2 Students To Fight Ftc Pop-up Ad Policy

[DudeAsInCool]

2 students to fight FTC pop-up ad policy

By Ted Bridis

Dec. 9, 2003  |  WASHINGTON (AP) -- Those flashy pop-up ads that annoy millions of Internet users each day are getting a legal test, thanks to a pair of 20-year-old college students who are challenging the government's effort to regulate the advertisements.

The Federal Trade Commission accuses the students' small California company of committing ``high-tech extortion'' by using a feature inside popular Windows software to generate pop-up ads as frequently as every 10 minutes. Ironically _ and a key factor in the government's case _ the students' pop-ups tout software designed to block such ads.

The company, D-Squared Solutions LLC of San Diego, has countered that the government's allegations go too far and that its ads are ``no more harmful than roadway speedbumps or television commercials.''

Federal regulators brought the enforcement lawsuit in hopes it would quickly dampen one of the most irritating practices of Internet advertisers. Instead, the company's founders have mounted a spirited defense over whether such pop-ads are protected free speech.

``It's very unusual for a company to aggressively fight an FTC enforcement action,'' said Mark Rasch, an expert on technology law. Most companies in high-profile FTC lawsuits quickly settle, typically paying a fine and pledging to stop the disputed business practice.

Rasch said the FTC's legal arguments and the company's business practices were ``right on the margins,'' ripe for challenge in an important dispute that could have broad effects on the future of Internet advertising.

The FTC last month accused D-Squared of unlawfully exploiting ``Messenger'' network technology built into most new versions of Microsoft's Windows operating system to display the unwanted advertisements. Unlike Web-based pop-up ads, such messages can appear even when a computer user isn't surfing the Web.

The D-Squared messages advertised the company's software that can block such ads.

The company contends that it wasn't illegal to transmit its ads, that the ads weren't damaging and that its software genuinely blocks such ads. It noted that the Messenger technology is now widely considered a serious security threat for home computer users and said its ads helped warn consumers their computers were at risk.

``While it may be annoying, if you get a pop-up on your screen it may cause you to address this problem,'' said Anthony J. Dain, one of D-Squared's lawyers. He described intrusive advertisements as ``annoyances you have to deal with in a free society.''

The FTC, however, compared D-Squared to vandals throwing bricks through windows to sell home-security systems. It said the company's founders ``desperately try to recast themselves as innocent public servants who merely hope to warn consumers about a security flaw.''

D-Squared's owners, Anish Dhingra and Jeffrey Davis, are students at the University of California in San Diego. Both were expected to testify in federal court next week and urge a judge to lift an order barring D-Squared from delivering more pop-up ads.

Their lawyer says the students are unlikely players in a court drama.

``They've never been in any kind of trouble before. They're good kids, nice individuals,'' Dain said. ``Obviously they're scared, anxious, nervous, but they're also angry. They don't think they've done anything wrong.''

Citing complaints from consumers, the FTC said that the ads disrupted some home computers and that most people don't know how to turn off the ads. FTC consumer protection chief Howard Beales called the company's practices ``high-tech extortion.''

D-Squared's lawyers complained to the judge that such talk was ``inappropriate and prejudicial.''

D-Squared's lawyers said consumers can find detailed turn-off instructions so easily on the Internet that it was ``inexcusable for the FTC to plant these shills before the court and instruct them to feign helplessness.''

The affected Messenger service _ unrelated to Microsoft's own instant-messaging software that uses the same name _ permits network administrators to display messages on a user's computer screen, such as a warning that a company's Internet connection is having problems.

Earlier this year, Microsoft warned customers about a security vulnerability in its Messenger technology that could allow hackers to seize control of a computer. It urged consumers to download and install a free repair patch from its Web site, and to consider disabling the Messenger service if they don't need it.

[HolyMoly]

I use Netscape 7.1 which blocks all pop-ups if you configure it that way. Love it.