D-Squared Solutions got a temporary reprieve December 15, when a federal judge in Baltimore ruled the California Internet advertising company could continue sending pop-up Web ads until complaints against them from the Federal Trade Commission are settled at trial. The ruling denied an FTC bid for a temporary injunction against D-Squared.
In early November, the FTC lodged a complaint charging D-Squared with what they called "high-tech extortion," accusing the company of improperly using technology built into Microsoft Windows to flash their pop-up ads – which usually (and perhaps ironically) advertised ad-blocking software.
U.S. District Judge Andre Davis ruled the FTC did not have sufficient evidence to warrant the preliminary injunction. "It's not clear to me… if there's substantial injury to consumers," the judge wrote. "The case had the odor of extortion as it was originally prosecuted, but it certainly doesn't look like extortion to me."
D-Squared typically peddles ad-blocking software at $25 to $30. The FTC practically accused the company and its creators of something approaching racketeering. “This is nothing more than a high-tech version of a classic scam,” said FTC Bureau of Consumer Protection director Howard Beales when the original November complaint was lodged. “The defendants created the problem that they proposed to solve – for a fee. Their pop-up spam wasted computer users’ time and caused them needless frustration.”
Lawrence G. Walters, an attorney who typically addresses First Amendment cases often involving adult entertainment, told AVN Online Davis's ruling showed the federal court "was obviously attempting to balance the free speech rights of advertisers with the valid consumer concerns announced by the FTC.
"The law surrounding online advertising is not well-established, and these can be difficult decisions for judges," Walters continued. "Consumers want the freedom and convenience of the Web, but are quick to be offended and complain when a company exploits that freedom, by creating bothersome advertising. Given (another) recent ruling in favor of pop-up advertising, it is starting to look like consumers may just have to find a way to live with this type of promotion – or buy a good pop-up killer program."
D-Squared pop-ups were said to have splashed users' screens as often as every ten minutes and, according to the FTC's original complaint, often resulted in computer crashes, lost data, and "frustration, annoyance, and harassment," as FTC attorney Mona Spivack told the Associated Press.
"They clearly knew that this practice was in fact causing consumers' computers to crash," Spivack told the news wire. "The defendant's own marketing material said this." D-Squared attorney Anthony Dain, however, told the wire owners Anish Dhingra and Jeffrey Davis, a pair of California college students, created the ads intending that only one a day would hit any given computer. "It's self-defeating to bombard," he said. "It doesn't make sense."
