Facebook and US state government sue advertising firm
Adscend Media accused of running spam campaign netting millions
By Nancy Gohring | Published: 10:02, 27 January 2012
A US state attorney general announced two new lawsuits against Adscend Media, a company that allegedly has been earning $20 million (£12.7 million) a year using a Facebook scam.
It was a complicated scam that Facebook has now blocked, executives from the company said. Facebook users would see a link to a provocative video recommended by a friend on Facebook. A user would click on the video link and see a popup that might ask the user to verify they are over 13. By clicking on the verification box, the user would unknowingly share the video on their Facebook page.
After clicking the box, another popup would appear taking the user to an advertiser site that might ask the person to supply personal information or purchase an item like a phone ringtone.
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"Every time a user links to one of these advertiser sites, Adscend is paid a commission by the advertiser," said Paula Selis, assistant attorney general of Washington state.
The attorneys said that advertisers didn't necessarily know that Adscend was using these methods to drive traffic to their advertisements. The advertiser might be a large company working with a number of online advertising companies like Adscend, paying them for the traffic they generate to their ads, said Washington Attorney General Rob McKenna. "What happens is an advertiser doesn't know every place the ads are being placed," he said.
Facebook alleges that Adscend was earning over a million dollars a month, said Craig Clark, Facebook's lead litigation counsel. He declined to say how long the activity has been happening.
Facebook said that a browser vulnerability that allowed the exploit has been fixed so users shouldn't continue to see the scam.
Neither Facebook nor the state attorney general's office asked Adscend to stop the activity before they filed the lawsuit. When asked why not, Selis said: "There's no specific reason. They are big, they are pernicious, they have been doing this for a while and they know they are violating the law."
Adscend could not immediately be reached for comment.
In addition to the attorney general's suit, Facebook have also filed a suit against the company, charging that Adscend violated Facebook's terms of use and US anti-spam law.
