IAB Lawyers to Recommend Action Against Gator.com

Lawyers for the Interactive Advertising Bureau are planning to recommend legal action against ad software company Gator.com, internetnews.com has learned.

Specifically, Washington, D.C.-based attorney John Kamp is concerned about Gator’s proposed ability to deliver ads on top of existing Web site inventory. Currently, the Redwood City, Calif.-based company sells a type of pop-up ad to companies, and can deliver the ad in response to specific user actions — such as when they visit a competitor’s Web site.

According to published reports, Gator.com now is planning to go still further: an upcoming version will enable advertisers to purchase ads literally on top of banners embedded into a Web site.

“At the very least, this is a dirty trick,” said Kamp, who serves as the New York-based IAB’s legal counsel. “More likely, it is stealing. The idea that … a competitor would be able to mask and wholly substitute their ads is just foul play.”

“The question is, where should we take it, and what should happen?” he said.

IAB chief executive Robin Webster was traveling and unavailable for comment at press time. Spokespeople for Gator were similarly unavailable.

If the New York-based IAB, an industry group representing Internet media sellers, opts to pursue legal action against the Redwood City, Calif.-based firm, it could mean the start of major changes in the way online advertising inventory is protected.

Kamp said he intends to propose that the IAB considers a number of actions. For one thing, the IAB could file a complaint with the Federal Trade Commission alleging that Gator is undertaking unfair business practices, under Section 5 of the FTC Act.

Secondly, the IAB could take Gator to court under the Lanam Act, claiming deception and misrepresentation of another company’s trademarked good or service — and seeking an injunction.

“There are couple of pretty serious thing that can be done, and the [IAB] board will have to make a policy decision on what to do,” Kamp said. “They might very well decide this is an aberration, and not a huge business concern. Or, they might decide that the principal of it is such that they have no choice but to take decisive action.”

Admittedly, it’s not the first time that there has been a possibility of industry-wide action, though historically, such efforts peter out or fail to gain widespread appeal among Web advertising players.

In the past, there had been talk of legal action against ad blocking software, for instance. But industry players adopted a “wait-and-see” attitude, and despite years of the software’s availability, “the public hasn’t bought into it,” Kamp said. “The problem has just gone away of its own accord. So far, there is not enough use of them for anyone to care about.”

But Gator, which has bundling deals with a number of small software shops, has an extremely wide distribution — about 7 million users.

And with the continued sluggishness in Web ad spending prompting increasing efforts by the IAB’s to rally the industry around to new ways of thinking — such as a focus on research and branding — the timing might just prove risky for Gator.

“What would a magazine or newspaper do in the same situation — when they deliver it, and people pick it up and it has somebody else’s ad in it?” Kamp said. “Looking at this, I find it a serious breach of public trust by this company. And I’ll recommend to the IAB and its board that it take action. And then the board will decide.”

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