Under the terms of the preliminary settlement, the company would pay a total of $7.5 million over three years to the state of New York, and would permanently discontinue distribution of its adware, redirect and toolbar programs, all of which Intermix has previously and voluntarily ceased distributing. Intermix emphasized that it has not admitted any wrongdoing or liability and expects the final agreement to reflect this fact.
"We are pleased to announce an agreement in principle that should allow for an amicable resolution of this matter," said Richard Rosenblatt, chief executive officer of Intermix.
Since the initial inquiry by the Attorney General's Office, Intermix has created the position of chief privacy officer and is in the process of evaluating candidates for the position. In addition the company has joined the Network Advertising Initiative which has worked with the Federal Trade Commission and the U.S. Department of Commerce to develop a set of regulations to protect consumers on the Internet
"Persistent consumer concerns about online marketing require constant vigilance in today's internet marketplace," said Trevor Hughes, executive director of the NAI. "We look forward to Intermix's participation in the NAI as we continue to forge industry best practices that preserve online advertising while respecting consumers."
Intermix and the New York Attorney General's Office still need to agree on the specific terms of the final agreement and the court will have to agree on any terms the parties come up with. The lawsuit is expected to be resolved within the next few weeks.
The New York Attorney General's Office sued Intermix alleging the company was the source of "spyware" and "adware" that has been secretly installed on millions of home computers.
During the course of a six-month investigation prior to filing the complaint, the New Attorney General documented at least ten separate Web sites from which Intermix or its agents were downloading spyware, providing either no warning or other misleading disclosures. In this way, Intermix and its agents downloaded more than 3.7 million programs to New Yorkers alone, and tens of millions more to users across the nation.
In an interview with MarketWatch last week, Rosenblatt said he was glad to put the spyware suit behind the company and focus on its core business of creating content around social networks.
