Overstock.com on Wednesday became the first online publisher to file a complaint under Utah's Spyware Control Act, which was passed into law on May 3. The complaint alleges that online retailer SmartBargains.com used Claria Corp.'s GAIN Network to place pop-up ads over Overstock.com's Web site in violation of the newly enacted law.

"Pop-up ads have been to Web browsing what spam is to e-mail," said Overstock.com President Patrick Byrne in a prepared statement. "Within the world of affiliate marketing, such software is often called 'parasiteware' on the grounds that the companies which distribute such code and those who advertise through it are parasitic on legitimate commerce: spyware hijacks not only consumer spending, but the commissions that would otherwise be paid to legitimate affiliate community."

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In response to Overstock.com's filing against it, SmartBargains President and chief executive officer Carl Rosendorf said in a statement: "The Gator Advertising and Information Network [Claria's GAIN network] that is utilized by SmartBargains is a program that consumers download in order to comparison shop on a real time basis."

The statement continued: "Several federal court decisions, in fact, have strongly supported the consumers right to access this form of advertising," Rosendorf said, adding, "We believe that Overstock.com's intention is to avoid and restrict competition by impeding consumers from comparison shopping on the Internet."

The GAIN network software has been controversial with some online publishers, because it ties an advertising network that delivers contextual pop-up ads to free, downloadable software. Users that download versions of software such as Precision Time, Weatherscope and Dashbar agree to allow GAIN to deliver pop-up ads tied to the context of the Web sites they are visiting.

As an example, someone visiting an online book seller might be served pop-up ads from another book retailer or from a company selling merchandise of interest to avid book readers.