Group Petitions FTC To Shut Down Adware Maker

A public policy group filed complaints with the Federal Trade Commission Monday against 180solutions and one of its partners, and asked the FTC to shutter one of the adware industry's biggest players.

Washington, D.C.-based Center for Democracy and Technology (CDT) filed a pair of complaints with the FTC, alleging that 180solutions' "core business model depends on third-party affiliates committing unfair and deceptive practices on the company's behalf" and that the free Web hosting provider CJB.net, a 180solutions affiliate, "dupes people into installing 180solutions’ software."

The complaint is the biggest move against an adware purveyor since the FTC pulled the plug last November to shut down three adware companies, Enternet Media, Conspy & Co., and Networld One.

"This is an ongoing pattern of unfair and deceptive trade practices that really show that the company has not taken previous warnings or previous concerns into account," said Ari Schwartz, the deputy director of the CDT.

180solutions has been heavily criticized by anti-adware researchers for everything from using Internet Explorer security vulnerabilities to install its software to hiding its disclosure policies inside long legal notices. In response, the Bellevue, Wash.-based Web company said rogue partners were to blame for some practices, and actually took some of those affiliates to court. It also made changes to its download software.

But in November, a massive botnet operation in the Netherlands was found to be installing 180solutions' software and cashing in as an affiliate.

The CDT said it had been working with 180solutions for more than two years to address concerns, but that progress stalled as complaints about the firm kept pouring in.

"180solutisons said they’ve cleaned up," Schwartz said. "But CDT finds this to be deceptive. We want to give fair notice to companies thinking about advertising with 180solutions that they keep this in mind."

In essence, the CDT concluded that it was 180solutions business model that was at fault. "There is a core flaw in their business practices that causes them to continue to engage in these deceptive relations with affiliates and put unwanted software on people’s computers," added David McGuire, a spokesman for the CDT.

"That's what I think is so important about this complaint, that there's a fundamental problem in their business model," said Eric Howes, the director of malware research at anti-spyware software maker Sunbelt Software, and one several researchers cited by the CDT for helping it investigate 180solutions' adware practices.

"I told them the same thing last fall, and their response was unambiguous," said Howes. "'No, we won't change,' that's what they said."

Howes also backed up the CDT's contention that 180solutions was masking deceptive practices with public pronouncements that it was changing how its ads were placed and how its affiliates were policed.

"During 2005, this company was issuing one press release after another claiming that they'd cleaned up their act," said Howes. "But already in 2006, there's evident that these problems are continuing. FaceTime, for example, warned about an IM worm that was installing 180solutions' software.

"This 'our lousy affiliates excuse' just doesn't cut it anymore," said Howes, referring to 180solutions contention that rogue partners were responsible for the deceptive downloads.

"180solutions has become the poster boy of spyware and adware. They're making a lot of money using a business model that's illegitimate. This is the perfect example of how that can go bad."

180solutions issued a statement Monday after the CDT filed its complaints, but said it was withholding comment until it had a chance to review the documents. "180solutions and the CDT share the same vision of protecting the rights and privacy of consumers on the Internet," said 180solutions spokesman Sean Sundwall in an e-mail reply to TechWeb. "We have voluntarily made improvements to address every reasonable concern that the CDT has made us aware of."

The CDT's complaints asked the FTC to stop 180solutions from its allegedly deceptive installation of its software, as well as for some kind of payback for consumers.

"CDT is also asking for a financial reward for consumers, the first time we’ve done that," said Schwartz. Although the CDT passed some figures on to the FTC, it's expecting the agency to come up with a number.

"180solutions and its affiliates have caused immeasurable harm, not just to individual users, but to the Internet itself," said Schwartz. "This company’s brazen distribution practices saddle innocent Internet users with intrusive software that they neither want nor need and contribute to a general sense of wariness and distrust that threatens to stifle the growth of the medium."

Additional reporting by Christopher T. Heun, InternetWeek