FTC settles with pop-up ad 'spammers'

WASHINGTON -- A California company allegedly using a barrage of pop-up ads to sell pop-up blocking software is blocked from employing that tactic in the future under a settlement announced Monday by the U.S. Federal Trade Commission (FTC).

D Squared Solutions LLC, based in San Diego, allegedly used the Microsoft Windows feature Windows Messenger Service to send pop-up ads to computer users. The pop-up ads appeared as frequently as every 10 minutes in the forefront of consumers’ screens, caused consumers to lose data and work productivity, caused applications to freeze, and caused some computers to crash, according to the FTC.

D Squared Solutions was trying to sell software by creating a problem the software supposedly fixed, said Mona S. Spivack, an FTC staff attorney. "We alleged that they were essentially attempting to coerce consumers into buying their pop-up blocking software," she said.

Phone calls to D Squared Solutions early Monday went unanswered.

The settlement, signed by the FTC in late July, bars the defendants from sending Windows Messenger Service pop-up advertisements, selling Windows Messenger Service pop-up blocking software, or selling Windows Messenger Service pop-up sending software. It also prohibits the defendants from using instant message advertising, requires them to provide opt-out mechanisms for other kinds of Internet advertising, and bars them from using deceptive return addresses in their e-mail and other advertisements.

In October 2003, the U.S. District Court for the Northern District of Maryland temporarily halted D Squared Solutions' pop-up advertising at the request of the FTC.

The FTC accused the defendants of using the Windows Messenger Service feature, typically used to provide messages about such things as completed print jobs or system shut-downs, to harass consumers with ads for their Windows Messenger Service pop-up blocking software. The defendants' messages advertised software costing $25 to $30 that would supposedly block future pop-up ads, according to the FTC. D Squared Solutions sold the software through Web sites such as Bustpopups.com, Messengerstopper.com, and Saveyourprivacy.com, according to an FTC complaint.

The defendants placed their pop-up ads near the center of users’ computer screens, blocking their work. The ads appeared as long as the users were connected to the Internet, causing problems for computer users with always-on connections, such as DSL (digital subscriber lines) or cable modems.

These users continued to receive the pop-ups, even when they were not actively surfing the Internet and were working in other applications such as word processing or spreadsheet programs, according to the FTC. The agency also alleged that the defendants sold or licensed their pop-up-sending software to other people, enabling others to use the same marketing scheme to send millions of additional pop-ups.

Several Web sites have cropped up that offer computer users instructions on how to shut down the Windows Messenger Service as a way to stop pop-up ads.

The FTC charged that pop-up advertising practices violated the FTC Act, which prohibits unfair business practices. The settlement announced Monday ends litigation against D Squared Solutions, LLC, and its principals, Anish Dhingra and Jeffrey Davis, both of San Diego.