FTC threatens public humiliation for spyware advertisers

Since nothing seems to stanch the flow of spyware, FTC Commissioner Jon Leibowitz is proposing an age-old punishment - public humiliation, News.com reports. "I think that could have a beneficial effect," Leibowitz said. "In this context, maybe shaming a company on how they are spending money might inure to the benefit of consumer's privacy."

The FTC would publicly announce and publish the name of a company that advertises using adware that installs itself surreptitiously on consumer PCs or by using spyware, Leibowitz said. He would recommend publicly shaming advertisers to the other FTC commissioners if the adware problem doesn't decrease, he said.

An AOL said public outing is already happening on the net and in the press.

"Increasingly advertisers are recognizing that this is not a minor issue," [AOL VP Jules] Polonetsky said. "There is already an environment out there where prominent advertisers' missteps are being written about."

AOL has a policy not to advertise using adware. To maintain that policy, the company has to keep close tabs on those companies that handle its advertising, Polonetsky said.

"If you simply rely on a policy that you announce or simply rely on a promise from your partner, you invariably will be burned," he said. "In today's networked world you have to do due diligence to ensure your brand does not show up in an offensive location."

A big issue is the use of contractors and subcontractors to handle online advertising campaigns. Brand name companies may not always know or manage exactly how their ad money gets spent.  Take for instance, AzoogleAds, which delivers ads for eBay, Netflix and several other brand names. 

AzoogleAds used to display many of its ads through adware, including software from WhenU. Today it is limiting that to 5 percent of all ads it serves up, still including WhenU, said Don Mathis, AzoogleAds' chief operating officer.

"Advertisers rely on us to provide this service for them," Mathis said. "Two years ago nobody ever thought about adware, but everything from enforcement action to legislation has raised the profile of the risk and liability associated with it."

Shaming advertisers is the right answer, Mathis said. "It would not hurt our customers, the legitimate players. This was a grey area for five years; the grey is now being separated into black and white."

Aside from public humiliation for the advertisers, the adware and spyware companies also face the wrath of the FTC. Commission Chairman Deborah Platt Majoras, in a speech at the Anti-Spyware Coalition event earlier on Thursday, said the FTC would win the battle against adware and spyware.

"The dissemination of harmful, unremovable programs that frustrate consumers' ability to control their own computers is digital carjacking, and we intend to vigorously prosecute it," Majoras said.