€1,000,000 fine for distributing unsolicited software

18 March 2008

Chris Erents, Gerrit-Jan Zwenne

The Dutch Telecom Regulator (“OPTA”) has imposed a €1,000,000 fine on three Dutch companies trading under the name DollarRevenue, and their two directors for distributing unsolicited software. According to OPTA 22 million computers worldwide were intentionally infected with adware and spyware. Several strategies were used to install the software such as misleading internet users to download infected files, botnets (“zombie networks”) and software vulnerabilities (“exploits”). This is the first time that OPTA has imposed fines on distributors of unsolicited software.

Installing unsolicited software is prohibited under the Dutch Telecoms Act, which implements Article 5 of the Directive on Privacy and Electronic Communications 2002/58/EC.

OPTA claims that DollarRevenue was amongst the top ten international distributors of spyware. By unlawfully installing adware and spyware DollarRevenue distributed advertising material and obtained access to internet users’ details. Using, amongst other things, misleading files, internet users were led to believe that they were about to download innocent files, whereas the files actually contained DollarRevenue software. According to OPTA, DollarRevenue was responsible for approximately 60,000 installations per day and a total of over 450 million illegal software program installations on approximately 22 million computers.

These illegally installed programs unleashed a flood of popup windows containing advertisements for all kinds of products and services. Unsolicited search toolbars were also installed, nested in the toolbars of Windows XP and Microsoft Internet Explorer, where they displayed ‘alternative search results’.

As the software did not include uninstall functions, it could only be removed with expert assistance.

OPTA took action after it received numerous complaints. In its decision it stated that that DollarRevenue and its directors deliberately contravened provisions of the Dutch Telecoms Act over the course of a year and this produced large-scale damage. For this reason, fines totalling €1 million were imposed on both the companies and their directors. OPTA is of the opinion that these fines will have a punitive and deterrent effect. As this decision can be appealed the judge has not yet ruled on the penalty proposed by OPTA.

Dollar Revenue and both directors have stated that they will appeal against OPTA’s decision.

OPTA’s press release in English can be found at:

www.opta.nl/asp/en/newsandpublications/pressreleases/document.asp?id=2459

OPTA’s press release in Dutch can be found at:
www.opta.nl/asp/besluiten/besluitenenoordelen/document.asp?id=2460