The FTC filed an action against D Squared Solutions, run by college students Anish Dhingra and Jeffrey Davis, last November, over their exploitation of a feature of the Windows Messenger Service.
The Messenger Service allows network administrators to provide instant information to users of the network (distinct from the popular Instant Messaging services), but D Squared used the feature to send pop-up ads, as frequently as every 10 minutes, promoting $25 software to stop the bombardment.
In November, Howard Beales, Director of the FTC's Bureau of Consumer Protection, called the scheme, "nothing more than a high-tech version of a classic scam."
Beales continued: "The defendants created the problem that they proposed to solve – for a fee. Their pop-up spam wasted computer users' time and caused them needless frustration."
San Diego based D Squared has now agreed to stop sending the pop-up ads and to refrain from selling the ad-blocking software. D Squared cannot send any other type of ad unless it contains an opt-out mechanism.
In return, Dhingra and Davis do not have to admit to any wrongdoing, and will not be penalised, according to reports.
