Watchdog Asks FTC To Sue 180solutions

by Wendy Davis, Jan 24, 2006, 6:00 AM

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After two years of attempts to work with adware company 180solutions, the nonprofit watchdog Center for Democracy and Technology Monday filed a complaint against the company, charging that it engages in "distribution practices that appear to be broadly unethical and in many cases, illegal."

In a 91-page document filed with the Federal Trade Commission, the Center for Democracy and Technology, or CDT, alleged that 180solutions' "core business model depends on third-party affiliates committing unfair and deceptive practices on the company's behalf."

"Despite CDT's reports, audits from the company's own consultants, and public reports from security experts, 180solutions has remained brazenly reckless in its efforts to get its software on users' computers," reads the complaint, which asks the FTC to seek monetary damages against 180solutions and an injunction banning the company from the unfair and or deceptive installations of adware.

180solutions responded with a statement that it had voluntarily "made improvements to address every reasonable concern that the CDT has made us aware of."

The complaint filed Monday--and comments made by representatives of the CDT--made plain the group's frustration with 180solutions, despite the company's aggressive and public attempts to improve its image.

"To have this continually happen is really beyond the pale of what a responsible software company should be doing today," CDT Deputy Director Ari Schwartz said in a conference call with reporters Monday morning. The CDT also plans to speak with 180solutions' advertisers, and inform them that they are affiliated with practices that result in allegedly improper adware installations.

The CDT's papers detailed a litany of examples of 180solutions' ad-serving software being installed without adequate notice to consumers. The CDT also stated that it made numerous attempts to work collaboratively with 180solutions, but that improper installations continue to occur. The most recent example cited in the complaint occurred on Jan. 6, when 180solutions' adware allegedly was installed without users' permission through a worm in America Online's instant messenger.

In the last year, 180solutions has tried to burnish its image by publicly distancing itself from companies accused of using improper installation methods; in some cases, 180solutions filed lawsuits against former affiliates that allegedly installed adware without first obtaining consumers' consent. 180solutions also recently sued a software removal company for "trade libel" for classifying 180solutions' ad-serving program as "spyware."

In a Dec. 29 post on the 180solutions blog, Sean Sundwall, director of corporate communications, boasted that 180solutions had undertaken "a complete overhaul of our distribution model." By the end of October, according to the blog post, 180solutions had stopped using third-party distributors--which it defined as "partners of partners."

Currently, 180solutions contracts directly with about 1,000 Web companies that distribute its software. One of those, CJB.net, also was targeted Monday by the Center for Democracy and Technology.

Despite its recent steps, 180solutions continues to have a poor reputation among watchdogs. Eric Howes, a spyware researcher and director of malware research at Sunbelt Software, collected and posted a list of examples of allegedly improper installations on the site SpywareWarrior.com; his research was cited by the CDT in its complaint.

The basic problem, according to Howes and the CDT, is that 180solutions' business model relies on partners to distribute its ad-serving software. 180solutions has stated in the past that companies have no financial incentive to improperly install adware; 180 also maintains that it doesn't profit from improper installations because consumers quickly remove unwanted software.

But others say that not all consumers are technically savvy enough to immediately remove the programs. Even if the adware remains for just a few days, that's long enough for 180solutions to serve at least some impressions.

"Until they change their business model, the problems will continue," Howes said.

A spokesman for the CDT agreed: "Their business model created a situation where bad installations are happening," said CDT spokesman David McGuire. "They can't just wash their hands of their own network."

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