• by Wendy Davis  @wendyndavis, February 10, 2006

WASHINGTON, D.C.--The Federal Trade Commission's efforts against adware have so far focused on the supply side by filing lawsuits against companies that unlawfully install ad-serving software. Now, one agency commissioner says it might be time to target demand, by naming the big brands that use adware to market their products.

"A little shaming here might go a long way," said the FTC's Jonathan Leibowitz, speaking Thursday to an audience of about 300 at a conference organized by the Anti-Spyware Coalition and Center for Democracy and Technology.

While Leibowitz didn't actually name any companies at the conference, he said that the FTC is considering doing so in the future, if adware companies continue to vex consumers by installing ad-serving programs on their computers without first obtaining consent.

Throughout the day-long conference, government representatives, executives from software removal vendors, and consumer advocates vented their frustration with adware purveyors for everything from installation methods to distribution systems to burying information about pop-up ads in a lengthy end-user license agreement.

Although ad-serving programs don't pose the same security risks as so-called spyware programs that log keystrokes or otherwise capture personal information, some speakers indicated that adware is the more challenging problem, because it's both more pervasive than spyware and harder to regulate.

"Nuisance adware invariably affects millions, and in the aggregate, the harm can be enormous," Leibowitz told the crowd.

At the same time, adware is more difficult to tackle through the courts, because it's lawful--at least when users agree to it--and doesn't always result in tangible harm.

"Pure spyware's clearly illegal," said Justin Brookman, a lawyer with the New York Attorney General's Office, which sued adware company Intermix last year. "In the adware industry, companies operate in the realm of plausible deniability."

Brookman added that his office had no complaints with adware in principle, provided that companies clearly spelled out to consumers the consequences of downloading ad-serving software. "We're not anti-adware," he said. "If somebody wants to go and download a 'Finding Nemo' screensaver and makes an informed decision ... we're fine with that."

Bill Day, CEO of WhenU--one of the few adware companies represented at the conference--said he thought ad-serving programs could give consumers value by providing them with free products in exchange for their agreement to view ads.

"The mantra I had coming into this job was that we could make adware a value proposition for the consumer," said Day, who came to WhenU from About.com in 2004.

But others disagreed that adware companies offered enough of an enticement to justify pop-up ads. "I have yet to find the screensaver I'd have bought for $30," said Jules Polonetsky, vice president, integrity assurance for America Online.

Walter Mossberg, tech columnist for The Wall Street Journal, went even further--condemning not just adware and spyware, but also cookies placed on consumers' computers by ad-serving and analytics companies that he said "are under the delusion that it's okay to force their way into our computers for advertising, marketing and research purposes."

"We are living through a digital siege," Mossberg said. "Nobody should have the right to invade your property or appropriate your property."