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Eliot Spitzer sues over spyware

New York Attorney General Eliot Spitzer yesterday filed a lawsuit against internet marketing firm Direct Revenue, alleging that the company surreptitiously installed millions of pop-up ad programs on consumers' computers.05 Apr 2006

Advert: Infosecurity Europe, 25-27 April 2006, Olympia, LondonThe suit against Direct Revenue, filed with the Supreme Court for the State of New York, seeks an order prohibiting the firm from secretly installing spyware or sending ads through already-installed spyware. The suit also asks the court to compel the company to provide an accounting of its revenues and to impose appropriate monetary penalties.

"Surreptitiously installed spyware and adware harm consumers and businesses, and my office will continue to prosecute these practices aggressively," said Spitzer. "These applications are deceptive and unfair to consumers, bad for businesses that rely on efficient networks to do their jobs, and bad for online retailers that need consumers to trust and enjoy their online experience."

The suit is the latest in a series of spyware related actions filed by Spitzer, who last year settled a suit against adware distributor Intermix Media for the sum of $7.5 million.

Spitzer says that the current action follows an extensive investigation in which the Attorney General's office documented Direct Revenue's practice of installing advertising software on computers without proper notice.

In many cases, the suit alleges, these spyware installations were instigated when Direct Revenue (or one of its distributors) advertised ‘free’ applications (such as games or browser ‘enhancement’ software), omitting reference to the spyware that would accompany any downloaded application.

Once consumers downloaded these ‘free’ applications, however, surreptitious code placed on their computers caused Direct Revenue's own servers to install its spyware, without notice to consumers.

The Attorney General's office also recorded several instances in which Direct Revenue's spyware was installed through silent ‘drive-by-downloads,’ i.e., downloads that took place without any notice at all to consumers.

In addition, Spitzer's office's investigation revealed that Direct Revenue and its officers deliberately designed spyware that, once downloaded, was extremely difficult for users to detect and remove. In many cases, the spyware reinstalled itself after removal by users.

The suit specifically names, and seeks relief and penalties from, the company's founders and chief officers Joshua Abram, Alan Murray, Daniel Kaufman, and Rodney Hook.

Ari Schwartz, Deputy Director of rights group, the Center for Democracy and Technology, welcomed the action.

“Aggressive law enforcement is an essential component in the ongoing fight to stem the tide of unwanted spyware,” he said. “We applaud Attorney General Spitzer for attacking this problem at its source and for sending a message that years of illegal behaviour will not go unanswered.”

A spokesperson for Direct Revenue called the suit “a baseless attempt by the Office of the Attorney General to rewrite the rules of the adware business.”

“This suit complains solely about past practices - practices, in fact, that were consistent with those of virtually all of the leading players in the rapidly evolving adware industry, including some publicly-traded companies much larger than Direct Revenue,” said the spokesperson. “The OAG 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.”

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