FTC Chief: Adware Beware

In the past year, the Federal Trade Commission reached settlements with spammers, adware distributors and Sony BMG Music Entertainment over its distribution of rootkit software. FTC Chairwoman Deborah Platt Majoras recently talked to Robert McMillan to discuss online advertisers’ role in the adware and spyware.

CSO: Money is making its way to U.S.-based spyware vendors, hosting providers and advertisers. What can the FTC do?

Deborah Platt Majoras: I spoke [recently] to a corporate council. I told them that corporate America ought to do a better job of figuring out where their ad dollars are going. Because what we think is that some of the ad dollars are making their way to adware providers who may be providing the software without the consumer’s knowledge and consent. And these companies may not even know about it.

If I were a company, I wouldn’t think that having a consumer bombarded with pop-up ads advertising my product would be a great way to sell.

We want companies to have a better understanding of where these advertising dollars are going, so in a couple of our high-profile spyware cases, like the one against Zango [a $3 million settlement], we tried to be very public.

You settled with Sony over its use of rootkit technology. Do you expect more conflicts between intellectual property and end users’ rights?

It’s not that [Sony] endeavored to protect their intellectual property, which they’re entitled to do, it’s that they didn’t tell consumers what they were doing. We felt that how a consumer could use the CDs, where the music could be played ultimately, and whether or not their habits were being monitored, those were things that consumers would want to know about before they made their purchase. As we look at principles that we’re applying in spyware and the like, the first principle is that the computer belongs to the user, not to the software distributor.