Advertising software maker 180solutions has filed a lawsuit against seven distributors of its software for illegally installing the product on computers they had hacked.
The company alleges that the individuals installed the software without the user's consent on computers that were under their control in so-called botnets. Such networks of hacked computers are often used to send spam or to launch distributed denial of service attacks.
One of the defendants is Imran Patel from the UK, the others are from Australia, Canada, Lebanon, Slovenia and two reside in The Netherlands.
Of the other defendants, 19-year-old Dutchman Eric de Vogt was sentenced to a 38-day jail term and 240 hours of community service earlier this year for launching a distributed denial of service attack against two Dutch government websites in 2004.
180solutions' software delivers pop-up ads to people as they visit web pages. The software is mostly distributed via partner websites that receive a fee for every copy of the software that gets installed.
The advertising software is bundled with an application called Zango. The software promises users access to games and premium content and the Zango search assistant presents them with commercial advertisements based on the websites they visit.
An affiliate is paid between 7 and 50 cents per installation, estimated Ben Edelman, a PhD candidate at Harvard University, who specialises in spyware.
Although he doubts that 180solutions meant to recruit hackers and botnet operators, the company had this coming, Edelman told vnunet.com. By paying a fee per installation, 180solutions created an incentive for its distributors to install the software without user consent, he argued.
"This is the consequence of hiring affiliates in a haphazard way. They went so far as to recruit these distributors by unsolicited commercial email or spam. "
The seven former distributors stood out because they achieved extraordinarily high conversion rates. Normally up to 20 per cent of the users who start downloading 180solutions' software actually finish the installation and agree with the terms and conditions.
"These individuals were getting conversion rates well in excess of that 20 per cent," Kevin Osborne, 180solutions' senior litigation attorney told vnunet.com. "They weren't giving the user the chance to consent. You get a huge conversion rate if you don't give the user the chance to opt out."
180solutions is seeking financial damages as well as an order for the group to stop distributing its software. If the defendants fail to show up in court, the company plans to seek a default judgement and, where possible, use international treaties to enforce the ruling, said Osborne.
The company also said that it expects to file additional lawsuits against other distributors in the coming weeks or months.
Many spyware and adware detection tools label 180solutions' software as malicious and remove it. Adware software has a bad image because it is installed secretly, is hard to remove or hides the disclosure of its true intension in lengthy jargon-ridden documents that, for the layman, are impossible to read.
180solutions has been fighting this image and in past months has tried to create a more gentile image of itself and its software. It now presents users with a pop up every 90 days that discloses the presence of the software and explains what it does. The lawsuit against its distributors or affiliates is part of the clean-up of its image.
Spyware and adware researcher Edelman, however, has condemned the periodical disclosures. The notifications make false statements, he alleges, and fail to ask users to consent to the software being present on their systems.
He added that the lawsuits against its distributors are just part of a public relations campaign in which the company is trying to shed the image of adware maker, in an effort to stop spyware detection tools from removing or blocking the software.
"I don't see them having any business model other than watching what users do online and serving them pop-up ads. Their software shows ads, they are adware."
He raised questions about the timing of the lawsuit, as the alleged violations took place about one year ago. In the meantime the company has been serving advertisements to the users of the affected systems and plans to keep serving them advertisements.
The adware maker also should have known better when it signed up distribution partners from countries like Slovenia and Lebanon.
"It isn't standard American internet marketing practice to do business with companies in Slovenia or Lebanon. You are going to want to do some extra checking."
180solutions countered that it has strict guidelines in selecting its affiliates. Only 20 to 30 per cent of the requests to become an affiliate are honoured, a spokesperson for the company said.
The company is also unable to remove its software from the systems, and it would probably be illegal to do so, he added.
The selection of distribution partners throughout the world is a result of the global nature of the web, Osborne,'180solutions' senior litigation attorney, contended.
"We have good and legitimate partners and affiliates in all these countries. These just happen to be a few from which bad apples have arisen."
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