Two separate class action lawsuits were filed on April 20, 2007 against Commission Junction, BeFree and ValueClick. One names CJ and BeFree publishers (affiliates) as the plaintifs. The other names CJ and BeFree merchants as the plaintiffs. So what do these lawsuits center around? Adware.

The lawsuits allege breach of contract, negligence and unfair business practices on CJ/BF’s part by allowing adware affiliates to operate within their Network. The gist of it seems to be that CJ/BF has knowingly allowed adware affiliates within their Network which commit commission theft and fraudulent transactions through adware applications. The suit is seeking monetary damages to both affiliates and merchants. More importantly, in my opinion, they are seeking a change in ValueClick’s corporate policy related to adware and compliance. 

I’ve always hoped that Networks would wise up by implementing fair business practices and enforcing them. My views on the subject matter certainly aren’t an Industry Secret. Unfortunately, the changes haven’t happened. As I was thinking about this, I realized that the adware issues have been ongoing for 6 or 7 years now. Wow, time certainly does go by quickly. It probably hasn’t been a matter of if such a lawsuit would be brought against someone, but a matter of when. Well, it looks like the “when” is now here.

How this may impact the Industry as a whole, well I just don’t know. It’s certainly bound to shake some things up. And I can’t imagine that other Networks aren’t going to be watching this case closely. I can only hope this will result in some real postive change within the Industry. 

You can find more information on the case here.
A copy of the affiliate claim is here and a copy of the merchant claim is here.

As we feel these cases are important specifically to the affiliate marketing industry, more so than any other case related to adware/spyware to date, we will be dedicating a special area of this blog to information on these lawsuits as they progress. We will limit the posting to official sources and will avoid commentary and speculation.

On May 9, 2007, CJ updated the Code of Conduct with little fanfare. Indeed, I’m not sure if they even made any type of announcement regarding the update. They may have an announcement through the Publisher interface if you are logged into your CJ account, but I can’t verify if they did or didn’t do that since my CJ account was terminated a couple of weeks ago. But that’s another story. There’s seems to be very little talk about the updated Code of Conduct (COC), so either many are not aware of the change or people don’t care about the change. The changes are rather interesting and abiding by the COC is part of the Publisher TOS, so it’s probably good to be aware of the changes. (more…)

Over the last couple of weeks there have been rumors that ValueClick would be a target of an FTC investigation regarding web properties owned by ValueClick which promote gratis offers. ValueClick denied any knowledge of any such investigation during their last earnings call. Those rumors of an FTC have now become a reality.

The SEC 8-K filings mentioned in the above news article can be found here. Government investigations of certain types of cpa offers and the manner in which they are marketed don’t seem to be limited to just ValueClick at the moment. It will be interesting to see how this develops as these types of offers are certainly big business for more than just ValueClick.

Are you paying people who are members of organized crime or political extremist groups? Are you financially supporting criminals? I posted back in February that this was a developing story. At last it is here. The recording of Wayne Porter and Chris Boyd’s presentation at RSA2007. As a Network, Merchant, Manager, OPM or Affiliate why should you care about botnets, let alone the security folks who are chasing them?

Because this Industry is helping to fund them, from the hackers who own the botnet rings and are installing scripts to fill out lead gen forms to the adware applications they are installing through the botnets. And the money trail can lead to some pretty unsavory places.   

Listen and watch the presentation.
Botnet Live: Tracing, Chasing and Building the Case to Bust the Bad Guys

Can we continue to remain complacent? Apathetic? Are the standards in the Industry how much money someone is making regardless of how it’s being made?

Go ahead take the time to watch the presentation. Be prepared to have an eye opening experience about some of the things going on out there.

FTC Press Release

The settlement calls for $1.5 million to be paid in fines for questionable installation and removal tactics of the DirectRevenue adware. There are also clauses regarding how the adware can be distributed in the future as well as ads being displayed through “legacy” installations.

The Commission vote to accept the settlement was 4-1. The dissenting vote came from Jon Leibowitz (who has publicly called for the reporting of advertisers using adware to shame those financially supporting adware) on the grounds he felt the monetary fines were to little, as DirectRevenue as profitted by more than $20 million.

Public comments are open to the FTC until March 21, 2007.

Developing Story

 So where are the real threats in the world of adware, malware and spyware? Wayne Porter has been stringing me along for weeks now about the contents of his upcoming coming presentation at RSA. I just got an IM from him, clueing me in on what he and Chris Boyd (PaperGhost to the security world) laid out during their presentation. Hold on to your hats folks, it’s going to be a bumpy ride…. (more…)

The Internet is abuzz with Zango’s (formerly 180Solutions) announcement that a class action lawsuit filed against them last year was dismissed with prejudice in Federal Court.  The first statements in Zango’s press release: (more…)