Adscend denies Facebook, AG allegations

Adscend Media, the defendant in lawsuits filed this week by Facebook and the Washington attorney general, on Friday denied the allegations in the complaints and shifted blame to its affiliates.

"At no time did we engage in the activity alleged in the complaints," Adscend said in a statement.

During a press conference in Seattle on Thursday, Facebook and the Washington state attorney general said that Adscend was behind a so-called "click jacking" scam that has now been blocked. In one example, a Facebook user would see a link to a video on a friend's wall. If the user clicked on the link, a pop up would appear asking the user to verify their age. Clicking on the verification box, the user would unknowingly share the video on their own Facebook wall.

After clicking the box, another page would pop up, ultimately taking the user to an advertiser's site that in some cases asked the user to supply personal information or purchase items. During the month of February 2011, the scam tricked more than 280,000 Facebook users into visiting advertiser pages, the Washington suit alleges.

Adscend is hired by advertisers that pay the company each time someone clicks on their page or advertisement. Adscend in turn often hires affiliates to drive traffic to the sites.

It's those affiliates that Adscend is now pointing a finger at. "We are undertaking an investigation to determine whether any of Adscend Media's affiliates engaged in the activity alleged by the Attorney General's office and Facebook. If they did, we are fully certain that the activity was conducted without the company's knowledge," the company said in its statement.

In the lawsuit filed in the U.S. District Court for the Western District of Washington, the state alleges that Adscend supplied the affiliates with the code and templates required to run the scam. "Defendants create and provide their affiliates with technology that is designed to deceive Facebook users into visiting websites that pay defendants for the referral traffic. Defendants encourage and pay their affiliates to create Facebook pages that are titled and designed to 'bait' users into visiting other websites," the suit reads. In addition to Adscend, Jeremy Bash and Fehzan Ali, co-owners of the Delaware company, are named in the suit.

Adscend also complained that the attorney general didn't contact it in advance of filing the suit. "We find it deeply troubling that the Attorney General's office made a public spectacle of these serious allegations without first questioning the company as part of its investigatory process and, even more inexplicably, without notifying the company that the complaint was being filed," Mark Rosenberg, an attorney with Tarter Krinksy and Drogin who is representing Adscend said in the statement. Adscend Media first learned of the allegations from media inquiries."

The attorney general's office and Facebook acknowledged that they didn't ask Adscend to stop the activity or otherwise contact the company before filing their suits.

Facebook filed its complaint in the U.S. District Court for the Northern District of California. The suits charge Adscend with violating anti-spam and consumer protection laws as well as violating Facebook's terms of service.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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