US judge drops FTC restraining order against "popup" spammers

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Tue, 16 Dec 2003 08:51:49 -0500
From: Ted Bridis <TBridis () ap org>
Subject: US judge drops FTC restraining order against "popup" spammers
To: dave () farber net


http://online.wsj.com/article/0,,SB107153412622692000,00.html?mod=techno
logy_main_whats_news

Judge Rules D-Squared Can
Send Pop-Up Ads -- for Now

Associated Press

BALTIMORE -- A federal judge Monday ruled that a California company can
send "pop-up" Internet ads that regulators have called "high-tech
extortion" -- at least until the matter is decided at trial.

U.S. District Judge Andre Davis said there wasn't enough evidence for
him to grant a preliminary injunction sought by the Federal Trade
Commission. Regulators wanted to stop San Diego-based D-Squared
Solutions LLC from selling its ad-blocking software.

"It's not clear to me ... if there's substantial injury to consumers,"
said Judge Davis, who set a trial date for March 8. "The case had the
odor of extortion as it was originally prosecuted ... but it certainly
doesn't look like extortion to me."

The FTC said D-Squared improperly used a technology built into most
versions of Microsoft's Windows software to display intrusive messages
on computer screens.

The messages offered software to block the same types of ads the company
was sending. The FTC said D-Squared unlawfully exploited Microsoft's
Windows Messenger Service feature by sending the unwanted ads to
Internet users as frequently as once every 10 minutes.

FTC attorney Mona Spivack said D-Squared's advertisements caused
"substantial injury" to consumers, citing lost data, crashed computers,
frustration, annoyance and harassment.

"They clearly knew that this practice was in fact causing consumers'
computers to crash," Spivack said. "The defendant's own marketing
material said this."

D-Squared attorney Anthony Dain said the company's owners, Anish Dhingra
and Jeffrey Davis, created the pop-ups with the intent of sending only
one a day to a consumer's computer.

"It's self-defeating to bombard. It doesn't make sense," Mr. Dain said.
"Should our clients be shut down from their best marketing tool and from
the tool that best serves the customer, whether they're annoyed or not?"

D-Squared attorney Frederick Taylor said the ruling would come as a
relief to his clients, who are college students at the University of
California, San Diego. He said attorneys would consult with the owners
before deciding whether to resume the pop-ups. Neither Mr. Dhingra nor
Mr. Davis was in the court Monday.

Windows Messenger Service is unrelated to Microsoft's instant-messaging
software that uses the same name. It allows network administrators to
display messages on a user's computer screen, such as a warning that a
company's Internet connection might be having problems.

But some Internet marketers use the technology to display ads for
software and pornography. It takes seven mouse clicks to disable the
messenger service; the FTC said typical consumers don't know how to do
this.

Karl Albrecht, 41 years old, of Milford, Mich., said his home computer
was bombarded with pop-ups from D-Squared when he tried to set up
Internet service.

"I think there's a fine line between extortion and advertisement, and
this clearly crossed the line," Mr. Albrecht said. "They're offering to
fix the problem they created."

The software, which D-Squared advertised as blocking "these unwanted and
illegal pop-up messages forever with the click of a button," costs
between $25 and $30.

D-Squared also sells software that allows a user to send messages to
135,000 Internet protocol addresses in an hour. The FTC says the company
provides customers with a database containing more than two billion
unique IP addresses.

"The FTC is trying to hoist up warnings for people who they think are
taking advantage of the freedom of the Net to misuse it," said David
Farber, a professor of computer science and public policy at Carnegie
Mellon University. "The message that's being sent out is that if you're
going to do this, expect to see us on your doorstep."

Copyright (c) 2003 Associated Press

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