NY Attorney General Files Spyware Suit - InformationWeek

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4/4/2006
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NY Attorney General Files Spyware Suit

The suit, which accuses Direct Revenue of secretly installing millions of pop-up ad programs and spyware, is seeking a stop order, an accounting of the company's revenues, and penalties.

The New York State Attorney General's Office is suing Direct Revenue, claiming the company secretly installed millions of pop-up ad programs and sent ads through secretly installed spyware.

The state's top prosecutor filed the lawsuit Tuesday, seeking a court order forcing the company to stop and requesting an accounting of the company's revenues. The lawsuit also requests "appropriate" monetary penalties.

New York Attorney General Eliot Spitzer claims the company and its distributors offered free games, browsers and enhancement software to lure customers into unknowingly downloading code that linked their computers to the company's servers, which then downloaded the spyware.

During an investigation, Spitzer's Internet bureau also recorded silent "drive-by-downloads," or instances of bundling, which occurred on 21 Web sites without notice, according to a statement Spitzer released Tuesday. The spyware tracked Web behavior, delivered sequential pop-up ads, was difficult to detect and remove and reinstalled itself, according to the statement. The lawsuit states that computer users were directed to go to a Web site, mypctuneup.com, and turn off their firewalls before "uninstalling" the software.

VX2, Aurora and OfferOptimizer are among the applications used to target consumers.

The lawsuit names CEO Josh Abram, Alan Murray, Daniel Kaufman and Rodney Hook. It states that they knew about and participated in the schemes while holding a majority of the company's stock. An e-mail allegedly sent by Abram states that "we will not get caught."

The lawsuit states that the company and its individual defendants violated New York State business law, which prohibits false advertising; its penal law, which prohibits computer tampering; and its common law, which outlaws trespassing.

Spitzer has aggressively pursued Internet fraud cases.

Ari Schwartz, Deputy Director of the Center for Democracy and Technology praised Spitzer's actions.

"The practice of forcing consumers into downloading software they neither want nor need has threatened the essential trust that lies at the heart of Internet communication," he said through a prepared statement.

Direct Revenue could not be reached immediately for comment. The online marketing company has said recently that it strives to follow online advertising best practices and that it tries to educate consumers.

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