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Advertising Inc Settles FTC Adware Charges

The "Advertising" website, now a subsidiary of America Online, Inc., has agreed to settle FTC charges that it violated federal law by offering free security software, but failing to disclose adequately that adware was bundled with that software. The settlement will require that the company clearly and prominently disclose adware bundled with software advertised to enhance security or privacy.

This company offered SpyBlast, a free security program to protect against hackers, said Lydia Parnes, Director of the FTCs Bureau of Consumer Protection. But consumers who downloaded SpyBlast also downloaded a form of software that followed their electronic comings and goings and force-fed them pop-up ads. According to the complaint, the SpyBlast software was bundled with a software program that collected information about consumers, including the URLs of pages they visited, that was used to send them advertisements.

The FTC complaint charged that Advertising, Inc., and its co-founder, John Ferber, distributed ads stating that because a consumers computer was broadcasting an Internet IP address, it was at risk from hackers. Consumers who clicked on one of the ads were shown an Active X security warning installation box, with a hyperlink describing SpyBlast as Personal Computer Security and Protection Software from unauthorized users and telling them, once you agree to the License Terms and Privacy policy - click YES to continue. The hyperlink did not indicate the nature and significance of the terms of the licensing agreement namely that adware would be installed on their computers. Consumers were not required to read the agreement before installing the software. If consumers had read the agreement, they might have seen a statement saying that by accepting the software, they agreed to receive marketing messages, including pop-up ads, based on their Internet browsing habits.