Adware Vendor Sued by New York Attorney General

New York v. Intermix Media (complaint filed April 28, 2005). Elliott Spitzer has sued software vendor Intermix Media (formerly eUniverse) for violations of New York’s consumer protection act, false advertising and common law trespass to chattels based on Intermix’s “spyware/adware.” New York press release. AP story.

The complaint focuses on Intermix Media’s bundling of adware with other software (games, utilities, etc.). Specifically, the complaint alleges:

“Intermix offers consumers either no notice or only token notice about the hidden spyware programs. Intermix either fails to disclose these additional programs in any manner, or hides mention of them deep within lengthy, legalistic license agreements. Even in the latter case, the information Intermix does provide about the spyware programs is vague, incomplete and often factually incorrect….. In every single test, Intermix provided either no notice or woefully insufficient notice about Intermix’s bundled spyware programs.”

The complaint also targets the ways in which Intermix allegedly intentionally made it difficult to figure out how to uninstall the program.

This case is important because it might help define the line about how much disclosure is sufficient. Right now the law is extremely unclear; even the New York complaint lumps together no disclosure and inadequate disclosure, and in my mind these are two very different standards. Failing to disclose means no one would understand; inadequate disclosure depends on the consumer, their expectations, and how much responsibility the consumer has to figure things out for themselves. As I’ve discussed before, part of the problem is that software vendors have to make a long list of disclosures, so the disclosures will never be easy for consumers to understand. As Deirdre Mulligan has claimed, even full disclosure doesn’t necessarily change behavior. So more clarity on the applicable legal standards for disclosure would be useful, but I’m not immediately convinced by the complaint that NY is drawing the line in the right place.

This case may also reinforce that Congressional action may be neither necessary or prudent. If states can enforce their current consumer protection laws, then Congress getting into the act (especially through rigid command-and-control laws like HR 29) adds little value. Even if NY loses the case, the mere fact that the case was brought indicates that the current law can be used to combat bad actors when they are engaged in bad behavior.

UPDATE: Wendy Seltzer on the lawsuit.

UPDATE #2: CBS Marketwatch (reigstration required) reports that Spitzer may be planning more lawsuits against adware vendors, adware distributors and potentially advertisers/revenue sources.

UPDATE #3 (10/21): The formal settlement was finally announced.

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