Spitzer Sues Spyware Firm

by Glen Shapiro, LawAndTax-News.com, New York

06 April 2006

New York's Attorney General, Eliot Spitzer on Tuesday sued one of the country's most elusive internet spyware companies, alleging that the firm surreptitiously installed millions of pop-up ad programs on consumers' computers.

The suit against Direct Revenue seeks a court order enjoining 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 asks the court to impose appropriate monetary penalties.

"Surreptitiously installed spyware and adware harm consumers and businesses, and my office will continue to prosecute these practices aggressively," explained Spitzer, whose office last year spurred industry-wide attention to this problem with his suit and settlement against adware distributor Intermix Media.

"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. We will continue to side with consumers in their fight for control of their desktops," he added.

The suit 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, 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.

Spitzer's office's investigation further 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 lawsuit goes on to allege that Direct Revenue and certain of its executives knowingly frustrated consumers' attempts to remove the downloaded software by requiring consumers intent on accomplishing removal to go to a separate web site (mypctuneup.com), turn off their firewalls and download additional "uninstall" software.

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. The four individual defendants in the lawsuit have owned a majority of the company's stock since its inception.

Recommended