N.Y. settlement should have national impact, attorney says

John O'Brien Feb. 7, 2007, 3:54pm



ALBANY, N.Y. - When New York Attorney General Andrew Cuomo reached a settlement with three online advertisers hoping to prevent pop-up ads, he probably made no distinction that the ads would only stop popping up in his state, said the attorney who filed the first lawsuit of that kind.

"The New York Attorney General's office is a state agency, and that would not preclude a federal body -- like the Federal Trade Commission, for instance -- from going after the advertisers also," said David Fish of Illinois' Collins Law Firm. "I'm not aware of anything in the lawsuit that prevents that.

"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."

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. On Jan. 29, Cuomo called the settlement with those three companies "groundbreaking."

Critics also would call it "boundary-crossing" as it could be construed as the type of policy-setting that irks people such as Hans Bader.

In the Competitive Enterprise Institute's report on the 10 worst state attorneys general in recent history, Bader wrote, "Over the past decade, attorneys general have increasingly usurped the role of state legislatures and Congress by using litigation to impose interstate and national regulations and to extract money from out-of-state defendants."

In this case, though, there wasn't much money extracted. The three companies paid Cuomo's office only $100,000.

"It really was very small, and I think that there may be two things going on there," Fish said. "No. 1, maybe the New York Attorney General felt that he didn't have a very strong case or No. 2, and maybe related to it, the advertisers acted responsibly as soon as they saw their was a problem."

The case against DirectRevenue still is pending. Fish's class action case did not charge the other three companies for advertising through DirectRevenue like Spitzer did. Cuomo said in a press release that the companies were "turning a blind eye" to how their advertisements were being displayed.

"The spyware company is not going to make money if there aren't any advertisers to pay it," Fish said. "I think it's a smart strategy of the New York Attorney General. It really follows the money."

The Attorney General's office did respond to several messages seeking comment.

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