Adware Firm Accuses 7 Distributors of Using 'Botnets'

The lawsuit alleges that the defendants -- Eric de Vogt of Breda, the Netherlands; Jesse Donohue of South Melbourne, Australia; Khalil Halel of Beirut; Imran Patel of Leicester, England; Zarox Souchi of Toronto; Youri van den Berg of Deventer, the Netherlands; and Anton Zagar of Trbovlje, Slovenia -- used botnets to install 180Solutions' software. The company has notified the FBI about its findings, but an FBI spokesman declined to say whether the agency was investigating the claims.

Five of the defendants were contacted by washingtonpost.com but have not responded to requests for comment.

180Solutions attorney Kevin Osborn said the company does not know exactly how many illegal installations the seven former affiliates were responsible for, but estimates that in all they were paid at least $60,000 during the weeks and months that they worked for the company.

Dealing With the 'Rogues'

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David DeLanoy, manager of partner development at 180Solutions, said the company's software is installed on about 20 million computers worldwide, but that so-called "rogue installs" account for just five percent of that user base. 180Solutions made more than $50 million in revenue last year through its software, which serves online advertisements for some of the nation's largest companies, including Cingular, Expedia.com, JP Morgan Chase, Monster.com and T-Mobile International.

But 180Solutions' estimates don't sit well with Ben Edelman, a PhD candidate at Harvard University who has documented the most egregious practices in the adware industry. (Edelman was hired in 2003 as an expert witness by The Washington Post Co. and other news outlets in their lawsuit against the Gator Corp. -- now Claria Corp. -- one of 180Solutions' biggest competitors. The media companies accused Gator of serving pop-up ads over the Web publishers' pages without their permission. Gator later settled the suit.)

"I'd estimate that more than half of [180Solutions'] 'users' have no idea they even have the software, let alone ever consented to installing it in the first place," Edelman said. "The company says in one breath that rogue installs account for just 5 percent of their user base, but they also say they have no real way of knowing which installs are legit, so I'm not sure how they could really draw that estimate."

Edelman said that if the companies do know which installations were fraudulent, it should already have devised a way to remove them.

"There is no reason for them to have waited this long, except to receive the revenue that those installs bring in," Edelman said.

Eric Howes, a spyware researcher at the University of Illinois at Urbana-Champaign, said 180Solutions is not only a major cause of the spyware and adware problem, but that it also is in a position to significantly clean up the problem.

Howes pointed to the turnaround in the past year of WhenU, once reviled for its aggressive adware installation tactics. Last year, for example, the company announced it would no longer allow partners to install its software through Microsoft ActiveX, a component of the Internet Explorer Web browser that adware company affiliates have long used to conduct illegal "drive-by" installations.

"WhenU pretty much put an end to the problem of sleazy installs of its software, so we know it can be done," Howes said. "180's enforcement division has really got to get up to speed, because I've seen no evidence they have a robust enforcement division, other than when they occasionally track down leads that people in the anti-spyware community hand to them."

DeLanoy said the company is putting new technologies in place that will allow it to better track how its software is installed and by whom, and ensure that users agree first. In the meantime, 180Solutions is using its ad-serving network to display pop-up notices warning customers that its software may have been installed on their computers without their consent and providing instructions on how to uninstall it.

Later this year, the company also will begin uninstalling its software from computers on which it has reason to believe that the software was installed in violation of the company's terms, DeLanoy said.

Changeip.com's Norris commended 180Solutions for its actions, but said the company and other adware vendors need to be far more aggressive in policing their affiliates.

"Right now there are a lot of people distributing their software like this and getting away scot-free, and every day we're seeing more and more people getting into this," Norris said.

Viruses and spyware have created a huge market for security software and services. At-home computer users invested more than $2.6 billion in software to protect their computers during the past two years, according to a study released this month by Consumer Reports. Even with those protections in place, however, consumers spent more than $9 billion on computer repairs and parts due to damage inflicted by viruses and spyware.