directly onto users’ browsers.
“We are pleased with this settlement,” said Neal Klausner, partner at the law firm Davis & Gilbert, representing Direct Revenue. “We believe it is fair and reasonable for all parties. The settlement embraces the basic tenets of Direct Revenue’s current consumer policies.”
