DirectRevenue to pay $1.5M in adware settlement

DirectRevenue has agreed to pay a $1.5 million fine for distributing adware.

A New York company has agreed to pay US$1.5 million to settle charges that it infected victims' computers with adware.

In addition to the fine, DirectRevenue has agreed to stop sneaking its adware onto victims' PCs and to provide a "reasonable and effective" way for consumers to remove the software, the U.S. Federal Trade Commission (FTC) said in a statement, released Friday.

DirectRevenue bills itself as a legitimate online advertising company, but its business practices have come under government scrutiny before. Last April, the New York Attorney General sued the company, claiming that its free games and browser enhancements secretly contained spyware that would track the victim's online activity and deliver pop-up ads for related products.

DirectRevenue could not be reached immediately for comment Friday, but it has called the New York lawsuit "baseless," saying that it has changed its business practices and that its products are not spyware.

"Mislabeling our products as 'spyware' does a disservice not only to our company, but also to the public by creating an atmosphere of hysteria, confusion and inaccuracy," the company states on its Web site.

Not all FTC commissioners agreed with the settlement. According to the FTC statement, Commissioner Jon Leibowitz felt that DirectRevenue got off easy.

"The US$1.5 million in monetary relief... is a disappointment because it apparently leaves DirectRevenue's owners lining their pockets with more than US$20 million from a business model based on deceit," he said.

Antispyware researcher Ben Edelman agreed that the FTC should have gone after a bigger settlement. "Sure they pay a couple million dollars to the FTC, but they keep tens of millions -- so they'd profitably do it again if they got the chance," he said via e-mail. "This is the wrong message for the FTC to send."

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