Web Advertisers Settle N.Y. Spyware Lawsuit

29 Jan 2007

Summary

In a landmark settlement highlighting the role of advertisers in the dissemination of spyware, N.Y. Attorney General Andrew Cuomo has held three major companies— Cingular Wireless LLC, Priceline.com, and Travelocity— accountable for using an online advertising agency, DirectRevenue, that practiced fraudulent and deceptive advertising. Though fines levied against the companies were nominal, a critical requirement in the settlement is that these companies must now investigate how online advertisers deliver their ads, and ensure the companies don’t violate the agreement or their own policies.

Commenting on this win for consumers, Ari Schwartz, Deputy Director for the Center for Democracy & Technology, said, "The dirty secret about unwanted adware is that many legitimate companies, knowingly or not,- fund its proliferation with their advertising dollars. Until we cut off that funding, there will always be a financial incentive for companies to bombard users with adware that they neither want nor need." Read the article.

Things to think about when reading this article

Money is a powerful motivator and far too many companies—even well known, "reputable" companies—are willing to trade long-term consumer trust for an additional buck today. So this settlement is significant for several reasons:

• It will help protect consumers from becoming victims of pop-up ads and tactics that download spyware, viruses, and other malicious software on their machines.
• It demonstrates that by allowing ads to be distributed illegally, advertisers are as guilty as the company that serves up the ads.
• It will put the industry on notice about other choices they are making that are directly harmful to consumers.

This settlement represents a big step forward in demanding ethical behavior online from companies. (Consider a thank you to Mr. Cuomo with an e-mail to Attorney General Andrew M. Cuomo.)

Unfortunately, the illegal advertising practices of DirectRevenue and the willingness of huge companies like the ones in the suit to use them, represent only the tip of the iceberg of exploitive online behavior by businesses. These can range from not designing products for safety in the first place to failing to alert consumers when they find a safety risk within their products or adding high risk services before giving customers the chance to opt out.

Who pays the price of exploitation? You do—an extremely high price. When you download spyware or other malicious software, problems follow.

• Your identity and reputation could be stolen. Identity theft is a constant threat. (In 2006, according to the U.S. Postal service, it claimed over 9.9 million victims and cost them about $5 billion dollars.) Recovering from this crime can be a long and painful process, where simply correcting your credit report history is the first small step. While you can change your credit history, cancel credit cards, and the like, some of your information will never be returned to private status—your name doesn’t change, your birth date, birth place, mother’s maiden name, and so on. Further, your information may be used once and discarded, or it may be exploited for years by crime rings.
• It often wreaks havoc with your computer. Spyware can secretly download programs that track your online activities, bombard you with pop-ups, or expose you to a virus. It may cause your programs to crash and destroy information on your computer. These assaults unquestionably cost you time and potentially money to restore your computer to health.

The NY settlement is a forerunner to significant accountability that must come to the Internet industry which has failed to police itself. Other industries have learned from bitter experience that fraudulent advertising and other business practices that place consumers at risk may increase revenue in the short term, but eventually cost millions, even billions, in lawsuits and in damage to their reputations and consumer trust.