Internet Watchdog Calls for Sanctions Against 180solutions

Rhett Pardon
BELLEVUE, Wash. — The Federal Trade Commission has received a formal complaint from the Center for Democracy and Technology claiming that adware maker 180solutions continues “deceptive and unfair” methods in distributing software that generate popup ads.

In the complaint, the Washington, D.C.-based nonprofit group told the FTC that 180solutions has “remained brazenly reckless in its efforts to get its software on users’ computers.” The CDT said it expects injunctions and penalties against 180solutions through the FTC.

While the group acknowledged 180solutions has responded to some complaints over the past two years, the CDT said the Bellevue, Wash., company has made only “minor” improvements.

“We initially had success in our dialogue,” CDT spokesman David McGuire told XBiz. “However, we found that they didn’t really want to address the core business practices we targeted. We got fed up.”

180solutions, which did not return calls to XBiz Tuesday, said in a statement that it hasn’t reviewed the letter filed with the FTC, “but 180solutions and the CDT share the same vision of protecting the rights and privacy of consumers on the Internet.”

“We have voluntarily made improvements to address every reasonable concern that the CDT has made us aware of. We hope to continue the productive dialog with the CDT for years to come,” the statement reads.

180solutions sells advertising and distributes adware software on its own websites and through a network of affiliates, including adult companies. The company claims its products are used by more than 20 million users.

One example cited in the latest complaint involves free web hosting services offered by CJB Management Inc.

According to the CDT, surfers who visit a website hosted for free by CJB are told to expect advertising but don’t understand that it involves a program that “runs continuously and tracks everything that the user does online” in order to better target ads.

CJB said in a statement that it would cooperate with any investigation and said the complaint “is probably based on a misunderstanding of the facts.” The statement did not elaborate on what it disputes.

The latest complaint against the software maker isn’t the first for the firm, which has been mired in controversy since its founding in the late 1990s.

180solutions is best known for a 2004 scandal in which the company was accused of stealing commissions from its own affiliates.

Last year, the company sued seven former affiliates, alleging that they used underhanded tactics to install unwanted software on users’ computers. In that case, 180solutions said that it paid the defendants a total of around $60,000 for installing the software on several thousand computers.

Also last year, the FBI charged an adware affiliate for infecting more than 400,000 computers with a virus program and then installing adware popups from 180solutions and Gammacash.

Jeanson Ancheta of Los Angeles faced a federal indictment that included two counts of conspiracy and other forms of computer intrusion and money laundering.

180solutions and Gammacash claimed that Ancheta violated the terms of their service agreement, which binds them to inform users that adware is being installed on their machines. Ancheta allegedly was posting popups generated from 180solutions subsidiary LOUDcash.

In 2004, 180solutions faced “thiefware” allegations when Harvard researcher Ben Edelman released a report accusing the company of inserting its own affiliate codes into merchant websites, leading the merchants to believe users had reached the sites through 180solutions rather than through its affiliates. The company denied the accuracy of the report and claimed it didn’t profit from installations because users probably noticed the software and uninstalled it before they viewed many of the ads the software is supposed to serve up.

The CDT, in the latest complaint, said that 180solutions’ business model is fundamentally flawed.

“180solutions and its affiliates have caused immeasurable harm, not just to individual Internet users, but to the Internet itself,” CDT Deputy Director Ari Schwartz said. “We are urging the FTC to use all the tools at its disposal to bring these practices to a halt, since 180solutions has repeatedly failed to adequately police its own distribution network.”