Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8161 

1The comment must be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See 

Commission Rule 4.9(c), 16 CFR 4.9(c). 

FEDERAL RESERVE SYSTEM 

Formations of, Acquisitions by, and 

Mergers of Bank Holding Companies 

The companies listed in this notice 

have applied to the Board for approval, 

pursuant to the Bank Holding Company 

Act of 1956 (12 U.S.C. 1841 et seq.) 

(BHC Act), Regulation Y (12 CFR Part 

225), and all other applicable statutes 

and regulations to become a bank 

holding company and/or to acquire the 

assets or the ownership of, control of, or 

the power to vote shares of a bank or 

bank holding company and all of the 

banks and nonbanking companies 

owned by the bank holding company, 

including the companies listed below. 

The applications listed below, as well 

as other related filings required by the 

Board, are available for immediate 

inspection at the Federal Reserve Bank 

indicated. The application also will be 

available for inspection at the offices of 

the Board of Governors. Interested 

persons may express their views in 

writing on the standards enumerated in 

the BHC Act (12 U.S.C. 1842(c)). If the 

proposal also involves the acquisition of 

a nonbanking company, the review also 

includes whether the acquisition of the 

nonbanking company complies with the 

standards in section 4 of the BHC Act 

(12 U.S.C. 1843). Unless otherwise 

noted, nonbanking activities will be 

conducted throughout the United States. 

Additional information on all bank 

holding companies may be obtained 

from the National Information Center 

website at www.ffiec.gov/nic/. 

Unless otherwise noted, comments 

regarding each of these applications 

must be received at the Reserve Bank 

indicated or the offices of the Board of 

Governors not later than March 22, 

2007. 

A. Federal Reserve Bank of Chicago 

(Patrick M. Wilder, Assistant Vice 

President) 230 South LaSalle Street, 

Chicago, Illinois 60690-1414: 

1. C–B–G, Inc., West Liberty, Iowa; to 

acquire additional voting shares of 

Washington Bancorp, Washington, 

Iowa, for a total exceeding 25 percent, 

and thereby indirectly acquire voting 

shares of Federation Bank, Washington, 

Iowa. 

2. Community State Bank Employee 

Stock Ownership Plan and Trust, Union 

Grove, Wisconsin; to increase its 

ownership of Union Bancorporation, 

Inc., Union Grove, Wisconsin, to 35.52 

percent of the voting shares, and thereby 

increase its indirect ownership of 

Community State Bank, Union Grove, 

Wisconsin. 

Board of Governors of the Federal Reserve 

System, February 20, 2007. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. E7–3096 Filed 2–22–07; 8:45 am] 

BILLING CODE 6210–01–S 

FEDERAL TRADE COMMISSION 

[File No. 052 3131] 

DirectRevenue LLC, DirectRevenue 

Holdings LLC, Joshua Abram, Daniel 

Kaufman, Alan Murray, and Rodney 

Hook; Analysis of Proposed Consent 

Order To Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint and the terms of the 

consent order—embodied in the consent 

agreement—that would settle these 

allegations. 

DATES: Comments must be received on 

or before March 21, 2007. 

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to 

‘‘DirectRevenue LLC, et al., File No. 052 

3131 to facilitate the organization of 

comments. A comment filed in paper 

form should include this reference both 

in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, 

Room 135–H , 600 Pennsylvania 

Avenue, NW., Washington, DC 20580. 

Comments containing confidential 

material must be filed in paper form, 

must be clearly labeled ‘‘Confidential,’’

and must comply with Commission 

Rule 4.9(c). 16 CFR 4.9(c) (2005).1 The 

FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments that do not 

contain any nonpublic information may 

instead be filed in electronic form as 

part of or as an attachment to e-mail 

messages directed to the following email box: consentagreement@ftc.gov. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

http://www.ftc.gov. As a matter of 

discretion, the FTC makes every effort to 

remove home contact information for 

individuals from the public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, at http://www.ftc.gov/ 

ftc/privacy.htm. 

FOR FURTHER INFORMATION CONTACT: 

Mamie Kresses (202/326–2070) or 

Stacey Freguson (202/326–2361), 

Bureau of Consumer Protection, 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and § 2.34 of the Commission 

Rules of Practice, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis to Aid Public Comment 

describes the terms of the consent 

agreement, and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

Home Page (for February 16, 2007), on 

the World Wide Web, at http:// 

www.ftc.gov/os/2007/02/index.htm. A 

paper copy can be obtained from the 

FTC Public Reference Room, Room 130- 

H, 600 Pennsylvania Avenue, NW., 

Washington, DC 20580, either in person 

or by calling (202) 326–2222. 

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. All comments 

should be filed as prescribed in the 

ADDRESSES section above, and must be 

received on or before the date specified 

in the DATES section. 

Analysis of Agreement Containing 

Consent Order To Aid Public Comment 

The Federal Trade Commission has 

accepted, subject to final approval, an 


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8162 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 

agreement containing a consent order 

from proposed respondents 

DirectRevenue LLC, DirectRevenue 

Holdings LLC, Joshua Abram, Daniel 

Kaufman, Alan Murray, and Rodney 

Hook, individually and as officers of 

DirectRevenue LLC (together, ‘‘the 

respondents’’). The proposed consent 

order has been placed on the public 

record for thirty (30) days for receipt of 

comments by interested persons. 

Comments received during this period 

will become part of the public record. 

After thirty (30) days, the Commission 

will again review the agreement and the 

comments received, and will decide 

whether it should withdraw from the 

agreement or make final the agreement’s 

proposed order. 

General Allegations 

The respondents develop, market, and 

distribute via Internet downloads 

advertising software programs 

(‘‘adware’’)—including programs with 

the names Aurora, Ceres, A Better 

Internet, OfferOptomizer, Twaintec, and 

Best Offers—that monitor consumers’

Internet use in order to display targeted 

pop-up ads. This matter concerns 

allegations that the respondents: (1) 

Directly, and through a network of 

numerous affiliates and sub-affiliates, 

installed their adware on consumers’

computers without adequate notice or 

consent; (2) through affiliates and subaffiliates, installed their adware on 

consumers’ computers entirely without 

notice or authorization; and (3) made 

their adware difficult for consumers to 

identify, locate, and remove. 

The Commission’s complaint alleges 

that in numerous instances the 

respondents, either directly or through 

their affiliates and sub-affiliates, 

purported to offer content to the public, 

such as games, screen-savers, peer-topeer file sharing software, and/or 

computer utility programs (‘‘lureware’’) 

and bundled the respondents’ adware 

with that content. The complaint further 

alleges that consumers often have been 

unaware that the respondents’ adware 

would be installed on their computers 

because it was not adequately disclosed 

to them that downloading the lureware 

would result in installation of the 

respondents’ adware. Often, no 

reference to the adware was made on 

Web sites offering the lureware or in the 

install windows. In other instances, 

information about the effects of the 

respondents’ adware could only be 

ascertained, if at all, by clicking on one 

or more inconspicuous hyperlinks to 

reach multi-page user agreements 

containing such information. These 

inconspicuous hyperlinks were located 

in the corner of Web site homepages or 

in modal boxes provided by the 

computer’s operating system. 

The Commission’s complaint also 

alleges that in numerous instances, the 

respondents, through affiliates and subaffiliates, installed the respondents’

adware on consumers’ computers 

entirely without notice or authorization. 

The complaint cites as an example 

unauthorized installations conducted by 

the respondents’ sub-affiliate, Seismic 

Entertainment Productions, Inc., via an 

executable file that exploited a 

vulnerability in Windows Media Player. 

The Commission’s complaint further 

alleges that the respondents made 

identifying, locating, and removing their 

adware extremely difficult for 

consumers. Among other practices, the 

respondents: failed to identify the name 

or source of the adware in pop-up ads 

to enable consumers to locate the 

adware on their computers; stored 

adware files in locations on consumers’

hard drives that are rarely accessed by 

consumers, such as in the core systems 

software folders; failed to list the 

adware in the Windows Add/Remove 

utility (a customary location for userinitiated uninstall of software 

programs); where the adware was listed 

in the Windows Add/Remove utility, 

listed it under names resembling core 

systems software or applications; 

installed technology on consumers’

computers to reinstall the adware when 

it had been uninstalled by consumers 

through the Windows Add/Remove 

utility or deleted by anti-spyware or 

anti-adware programs; and when a 

separate uninstall tool was provided, 

required consumers to follow a ten-step 

procedure including downloading 

additional software and deactivating 

firewalls, thereby exposing computers to 

security risks. 

Deception Allegation 

The Commission’s complaint alleges 

that by offering content over the Internet 

such as browser upgrades, utilities, 

games, screensavers, peer-to-peer file 

sharing software and/or entertainment 

content, without disclosing adequately 

that this content was bundled with the 

respondents’ adware, the respondents 

committed a deceptive practice. The 

bundling of the respondents’ adware, 

which monitors consumers’ Internet use 

and causes them to receive pop-up 

advertisements, would be material to 

consumers in their decision whether to 

download the other software programs 

and/or content. 

Unfairness Allegations 

The Commission’s complaint also 

alleges that it was an unfair practice for 

the respondents to install on consumers’

computers, entirely without their 

knowledge or authorization, adware that 

could not be reasonably identified, 

located, or removed by consumers. In 

addition, the complaint alleges that it 

was an unfair practice, in and of itself, 

for the respondents not to provide 

consumers with a reasonable means to 

identify, locate, and remove the 

respondents’ adware from their 

computers. The complaint further 

alleges that these practices have caused 

or are likely to cause substantial 

consumer injury that is not reasonably 

avoidable by consumers themselves and 

not outweighed by benefits to 

consumers or competition. 

The Proposed Consent Order 

The proposed consent order contains 

provisions designed to prevent the 

respondents from engaging in similar 

acts and practices in the future and to 

halt continuing harm caused by the 

respondents’ prior unlawful practices. 

Part I of the proposed order prohibits 

the respondents from displaying any 

advertisement to, or otherwise 

communicating with, any consumer’s 

computer on which the respondents’

adware was installed prior to October 1, 

2005 (‘‘legacy program’’). Part I permits 

the respondents, within thirty days of 

entry of the final order, to send a 

maximum of three notices to legacy 

program users informing them: that, 

pursuant to the FTC settlement, they 

will no longer receive any advertising or 

communication from the respondents; 

how they may affirmatively authorize 

the respondents to continue serving 

advertisements if consumers so choose; 

and how they may fully remove the 

respondents’ adware from their 

computers. If consumers fail to respond 

to the notice, the adware will remain 

inactive. 

Parts II and III prohibit the 

respondents from, or assisting others in, 

installing software onto any computer 

by exploiting security vulnerabilities or 

downloading or installing any software 

program or application without 

consumers’ express consent. ‘‘Express 

consent’’ is defined in the proposed 

order to require clear and prominent 

disclosure of material terms prior to and 

separate from any end user license 

agreement, and to require consumer 

activation of the download or 

installation by clicking a button or a 

substantially similar action. 

Part IV requires the respondents to 

establish, implement, and maintain a 

clearly disclosed, user-friendly 

mechanism through which consumers 

can report and the respondents can 

timely address complaints regarding the 

respondents’ practices. 


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Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8163 

2On a separate note, I want to commend the New 

York Attorney General’s office for its recent groundbreaking settlements—which included monetary 

relief—with Priceline, Travelocity, and Cingular 

Wireless in the context of its litigation against 

DirectRevenue. Among other things, the settlements 

require the companies to do due diligence before 

advertising via adware, and periodically follow up 

to see how their online ads are being delivered. 

These settlements are important because advertising 

dollars fuel the demand side of the nuisance adware 

problem by giving companies like DirectRevenue 

and their affiliates and sub-affiliates the incentive 

to expand their installed base, with or without 

consumers’ consent. 

3See, e.g., Brad Stone, Invasion of the PC 

Snatchers, Newsweek (Dec. 13, 2006), available at 

http://www.msnbc.msn.com/id/6653413/site/ 

newsweek/. 

Part V requires the respondents to 

establish, implement, and maintain a 

comprehensive program that is 

reasonably designed to require affiliates 

to obtain express consent before 

installing the respondents’ software 

onto consumers’ computers. Part V also 

contains sub-parts mandating certain 

measures the respondents must take to 

monitor their distribution network. 

Part VI requires the respondents to 

identify advertisements served via the 

respondents’ adware in order for 

consumers to easily locate the source of 

the advertisement, easily access the 

respondents’ complaint mechanism, and 

access directions on how to uninstall 

such adware. 

Part VII requires the respondents to 

provide reasonable and effective means 

for consumers to uninstall the 

respondents’ adware. 

Part IX requires the respondents to 

pay $1.5 million to the Commission. 

This payment may be used in the 

Commission’s sole discretion to provide 

appropriate relief, which may include, 

but is not limited to, the recision of 

contracts, payment of damages, and/or 

public notification respecting such 

unfair or deceptive acts or practices. If 

the Commission determines that such 

relief is wholly or partially 

impracticable, any or all such funds 

shall be paid to the United States 

Treasury. 

Part X requires the respondents to 

cooperate with the Commission in this 

action or any subsequent investigations 

related to or associated with the 

transactions or the occurrences that are 

the subject of the Complaint. 

The remaining order provisions 

govern record retention (Part VIII), order 

distribution (Part XI), ongoing reporting 

requirements (Parts XII and XIII), filing 

a compliance report (Part XIV). Part XV 

provides that the order will terminate 

after twenty (20) years under certain 

circumstances. 

The purpose of this analysis is to 

facilitate public comment on the 

proposed order, and it is not intended 

to constitute an official interpretation of 

the agreement and proposed order or to 

modify in any way their terms. 

By direction of the Commission, 

Commissioner Leibowitz dissenting. 

Donald S. Clark, 

Secretary. 

Dissenting Statement of Commissioner 

Jon Leibowitz 

In this consent agreement, 

Commission staff obtained strong 

injunctive relief that will put an end to 

practices that allowed DirectRevenue to 

foist unwanted software on untold 

millions of consumers. The injunctive 

provisions, like those in Zango, Inc., 

f/k/a 180 Solutions, Inc., will serve as a 

model to adware companies in future. 

But the $1.5 million in monetary relief 

that the Commission obtained as part of 

the consent agreement is a 

disappointment because it apparently 

leaves DirectRevenue’s owners lining 

their pockets with more than $20 

million from a business model based on 

deceit. Ben Elgin with Brian Grow, The 

Plot To Hijack Your Computer, Business 

Week Online, available at http:// 

www.businessweek.com/magazine/ 

content/06_29/ 

b3993001.htm?chan=search (July 17, 

2006). 

According to the Commission’s 

complaint, DirectRevenue downloaded 

adware on consumers’ computers—in 

many cases without notice and consent. 

In other instances, to entice consumers 

into downloading its nuisance adware 

that plagued consumers’ computers 

with pop-ups, it even bundled the 

adware with software that was supposed 

to block pop-ups—the height of 

cynicism and disingenuousness. 

Moreover, the respondents went to great 

lengths to ensure that consumers could 

not uninstall this unwanted software, 

even employing ingenious (and 

malicious) technologies such as code 

that would reinstall it if the consumer 

attempted to remove it. 

Even apart from the hundreds of 

thousands of hours people spent closing 

all of these pop-up ads, how many 

people lost important data because 

respondents’ malware crashed their 

computer? How many people fruitlessly 

spent time trying to uninstall it? How 

many people junked perfectly good 

computers that were so burdened with 

unwanted adware that they were 

useless? One consumer captured the 

frustration and anger that consumers no 

doubt felt as they tried to deal with 

DirectRevenue’s malware: ‘‘ ‘You people 

are EVIL personified,’ Kevin Horton 

wrote* * * ‘I would like the four hours 

of my life back I have wasted trying to 

get your stupid uninvited software off 

my now crippled system.’ ’’ The Plot To 

Hijack Your Computer, supra. Given the 

number of unwitting DirectRevenue 

‘‘customers’’—according to the New 

York Attorney General’s complaint there 

were more than 150 million software 

installs, which likely served up literally 

billions of pop-ups 2—Mr. Horton’s 

experience could not have been 

unusual. Some of the troubles came 

home to roost: the software made the 

computer of one of DirectRevenue’s own 

employees crash four times in one day, 

and the company had to send someone 

to fix a computer belonging to one of the 

company’s venture capital investors. Id. 

I recognize that staff was able to 

negotiate comprehensive injunctive 

relief that will halt these illegal 

practices once and for all. The proposed 

order, among other things, requires 

DirectRevenue to co-brand 

advertisements it serves and provide an 

effective method to uninstall their 

software—steps that should allow 

consumers unhappy with the pop-ups to 

identify their source and remove the 

software that generates them. Other 

provisions ensure that consumers get to 

choose whether they want the software 

in the first place. I also recognize that, 

in litigating this matter, staff would 

have been presented with novel issues 

that could pose risks. 

That said, I cannot support a consent 

agreement that requires the 

respondents—particularly Joshua 

Abram, Daniel Kaufman, Alan Murray, 

and Rodney Hook, the officers and 

owners of DirectRevenue—to pay a total 

of only $1.5 million. Venture capitalists 

poured more than $20 million into 

DirectRevenue,3 and between the 

companies’ ad revenues and the venture 

capital money, millions of dollars 

flowed into the owners’ pockets—$23 

million, according to Business Week. 

See The Plot To Hijack Your Computer, 

supra. Settlement always involves 

compromise, and staff must weigh the 

advantages of a settlement with the risks 

and costs of litigation. But in cases like 

this, I would rather go to trial and risk 

losing than settle for a compromise that 

makes an FTC action just a cost of doing 

business. 

[FR Doc. E7–3058 Filed 2–22–07; 8:45 am] 

BILLING CODE 6750–01–P 


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