Adware company Direct Revenue has agreed to pay the FTC $1.5 million after facing charges that the company illegally installed advertising software on users computers without their knowledge or consent.
According to the FTC, Direct Revenue enticed consumers with free content like games, icons and screensavers, but did not adequately inform those customers that by downloading and installing those packages, they were also installing software that would monitor their behavior and serve them targeted popup ads.
Under the terms of the settlement, Direct Revenue will not be able to send software to customers without their consent and must provide an easy way to remove that software.
In November 2006, the FTC cracked down on a number of adware distributors. Adware company Zango settled for $3 million.
According to a company statement, Direct Revenue is happy to pay $1.5 million. “This agreement is a major step forward in resolving the legal and regulatory issues facing Direct Revenue,” said Direct Revenue council Stuart Friedel.
The FTC Commission approved the settlement, with a vote of four to one.
FTC commissioner Jon Leibowitz was unhappy with the settlement and issued his own statement saying that “the $1.5 million … is a disappointment because it apparently leaves DirectRevenue’s owners lining their pockets with more than $20 million from a business model based on deceit.”
Direct Revenue blames third-party distributors for the charges and says it had stopped distributing software through affiliates in 2005 and through third parties in 2006.