FTC Imposes Penalty on Spyware Company

The Federal Trade Commission has brought down the growth of an online advertising firm for employing adware and spyware during business operations.

DirectRevenue LLC, the company that offers advertising services on the Internet now has severe restrictions on its practices and also a fine of $1.5 million is imposed on it, according to an order released towards the end of June this year.

However, Commissioner Jon Leibowitz differed about the settlement. He believes that the fine penalty isn't sufficient enough. He said he could not agree with the consent order that asks the accused, DirectRevenue to pay just $1.5 million. With the venture capitalists' contribution of $20 million into the business operations of DirectRevenue and on the basis of the company's total ad earnings and the amount of venture capital, the owners accrued a huge sum of $23 million, reported Business Week. Msmvps published this on July 3, 2007.

DirectRevenue installed nearly 150 million pieces of adware and spyware causing billions of pop-up ads on users' computers, the FTC said. Although there would be severe curtailment of DirectRevenue's business practices due to the commission's orders, the company is still running while its officers have no criminal charges pending against them, as reported by Darkreading on July 6, 2007.

According to the FTC, DirectRevenue and its higher officials distributed spyware and adware to users' PCs with the support of fake stories and also without their permission. The company applied various tricks to entice users into downloading the malicious codes. Other harmful programs were a free "atomic clock" application, a security alert, and a spoof pop-up blocker that resulted in more pop-up ads.

The company went so far as to prevent users from eliminating the spyware and adware it had loaded, stated the FTC complaint. Once DirectRevenue even arranged an automatic reinstallation of the adware through a code they delivered.

Apart from the numerous hours people spent in closing the pop-up ads, the malware that crashed their PCs caused loss of their important data. There was no doubt a lot of anger and frustration for the consumers in dealing with DirectRevenue's malicious codes, said Leibowitz.

Related article: FTC Reaches Million-Dollar Settlement For Spyware

» SPAMfighter News - 7/21/2007