Cingular, Priceline, Travelocity settle adware suit

Cingular Wireless, Priceline.com, and Travelocity.com have settled with New York State's attorney general after the state accused them of contributing to the spread of adware.

The companies agreed to pay fines and take steps to help keep adware off users' PCs but did not admit guilt in the case. It marked the first time law enforcement had held advertisers responsible for ads delivered via adware, according to a statement by Attorney General Andrew Cuomo's office.

DirectRevenue actually installed the adware, which monitored users' Web activity and collected data they typed onto Web forms in addition to delivering ads, the attorney general's office said. The adware was very hard to remove from PCs, it alleged. The state sued DirectRevenue in April 2006 but found that the three big-name companies and others had paid the third party hundreds of thousands of dollars to have their ads delivered via adware, it said. The attorney general found the companies engaged in deceptive business practices.

"Advertisers can no longer insulate themselves from liability by turning a blind eye to how their advertisements are delivered," Cuomo said in a prepared statement.

Under the agreement reached Monday, the advertisers will have to ensure any company that delivers their ads online does the following:

-- discloses the name of any adware program and bundled software;

-- brands each ad with a prominent brand name or icon;

-- describes the adware and gets the user's consent to download and run it;

-- makes it practical for users to remove the adware;

-- obtains consent to keep sending ads to users who used to have the adware on their systems;

-- make their affiliates meet all these requirements.

The three companies also will make payments for penalties and investigatory costs, the state said: Priceline and Cingular will each pay $35,000 and Travelocity will pay $30,000.