Priceline, Travelocity, Cingular Fined For Adware

by Wendy Davis, Jan 30, 2007, 6:00 AM

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Priceline, Travelocity and Cingular Wireless have agreed to pay fines ranging from $30,000 to $35,000 to settle allegations made by the New York State Attorney General's office stemming from the companies' use of adware.

The settlement appears to mark the first time that marketers have been fined for using adware purveyors that allegedly engage in deceptive practices. The Cingular settlement was signed Monday, while Travelocity and Priceline resolved the allegations with the Attorney General's office last December and October, respectively. All three agreements were made public Monday.

All three companies marketed their services through Direct Revenue, which former New York Attorney General Eliot Spitzer sued last year for installing ad-serving software without consumers' consent.

The original lawsuit against Direct Revenue named several marketers that used the company's adware--including Priceline, Cingular, Monster.com, JPMorgan Chase, and United Airlines--but stopped short of charging the companies with wrongdoing.

In Monday's settlement, which the Attorney General agreed to in lieu of commencing lawsuits, Priceline and Cingular agreed to pay $35,000 fines, while Travelocity agreed to a $30,000 fine. All three also promised that in the future they would only use adware companies that took steps to prevent non-consensual installations.

The settlement agreements also set out the Attorney General's factual findings, including detailed financial information relating to the companies' use of adware.

According to those findings, travel site Priceline paid at least $481,765 from May 1, 2004 through Oct. 31, 2005, to advertise through Direct Revenue; from July through October 2005, at least 6,142,395 ads were shown to consumers via Direct Revenue. The gross bookings attributable to Direct Revenue ads from Jan. 1 2004 through Nov. 17 2005 (and some dates in 2003) totaled at least $3,597,810, according to the findings.

Online travel company Travelocity paid at least $767,955 to use Direct Revenue from July 1, 2004 through Dec. 31, 2005; in that time, at least 2,103,341 ads were delivered to consumers, according to the Attorney General's findings.

Telecom Cingular paid at least $592,172 from April 1 2004 through Oct. 11, 2005, during which time at least 27,623,257 ads were delivered to consumers via Direct Revenue.

None of the companies admitted that the Attorney General's findings were accurate.

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