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Inc. 500 Firm Accused of 'Illegal and Deceptive' Practices

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Jan. 24, 2006--180solutions, a fast-growing online adware firm that appeared on the 2005 Inc. 500 list, "deliberately and repeatedly" duped Internet users into installing unwanted advertising software, according to a complaint filed Monday with the Federal Trade Commission.

The Center for Democracy and Technology, an online watchdog group that worked with 180solutions over the past two years to help it re-organize its business model, is now seeking an injunction to prevent the Bellevue, Wash.-based firm from pursuing "illegal and deceptive practices."

The 91-page complaint detailed numerous examples in which 180solutions' ad-serving software was allegedly downloaded on users' computers without their permission -- including through a worm on AOL's Instant Messenger as recently as Jan. 6.

Once installed, the software, which 180solutions distributes on its website and through a network of more than 1,000 affiliates, tracks users' online movements, triggering ads based on the types of sites visited.

Separate online services offering to remove the software are now sprouting up all over the Internet.

"180solutions and its affiliates have caused immeasurable harm, not just to individual Internet users, but to the Internet itself," Ari Schwartz, CDT's deputy director, said in a statement. "This company's brazen distribution practices saddle innocent Internet users with intrusive software that they neither want nor need, and contribute to a general sense of wariness and distrust that threatens to stifle the growth of the medium," Schwartz said.

The group also filed a separate complaint against CJB.NET, one of 180solutions' long-time distributors.

In a statement posted on the company's blog Monday morning, 180solutions said it had yet to review the complaint, but added it shared CDT's vision of protecting the rights and privacy of consumers on the Internet. "This shared vision has resulted in a healthy working relationship that has seen great progress in the fight against spyware and benefited customers around the world."

Last year, 180solutions filed lawsuits against some of its own affiliates charged with installing the software without consent.

In October 2005, the company ranked No. 7 on the Inc. 500 list of the nation's fastest-growing private companies, with a three-year growth rate of 5,418.7% and revenue of $53.6 million in 2004. It also ranked No. 32 the previous year.

A January 2006 Inc. editor's note addressed concerns over 180solutions. "Inc. reserves the right to withhold a listing on the Inc. 500 if we have concerns about a company's business practices.... We took a hard look at 180solutions, and because at the time it seemed the company was taking steps to address the concerns we raised, we decided to give it the benefit of the doubt," the note said.




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