A direct marketer accused of secretly installing millions of pop-up ad programs in a lawsuit announced by New York Attorney General Eliot Spitzer yesterday called the suit a “baseless attempt to rewrite the rules of the adware business.”
According to Spitzer’s office, New York-based Direct Revenue LLC offered free computer applications, such as games, and failed to explain that spyware would accompany the download.
Spitzer’s office also claims that Direct Revenue committed so-called “drive-by downloads,” or installations that took place without any notice to consumers.
The resulting adware would then serve ads to consumers based on site they visited, according to the New York attorney general.
However, Direct Revenue said in a statement that the suit “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.”
New York-based Direct Revenue added that Spitzer’s office “knows that none of the challenged practices have been in use for at least six months and that this case will change nothing about our business model going forward.”
The company also claims its business model was consistent with the rest of adware industry at the time and was legal.
New York’s attorney general released what it says are quotes from Direct Revenue’s former CEO, Josh Abram, in 2005 in which Abram bragged to a distributor: “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 alleges that Direct Revenue frustrated consumers’ attempts to uninstall its spyware by making them go to a separate Web site and download special software.
Named in the suit are co-founders Abram, Alan Murray, Daniel Kaufman and Rodney Hook.
The suit—filed in New York County Supreme Court—seeks to force Direct Revenue to open its books and asks the court to “impose appropriate monetary penalties,” Spitzer’s office said in a statement.
Direct Revenue’s attorney, Andrew Celli, said in the company’s statement that Direct Revenue made a “good-faith” settlement offer to Spitzer’s office “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,” but that Spitzer office declined.
“Accordingly, we will defend our conduct vigorously and we are confident that the courts will bring clarity and a satisfactory conclusion to our case,” Celli said in the statement.
