With a reach of a billion users and 10,000 new advertising campaigns per week, PropellerAds is a major player in the online advertising industry.
The Cyprus-based company works with advertisers and publishers from all over the world. Many of these are legitimate companies, but there are likely some bad apples in the bunch too.
MPA’s List of Notorious Markets
A few weeks ago Hollywood’s MPA listed the company as a potential candidate for the US Trade Representative‘s annual list of “notorious markets”. In the overview, the advertising outfit is flanked by traditional pirate sites such as The Pirate Bay and Fmovies.
“Although primarily based in Cyprus, PropellerAds is an ad network operated by Russian individuals that has subsidiary offices in the Czech Republic and the Isle of Man. The company is a dominant ad provider to streaming cyberlockers,” MPA wrote.
The goal of this “notorious markets” process is to identify pressing piracy problems. It’s very much a diplomatic pressure tool with the ultimate goal of helping US rightsholders tackle online piracy around the world.
PropellerAds Rebuts Allegations
Initially, PropellerAds didn’t respond to the allegations. However, after the official deadline passed, Boston Law Group’s Val Gurvits sent a letter to the USTR, rebutting MPA’s allegations. According to the lawyer, PropellerAds is a perfectly legitimate business.
“PropellerAds does not knowingly or intentionally work with any advertiser or publisher that engages in any illegal or unlawful activities,” the letter reads.
“PropellerAds actively works to combat abuse by expeditiously taking action on reports of illegal or unlawful activities including, when appropriate, terminating business dealings with the advertiser or publisher engaging in such activities.”
The company’s counsel gives a detailed overview of relevant U.S. jurisprudence which shows that advertising networks are not responsible for the alleged infringing activities of their publishers.
‘Factually Wrong and Libelous’
Among other things, PropellerAds don’t store or transfer infringing material and neither does it induce copyright infringement in any way, the letter notes. PropellerAds characterizes MPA’s listing as legally baseless and even libelous.
“In short, there is no basis to claim that PropellerAds can be or should be alleged to be taking part in piracy. The assertions by the MPA that PropellerAds is willfully funding piracy websites is not only factually wrong, but also is also legally baseless and libelous.”
The advertising company continues by pointing out that the MPA never reached out to hear its side of the story or ask for more details about its business practices.
PropellerAds says that it complies with all the “best practices” recommended by the USTR. In addition, it offers an easily accessible abuse report form. However, MPA never used this, nor did the company send any copyright infringement notices.
Without knowing any inside details about the business, and without due process, MPA decided to flag PropellerAds as a pirate business. This clearly goes too far, the company argues.
‘Remember the Illegal VCR?’
This type of ‘scapegoating’ is not new, according to the lawyer, who points out that Hollywood also framed the VCR as a dangerous and illegal technology years ago.
“I remind you that the MPA is a special-interest industry group. MPA’s members have historically had difficulties accepting new technology — they are the very same companies that at one point claimed that the VCR is illegal,” the letter reads.
While the MPA may not like some of the websites that use PropellerAds, the company says that there is no valid reason to conclude that it engages in illegal activities or is harboring copyright infringement.
PropellerAds Cautions USTR
Finally, the advertising outfit warns that, if the USTR adopts the MPA’s claims without questioning them, it participates in the manufacture of evidence.
Generally speaking, the USTR takes over recommendations from rightsholders without doing its own research. The rightsholders then use this “US Government” report in lawsuits and lobbying efforts, even though they provided this “evidence” themselves.
“I caution you that by simply repeating MPA’s unfounded allegations, the USTR is participating in the manufacture of evidence,” PropellerAds writes.
PropellerAds is not the only advertising company that has responded to the MPA’s recommendations. Previously, Popads labeled the Hollywood group’s submission as false and misleading.
A copy of PropellerAds full response to the US Trade Representative is available here (pdf)