New York Sues Internet Marketing Firm

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New York Attorney General Eliot Spitzer filed a civil suit against a major Internet marketing firm Thursday, claiming the company installed spyware and adware onto millions of PCs and bombarded users with ubiquitous pop-up ads.

The suit, filed in New York City, charges Los Angeles-based Intermix Media with installing a wide range of advertising software on personal computers nationwide and directing computer users to its own Web site. The site downloaded extra toolbar items and delivered a flurry of pop-up ads to unsuspecting PC users.

"These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers' efforts to remove them from their computers. These issues can serve to be a hindrance to the growth of e-commerce," Spitzer said in a statement.

The suit, the result of a six-month investigation, also claims the company operates at least 10 separate Web sites from which Intermix or its agents were downloading spyware, providing either no warning or other misleading disclosures.

Among those mentioned in the case are: mycoolscreen.com, cursorzone.com and flowgo.com.

Other programs placed advertising "toolbars" on users' screens, Spitzer said.

In a statement released by Intermix shortly after the charges were filed, the company admitted to several dubious practices but chose to blame previous management for the policies.

"Intermix does not promote or condone spyware, and remains committed to putting this legacy issue behind it as soon as practicable," the statement read. "Many of the practices being challenged were instituted under prior leadership, and Intermix has been voluntarily and proactively improving these applications and related consumer disclosure and functionality for some time."

Spitzer said Intermix downloaded more than 3.7 million programs to New Yorkers alone, and tens of millions more to users across the nation.

The suit against Intermix falls under the General Business Law provisions against false advertising and deceptive business practices, according to Spitzer's office. He also accuses the company of trespass under New York common law.