CHICAGO, IL – New York-based “adware” company Direct Revenue LLC has settled a class action lawsuit brought by Stephen Sotolo of Lemont, Illinois in March of last year.Under the terms of the deal, which has received preliminary approval from a federal judge, Direct Revenue admits no guilt and accepts no liability, but “commits to certain policies regarding consumer notice and consent, most of which represent a continuation of current Direct Revenue practices,” according to a statement posted on the company’s website.
In addition to adhering to the business practices stipulated in the agreement, DirectRevenue must pay the plaintiff’s attorneys’ fees totaling $250,000 and other expenses totaling $50,000.
In the lawsuit filed last year, the plaintiff contended that Direct Revenue and other defendants named in the suit “who are either members or advertising supporters of the Internet ‘spyware’ industry, have unlawfully used and damaged Plaintiffs’ computers to make money for themselves, while willfully disregarding Plaintiffs’ rights to use and enjoy their personal property.”
Direct Revenue drew heat from the plaintiffs and other critics for allegedly initiating installation of its software through exploits, making its adware very difficult to remove via standard removal methods, bundling spyware/adware, and other deceptive business practices.
“Broadly speaking, the Agreement addresses the areas of consumer consent, privacy, and the provision of an intuitive opt-out option for consumers who do not wish to view advertisements,” Direct Revenue stated in a message posted to their website.
Among other things, the agreement specifically states that:
• Direct Revenue will not collect any personally identifiable information (name, address, social security number, email address, bank account information, etc.) about computer users, and to the extent that the company already possesses such data, “said data will be destroyed”.
• Direct Revenue will assure that, prior to the installation of the software, users are (a) provided with Direct Revenue’s End User License Agreement, and (b) given two choices, of “equal prominence within the modal box or landing page” to the effect of “I have read and accept the agreement” or “I do not accept the agreement,” and the “accept” option will not be the default.
• The company agrees not to install software “via ActiveX installations, security exploits, or by any other method that does not require the users’ affirmative consent.”
Several other provisions require that the company will disclose that their software serves pop-up ads, provide free help and detailed instructions on how to remove their software, and require “distributors” to abide by the policies set forth in the agreement.
Another requirement worthy of specific mention regards the software’s popping of ads for adult websites or other adult materials.
“The Software will not display adult content ads unless the user is viewing adult websites,” the agreement states. “DirectRevenue will disclose to NetNanny (and similar services) the IP address of any server sending adult content ads through the Software.”
Both sides of the dispute expressed satisfaction with the agreement.
“Illinois computer users now have the power of a federal court order on their side,” said Shawn Collins of The Collins Law Firm, co-counsel for the plaintiff. “If Direct Revenue goes back to the old way of doing business – whether on its own or with the help of unscrupulous partners – we will move immediately to see that the federal court order is enforced.”
“We are pleased with this settlement,” said Neal Klausner, from the law firm of Davis & Gilbert, who represented Direct Revenue. “We believe it is fair and reasonable for all parties. The settlement embraces the basic tenets of Direct Revenue’s current consumer policies. We believe it further validates my client’s commitment to leading its industry with regard to the important issues of consumer notice and consent.”
The settlement has received preliminary approval from Judge Virginia Kendall of the Northern District of Illinois in Chicago. Kendall will weigh final approval at a hearing scheduled for April 24th.
