Pop-up ad ban has major implications

On the surface, it doesn’t sound like much, but the agreement of Travelocity and Priceline to stop using a firm with pop-up ads in New York could have a national impact, say some sources.

The two online agencies agreed to cease using the ads as part of a settlement with New York State Attorney General Andrew Cuomo.

Priceline and Travelocity also agreed to pay $35,000 and $30,000, respectively, for investigative costs and penalties, although they did not admit any wrongdoing.

The assumption may have been that the ads would only stop popping up in his state, said the attorney who filed the first lawsuit of that kind.

“(But) it’s going to obviously affect places outside of New York. They’re not going to just stop advertising in New York. It really does have nationwide ramifications,” said David Fish.

Mr Fish earned an injunction more than a year ago against DirectRevenue LLC, providing that it stop its practice of designing adware for the purpose of advertising that is installed on a person’s computer without his or her consent.

Travelocity, Cingular and Priceline all advertised through DirectRevenue and were sued by then-Attorney General Eliot Spitzer. Last month, Mr Cuomo called the settlement with those three companies “groundbreaking.”

The case against DirectRevenue still is pending. Fish’s class action case did not charge the other three companies for advertising through DirectRevenue.

The two companies retained the right to use adware providers under certain pro-consumer guidelines, and it is believed they continue to employ other means, such as using their own Web servers, to place ads.

The attorney general had charged that Priceline and Travelocity engaged in deceptive business practices by contracting with Direct Revenue, a New York-based adware company that allegedly monitored consumers’ surfing habits without adequate notice and consent.

Priceline and Travelocity can continue to use adware partners under certain guidelines.

Adware firms must obtain the consent of new and existing users to download their programs, identify all programs bundled with their downloads and give consumers an easy option to remove adware.

Direct Science, a firm not connected to Direct Revenue, estimates that 13% of all online advertising in 2005 fell into the “behavioral targeting” category, which includes adware practices.

The theory is that monitoring consumers’ Internet behavior — by tracking their visits to travel sites, for instance — facilitates the delivery of online ads that increase conversion.

Adware firms generally offer free software to consumers or contract with software companies, and then bundle adware programs into the download, often without consumers’ knowledge.

Report by David Wilkening