- Group Files FTC Complaints Against Adware Company
- February 13, 2006
- Law Firm: Reed Smith LLP - Pittsburgh Office
Following a two-year investigation, the Center for Democracy & Technology (CDT) has filed with the Federal Trade Commission two separate complaints against the online adware company 180solutions.
The CDT's actions go further than challenging specific business practices, instead taking issue with 180solutions entire business model.
180solutions, which is based in Bellevue, Wash., says it provides consumers with access to free content in exchange for the right to download its software, which delivers targeted pop-up advertising as consumers browse online. "Our software continues to be downloaded by millions of people each month. This phenomenal growth is the result of our consumer-friendly advertising approach and the premium content access that this advertising makes possible," 180solutions states on its Web site.
However, Washington, D.C.-based CDT sees things very differently. According to a press release summarizing its 91-page complaint, CDT has identified "a pattern whereby 180solutions, through a complicated web of affiliate relationships, deliberately and repeatedly attempted to dupe Internet users into downloading intrusive advertising software."
In its complaint, the CDT alleges that "180solutions' core business model depends on third-party affiliates committing unfair and deceptive practices on the company's behalf."
The CDT also has filed a second complaint with the FTC, in conjunction with the Technology Law & Public Policy Clinic at the University of Washington School of Law, which names both 180solutions and one of its affiliates, CJB.NET.
The groups claim CJB.NET provides free Web site hosting but does not adequately disclose to consumers who use its services that they will be prompted to download software. The complaint also alleges that CJB.NET uses a "deceptive security warning" prompt to lure computer users into installing 180solutions software.
180solutions has responded that it has cooperated with CDT to meet the group's concerns. The company has sued affiliates for installing software on users' computers without their consent, and has issued a newer version of its software with tighter security controls to prevent unauthorized installation.
"180solutions was initially cooperative," CDT acknowledged in its press release. "However¿CDT received a nearly continuous stream of new complaints about 180solutions and its affiliates," the organization stated. "After more than two years of investigation and discussion, CDT concluded that 180solutions' underlying business model is fundamentally flawed."
180solutions is battling watchdogs on other fronts. In November, the company filed suit against the San Francisco spyware removal company, Zone Labs LLC, after Zone Labs classified 180solutions products as "spyware." 180solutions sued Zone Labs for libel and tortious interference with business, accusing the latter of causing thousands of users to uninstall its software, and preventing it from being able to do business with companies wary of its reputation (180solutions Inc., v. Zone Labs LLC, No. 05-36579 (Wash. Super. Ct., King County Nov. 3, 2005)).
In addition to these battles, 180solutions has been sued in Illinois by a plaintiff seeking to bring a class action for the alleged installation of 180solutions software and subsequent interference with computer functions (Simios v. 180solutions Inc., No. 05-C-5235 (N.D.Ill., Dept. 13, 2005).
Why This Matters: The 180solutions business model depends on the ability to disseminate advertising delivery software through third-party affiliates. CDT appears to be taking issue with the very concept of network or affiliate advertising. While efforts need to be made to clamp down on bad actors who install software without users' consent, to ban affiliate advertising may be too extreme. This case may be instructive as to how much a company is required to do to control its affiliate network.