Both the Federal Trade Commission and the State of Washington have sued Digital Enterprises, the parent company of Movieland, the news and entertainment download company, as well as three other corporate and two individual defendants in the state suit, with the feds targeting 11 companies altogether along with the same two individuals.
The companies named in the Washington State suit besides Movieland include Alchemy Communications, Inc., Accessmedia Networks, Inc. and Innovative Networks, Inc., all California corporations. The federal suit adds defendants Triumphant Videos, Inc. doing business as (d/b/a) Popcorn.net; Pacificon International, Inc. d/b/a Vitalix; Film Web, Inc.; Binary Source, Inc. d/b/a MoviePass.tv; Mediacaster, Inc. d/b/a Mediacaster.net; and CS Hotline, Inc.
In addition, both suits name Easton Herd, identified in the federal suit as "the sole officer and director of Defendants Digital Enterprises and Triumphant Videos," and Andrew Garroni, identified by the FTC as "an officer or director of Defendants Pacificon, Alchemy, Film Web and Binary Source."
Since the allegations in the lawsuits involve interstate commerce, it is unclear at this point what the status of the Washington State suit will be.
According to the FTC complaint, "Since at least the Fall of 2005, Defendants, individually and in concert, and through the mutual assistance of one another, have engaged in a nationwide scheme to use deception and coercion to extract payments from consumers. Defendants' putative business offers consumers membership to an Internet download service with content such as news, sports, games, and adult entertainment. This service supposedly uses software called a "download manager" that, once installed on a computer, will allow access to Defendants' download service. Defendants purport to market the software and download service with a three-day free trial offer."
But according to the complaint, the "download manager" isn't all consumers download from the defendants' sites.
"Installation of Defendants' download manager is merely a smokescreen concealing Defendants' true purpose: to install software and other files onto consumers' computers that enable Defendants to launch pop-up windows on consumers' computers demanding payments to Defendants. These pop-up windows, which display both textual and audiovisual payment demands, significantly disrupt consumers' use of their computers. After Defendants cause these pop-up payment demands to display on a particular computer for the first time, they cause them to redisplay again and again with ever-increasing frequency. To get these pop-ups to stop appearing, many consumers give in to Defendants' extortionate tactics and pay the Defendants."
Within the past week, the FTC has gone into the United States District Court for the Central District of California, Western Division, seeking a Temporary Restraining Order (TRO) to prevent the defendants from placing its programs on consumers' computers, but according to Felice, the government failed to secure such an order.
"The TRO was denied," Felice told AVN.com. "The next hearing will be in November for a preliminary injunction."
