Warns Online Marketers About Continued Use

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WASHINGTON (AdAge.com) -- A Federal Trade Commission member is serving notice to marketers who use adware to promote their products: He will push to publicly identify miscreants --effectively shaming them -- in future FTC cases unless they voluntarily rein in their activities.
FTC Commissioner Jon Leibowitz is warning marketers about using adware.

Upset that the same major marketers who have forgone the use of advertising spam continue to support the adware that pops up on consumers computers without permission or control, FTC Commissioner Jon Leibowitz is calling on marketers to voluntarily clean up their act -- or else.

“A lot of consumers have stuff in their computers that’s generating pop-up ads that is hard to uninstall that they didn’t consent to and some [of the ads] are for major advertisers,” said Mr. Leibowitz, a Democrat who recently joined the FTC.

Calling adware “a serious problem for average consumers” that affects “tens of millions of Americans” he said marketers need to follow their instinct and “do the right thing” and not follow their competitors into the “dark-gray areas” of marketing.

Mr. Leibowitz said he has been talking up some self-control in various meetings of marketer associations, warning that the adware programs threaten their livelihood. “You are going to kill the goose if you lose face with Internet consumers,” he said. “The FTC could consider that when it brings adware cases, listing all the advertisers whose content was delivered without notice of consent.”

Bundled in programs
Mr. Leibowitz declined to cite specific marketers or adware suppliers who serve the marketers’ ads, but said some of the problems stem from adware getting bundled with other programs, without consumers either consenting or understanding that adware is going on their machines.

Trackers of the ads express no similar reluctance. Ben Edelman, a vocal adware critic, said travel companies, Web banks, dating sites, cellphone companies and other travel companies are the biggest adware supporters.

Adware critics complain that despite nominal requests for consumer approval, adware products get on PCs despite consumers’ wishes sometimes surreptitiously, as software makers try to generate revenues for their products. “There is no one out there saying, ‘I want this stuff.’ It’s ‘I got stuck with it’,” said Ari Schwartz, associate director of the Center for Democracy & Technology.

Stronger measures
He would like to see the FTC take even stronger measures against the advertisers when it pursues adware cases. “If someone is advertising with these guys that have had bad practices, that haven’t gotten consent and are not branding the software they come with, at some point the advertiser should be held liable,” he said.

Five companies are the biggest makers of adware and several of them last week said they have greatly improved their disclosures to consumers and noted new efforts of Internet privacy association Truste to establish industry self-regulatory procedures for reviewing consent.

Sean Sundwell, director-corporate communications for 180Solutions, earlier this year sent its 20 million users a reminder about the software’s presence, giving them a new opportunity to have the software removed.

Guidelines cited
“We categorically require consent. Have there been instances where the software has been fraudulently installed? Sure, but it violated our guidelines and whenever we find an instance we notify all the customers. Further we are now notifying our customers every 90 days [that they can uninstall] and at any time they are three clicks away from uninstalling.”

Claria in a statement said it “never” installs on consumers’ computers without their consent. “Claria informs users of the value exchange—free software in exchange for consumers agreeing to receive ads based on their online activities … during the install process” and includes an entry “programs” and in the add/remove panel for its Gain Network adware. It also said it will comply with Truste’s guidelines.

WhenU CEO Bill Day said his company has stepped up its efforts to make its software more explicit and gives consumers a separate decision on whether it should be installed if it is co-bundled with other products. He said WhenU doesn’t want to be on machines of consumers who don’t want its product.

“It’s not good business for us if the consumers aren’t qualified,” he said, adding that WhenU also agrees “100%” with Mr. Leibowitz that marketers shouldn’t be using adware products that don’t have consumers’ consent.

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