• by Wendy Davis , Staff Writer @wendyndavis, August 4, 2005

At first glance, The Federal Trade Commission's move this week announcing it had reached an agreement with America Online's Advertising.com to settle an adware complaint raises more questions than it answers.

Both the FTC and AOL told OnlineMediaDaily that the charges related to activity that occurred two years ago. Advertising.com doesn't now distribute adware; in fact, Advertising.com no longer even does business with other companies that distribute adware.

In addition, unlike some companies, Advertising.com apparently disclosed in the end-user license agreement that consumers downloading the adware-bundled programs would receive pop-up ads.

What's more, the most crucial part of the settlement appears to be moot. The agreement provides that Advertising.com will prominently disclose that downloading any adware-bundled programs will result in pop-ups being served. But, because Advertising.com no longer purveys adware, this provision won't have any real impact.

With all of the companies out there that actually distribute adware and/or spyware, why did the FTC target one that stopped two years ago? And why go to such lengths to publicize a settlement that will have little practical import?

The only explanation that makes sense is that the FTC wanted to warn other, current purveyors that they must do a better job of notifying consumers who are about to download ad-serving programs of the consequences.

In fact, the FTC and Advertising.com agreed on requirements for clear and prominent disclosure: The disclosure must appear on the screen long enough for consumers to see it; the color and size must make it stand out; and it must be unavoidable -- meaning it's not sufficient to give consumers the option to click on a hyperlink that will spell out the disclosures.

While this agreement doesn't bind other adware companies, they'd nonetheless be well-advised to heed its terms.