Adware firm facing NY AG lawsuit denies illegality
The lawyer for the New York adware company sued last week by the state's attorney general said late Thursday that the firm has done nothing illegal.
"Our practices were legal and appropriate then," said Andrew Celli, the attorney who is representing Direct Revenue in the case. "And our new practices are legal and appropriate."
Celli, a partner in the New York City-based firm Emery Celli Brinkerhoff & Abady, also complained that the lawsuit only focused on practices that Direct Revenue has stopped.
"Our current practices are not the subject of the complaint," he said.
"That's not a compelling legal defence," retorted Ben Edelman, a noted anti-spyware researcher as well as a graduate of Harvard Law School. "The fact that you've stopped doing something is not a defence."
Tuesday, the office of New York state's Attorney General Eliot Spitzer filed a lawsuit that charged Direct Revenue and four co-founders with installing millions of copies of their adware programs on users' PCs, and said that the company used deceptive business practices, including drive-by downloads, to put its adware on machines. The lawsuit seeks an immediate injunction, requests an audit of Direct Revenue's finances, and demands "appropriate" financial penalties.
That same day, Direct Revenue released its only official statement. "This lawsuit is a baseless attempt by the Office of the Attorney General to rewrite the rules of the adware business," a spokesman said.
"It focuses exclusively on the company's past practices - practices we and other industry leaders changed long ago - and says not a word about what we're doing today."
Celli said that the company would "use every defence" in the case, but hinted that the Tuesday statement was not a legal defence per se, but one of its business practices. "We have an ongoing business that must be protected," he said.
Edelman agreed. "That's a public relations defence, not a legal defence," he said.
"This suit complains solely about past practices - practices, in fact, that were consistent with those of virtually all of the leading players in the rapidly evolving adware industry," the Direct Revenue spokesman said on Tuesday.
"The fact that everyone else was doing it is not a defence, either," countered Edelman.
"It's true that many of their most objectionable practices have been pared back substantially, but its software remains the kinds of programs that any reasonable user would not want on their computer," he continued.
Although Celli said that Direct Revenue would vigorously defend itself against the charges, he also admitted that the New York-based adware supplier had tried to settle with Spitzer's office. He refused to say whether the proposed settlement involved money.
"It could have been a resolution that would have laid out a blueprint for the Attorney General's treatment of other companies," Celli said. Spitzer rejected the settlement offer.
Perhaps because of its current practices, which Edelman said were still questionable. "There's still plenty to criticize," the researcher said. "Not only does the software show a lot of ads, as often as one every minute, but some of the pop-up windows place the 'X' [close] button off-screen, so they're hard to shut. These are serious and objectionable behaviours."
By Direct Revenue's account, it's completely revamped its business practices. In October, the adware company was one of two firms to claim it was turning a new leaf.
"We don’t need to be cut any slack," said Celli. "We've been changing practices long before the Attorney General finished his investigation."
"Adware companies are under attack," Edelman said. "Users hate them, regulators don't like them. They're having to change their ways under pressure, and when they do, they can't make money.
"They can't get on computers, and once there, they can't stay on."
No date has been set for a hearing of Spitzer's lawsuit.
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