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<b>Online Exclusive:</b> FTC Files Complaint in U.S. District Court in California Against Software Seller

By ALM Staff | Law Journal Newsletters |
September 06, 2006

The Federal Trade Commission ('FTC') in August filed a complaint in U.S. District Court, Central District of California, against Digital Enterprises for illegally installing software on consumers' computers. According to the complaint, the software that Digital and numerous corporate affiliates developed would generate pop-up messages that stated that the consumer had registered for a trial membership to Movieland.com, an Internet movie service. The messages would recur frequently, informing the consumer that he or she has not canceled the 'free trial service,' and thus must pay $29.95 to cancel the service and to end the receipt of the pop-up messages.

'Hundreds of consumers complained to the FTC,' said the agency in a written statement. 'Most claimed they never signed up for the 'free trial,' never used Movieland's services, and never heard of Movieland until they got their first demand for payment.'

The software was difficult for consumers to uninstall, according to the FTC. 'Consumers trying to remove it through the Windows Control Panel Add/Remove function were redirected to a Web page telling them that they had to pay the $29.95 fee to stop the pop-ups,' according to the agency.

A judge denied the FTC's request for a temporary restraining order against the company and affiliates Movieland.com, Triumphant Videos Inc., Pacificon International Inc., Vitalix, Alchemy Communications Inc., Accessmedia Networks Inc., Innovative Networks Inc., Film Web Inc., Binary Source Inc., Moviepass.TV, Mediacaster Inc., and CS Hotline Inc.

The Washington state attorney general also has filed suit against the same operators in King County Superior Court in Seattle. It is Washington's second lawsuit under the state's Computer Spyware Act, which prohibits, among other things, taking control of a user's computer; modifying security settings; and interfering with a user's ability to identify and remove the spyware.

The Federal Trade Commission ('FTC') in August filed a complaint in U.S. District Court, Central District of California, against Digital Enterprises for illegally installing software on consumers' computers. According to the complaint, the software that Digital and numerous corporate affiliates developed would generate pop-up messages that stated that the consumer had registered for a trial membership to Movieland.com, an Internet movie service. The messages would recur frequently, informing the consumer that he or she has not canceled the 'free trial service,' and thus must pay $29.95 to cancel the service and to end the receipt of the pop-up messages.

'Hundreds of consumers complained to the FTC,' said the agency in a written statement. 'Most claimed they never signed up for the 'free trial,' never used Movieland's services, and never heard of Movieland until they got their first demand for payment.'

The software was difficult for consumers to uninstall, according to the FTC. 'Consumers trying to remove it through the Windows Control Panel Add/Remove function were redirected to a Web page telling them that they had to pay the $29.95 fee to stop the pop-ups,' according to the agency.

A judge denied the FTC's request for a temporary restraining order against the company and affiliates Movieland.com, Triumphant Videos Inc., Pacificon International Inc., Vitalix, Alchemy Communications Inc., Accessmedia Networks Inc., Innovative Networks Inc., Film Web Inc., Binary Source Inc., Moviepass.TV, Mediacaster Inc., and CS Hotline Inc.

The Washington state attorney general also has filed suit against the same operators in King County Superior Court in Seattle. It is Washington's second lawsuit under the state's Computer Spyware Act, which prohibits, among other things, taking control of a user's computer; modifying security settings; and interfering with a user's ability to identify and remove the spyware.
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