PropellerAds Labels MPA’s Piracy Claims “Harassment” and “Defamation”

With more than a billion impressions per month and over 30,000 active advertisers, PropellerAds is a serious player in the online advertising industry.

The Cyprus-based company works with advertisers and publishers from all over the world and while many are legitimate companies, Hollywood believes there are some bad apples too.

MPA’s List of Notorious Markets

Last month, the Motion Picture Association (MPA) nominated PropellerAds for inclusion on 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, Fmovies, and YTS.

According to the MPA, PropellerAds is used by many pirate sites to generate millions of dollars in revenue.

“Although primarily based in Cyprus, Propeller Ads is an ad network operated by Russian individuals that has subsidiary offices in the Czech Republic, the Isle of Man, and the United Arab Emirates. The company is a significant ad provider to streaming cyberlockers,” MPA wrote.

The movie industry group added weight to its claim by referencing reports from the Digital Citizens Alliance (DCA), which show that illicit actors use pirate sites to display dubious or even harmful ads.

“According to DCA, Propeller Ads is among the biggest facilitators of malvertising on piracy sites, accounting for a quarter of their malvertising. Propeller Ads has been offering its services to dozens of illegal and infringing sites such as French-Stream.gg, Supervideo.tv, Vidlox.me, and Filmpertutti.lat, helping those sites generate significant revenues through advertising,” MPA writes.

MPA’s nomination

This isn’t the first time that PropellerAds has been nominated for an appearance in the “notorious markets” overview; the MPA previously submitted almost identical recommendations to the USTR. These claims are a thorn in the side of the advertising company which has just responded with a scathing rebuttal in which it openly criticizes the MPA.

PropellerAds Responds

In a letter to the USTR, PropellerAds, represented by Boston Law Group’s Val Gurvits, describes the MPA’s characterization as baseless and libelous.

“In short, there is no basis to claim that Propeller Ads can be or should be alleged to be taking part in piracy. The assertions by the MPA that Propeller Ads is willfully funding piracy websites are not only factually wrong, but also legally baseless and libelous,” the letter reads.

The advertising company sees itself as an intermediary between advertisers and publishers, who use its platform to show billions of ads. It has no control over what’s offered on its clients’ websites, nor does it endorse or support any of the content.

In this intermediary role, the company believes that it’s not responsible for potentially problematic content. That’s in line with how courts in the US have ruled on this matter, the response notes, citing various legal precedents.

“In stark contrast to the MPA’s suggestion that advertising services somehow make Propeller Ads complicit in copyright piracy occurring on certain Internet websites, United States courts have explicitly found that an advertising network like Propeller Ads is not responsible for the infringing activities of its publishers.”

Reckless, Baseless, Inaccurate, and Misleading

As the rebuttal continues, the wording gets stronger. PropellerAds openly discredits the DCA research the MPA relies on, describing it as “reckless, baseless, inaccurate, and misleading.”

“The DCA Report not only fails to include Propeller Ads, but it does not even allege that any online advertisers or ad networks, in general, are responsible for illicit acts of piracy, credit card fraud, malware nor for any other potential risk to the health and safety to American consumers,” PropellerAds insists.

The MPA’s reliance on the DCA research to back up their “attacks” is “reprehensible and self-interested,” the advertising company notes. It stresses that there are close ties and financial links between the film industry and DCA, as previously reported by Vox.

PropellerAds indirectly suggests that DCA’s reports are used as ammunition for lobbying efforts. For example, the research is often referenced in legislative and policy commentary, without proper attribution and unbiased data.

“Indeed, all evidence demonstrates that the DCA created the DCA Report simply by relying on the unsubstantiated allegations of self-interested parties without conducting any reasonable independent research, with the clear intention of reaching a predetermined conclusion, defaming Propeller Ads,” the company adds.

“The DCA Report and all information therein about Propeller Ads is based on unconfirmed, farfetched, and false allegations without any actual evidence or justification whatsoever.

“The DCA Report provides no statistics or other real evidence proving that advertising intermediaries are in any way responsible for these bad actors. Therefore, all declarations, data, and numbers in the DCA Report as it relates to Propeller Ads are nothing more than mere speculations, expressions of malevolent opinions, and invalid assumptions.”

Harassment and Defamation

Propeller Ads says the MPA uses the USTR process to put pressure on third-party intermediaries, which can be seen as harassment and defamation.

“While the MPA holds itself out as a party eager to combat illegal activities on the internet, in reality, the MPA is using its platform and influence to baselessly harass and defame Propeller Ads and other major industry participants.”

If the MPA truly believes that PropellerAds is breaking the law it can take the matter to court; thus far, however, that’s yet to happen. While the MPA may not like some of the sites the company works with, that doesn’t make it liable.

For this reason, the USTR should not list the advertising company as a notorious market in its final report, the letter concludes.

“Propeller Ads respectfully cautions USTR to not adopt the MPA’s unfounded allegations and manufacture of evidence. The MPA’s cynical strategy is quite clear. The MPA is attempting to launder their own allegations through the USTR to advance the MPA’s own interest against Propeller Ads and other online advertisers.”

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A copy of PropellerAds full response, submitted to the US Trade Representative, is available here (pdf)

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