FTC Settles With Internet Marketing Firm

Rhett Pardon
SAN DIEGO, Calif. — In one of the first legal maneuvers by the Federal Trade Commission to address pop-up ads, the agency said it settled with San Diego-based D Squared Solutions LLC, which agreed to stop bombarding web surfers with advertisements.

But the Friday announcement appears to be fruitless for the FTC because D Squared is now out of business, former president Anish Dhingra told XBiz.

The FTC's legal case against D Squared was seen as an attempt to limit an often-intrusive form of advertising that exploits technology built into Microsoft Corp.'s Windows software.

Dhingra said that his company only offered ads for its own ad-blocking software. “We never had anything to do with adult,” Dhingra said.

With the settlement, D Squared agreed not to send pop-up ads using the Messenger function enabled on many Windows operating systems; such ads do not require an open Web browser to display. The company also agreed not to sell ad-blocking software in the future, and it is barred from sending other ads unless users can choose not to receive them.

The FTC alleged that using Messenger, D Squared was able to send pop up ads every 10 seconds in the form of dialogue boxes that usually appeared in the middle of the computer screen. This function was initially designed for network operators to send systemwide messages to employees.

The FTC said the practice was a hassle to consumers and misled them into thinking there was nothing they could do to stop the ads.

The company's founders, Dhingra and Jeffrey Davis, do not admit wrongdoing and do not face any penalties.