The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
The suits say Adscend Media tricks Facebook users into sharing personal information.
Facebook Inc. and Washington State yesterday filed separate lawsuits against Adscend Media LLC alleging the advertising company that operates an affiliate network is tricking Facebook users into spreading spam messages to their friends on the social network and making money off of it.
The lawsuit filed by Facebook in U.S. District Court in San Francisco says Adscend Media’s actions violate the CAN-SPAM Act, Facebook’s trademark rights and its terms of service. Facebook is asking the court for an order that enables them to permanently block Adscend from accessing the social network and targeting its users, and for damages. The CAN-SPAM Act requires that commercial e-mail messages contain a functioning return e-mail address or other Internet-based mechanisms that e-mail recipients can use to block commercial e-mails from the sender.
The lawsuit filed by Washington State in U.S. District Court in Seattle says Adscend Media’s actions violate anti-spam laws and the state’s Consumer Protection Act. It seeks unspecified damages and civil penalties.
The suits say Adscend Media’s affiliates insert technology provided by Adscend into salacious lures, like X-rated video clips, they post to the social network. Ascend affiliates lock the content—which often doesn’t actually exist—and requires a Facebook user to complete a series of steps, such as clicking the Like button, submitting his e-mail address, or completing a survey or advertising offer, to get at it. “The content-locking widgets are simply a ruse to lure Facebook users into following the instructions presented within them and ultimately obtain information from those users,” the suit says.
Adscend and its affiliates make money when Facebook users take these actions, the suits say. Clicking the Like button spreads the message to the Facebook users’ friends on the social network, but in some cases, the spam spreads through the network even if the user does not click Like because Adscend includes hidden code that activates just by clicking the enticing link, a practice sometimes referred to as clickjacking.
“The natural reaction is to wonder why anyone would click on these links,” says Washington assistant attorney general Paula Selis. “But, unfortunately they do, and at one point Adscend spam lined the defendants’ pockets with up to $1.2 million a month.”
Adscend Media today released a statement refuting the claims made in the suits. “At no time did we engage in the activity alleged in the complaints. Adscend Media will provide a vigorous defense against these false claims,” the company said. It said it would also conduct its own investigation to see whether any of its affilates engaged in the illegal activities detailed in the suits. The company says if affiliates did engage in illegal activies, it was without Adscend Media's knowledge.