Big Firms Fail to Police Adware, Report Says

Glut of Pop-Ups Laid to Lapses; Ad Firm CEO Says It's No Different From TV

Some of the biggest names in Internet advertising -- from Netflix to PeoplePC to GreetingCards.com -- not only are feeding into the annoying problem of pop-up ads but are also doing very little to keep their messages away from the self-installing software that fuels the pop-up ads, according to a report released yesterday by the Center for Democracy and Technology.

In many instances, computer users unintentionally install the advertising software -- known as adware -- when they respond to online solicitations, which rarely come from the advertisers themselves. The annoying ads, which are planted by a complicated web of ad companies and brokers that the advertisers use to help spread their messages online, tend to appear faster than computer users can close them and often lead to a computer slowdown, according to the report.

Netflix, which claims it is one of the top 10 online advertisers in the country, said the report's characterization of the company is unfair and that adware tactics are difficult to police.

"When the industry is affected by a problem trend, the largest participants are affected," said Netflix spokesman Steve Swasey. "We are very vigilant about this issue."

The report praised several firms, including America Online, Dell, Verizon and Major League Baseball, for having improved control over their advertising over the past year.

"Companies have to become more responsible" in addressing the adware problem, said Ari Schwartz, deputy director for the center, a group that advocates for consumer rights.

"In the past, we've had the attitude that advertisers should be aware of where their ads show up. Now, we're moving toward [the public] should know. We're naming names for the first time."

The others noted in the report for doing a poor job are NetZero, eHarmony, True.com, Perfectmatch, Club Med Americas, LetsTalk.com, uBid, ProFlowers, Altrec and Waterfront Media. Several of the companies, including NetZero and eHarmony, did not return calls for comment.

Schwartz said the larger the advertiser, the more difficult it is for a company to ensure that its online ads do not end up as adware. The online advertising industry often relies on brokers and sub-brokers who place the ads on specific Web sites or link them to software.

The Center for Democracy and Technology raised concerns with the Federal Trade Commission in January against one advertising software company, 180Solutions, for unfair and deceptive trade practices.

The report found that advertisers sometimes are unaware that their ads have been installed with software. But Keith Smith, 180Solutions' chief executive, said his company explicitly tells consumers that its free software contains advertisements.

"We object to the overall premise that consumers are duped into installing our software," Smith said. "It's no different from what's on television. People are paying for this content by agreeing to some ads."