Federal Trade Commission Closes Spyware Operation

An operation that allegedly installed illegal spyware on computers will give more than US$2 million to settle a U.S. Federal Trade Commission (FTC) complaint.

The FTC has obtained a settlement order against Enternet Media, Conspy & Co., Lida Rohbani, Nima Hakimi and Baback Hakimi, all based in California, the agency announced Wednesday. The defendants distributed software called Search Miracle, Miracle Search, EM Toolbar, EliteBar and Elite Toolbar, the FTC said.

In an order issued by Judge Christine Snyder of the U.S. District Court for Central California, the defendants are prohibited from interfering with computer use, such as distributing software code that tracks Internet activity, changes browser settings and inserts new advertising toolbars onto browsers.

The defendants also are permanently prohibited from making misleading representations regarding the performance, features and cost of any software, including misrepresenting that the code is an Internet browser upgrade or other computer security software, music, song, lyric or cell phone ring tone.

The websites of the defendants and their affiliates caused installation boxes to pop up on consumers’ computer screens, the FTC said in its complaint. In one variation of the scheme, the boxes offered a variety of freeware, including music files, cell phone ring tones, photographs, wallpaper and song lyrics. In another, the boxes warned that consumers’ Internet browsers were defective, and offered free browser upgrades or security patches.

Users who downloaded the supposed freeware or security upgrades did not receive what they were promised. Instead, their computers were infected with spyware that interfered with their computers and was difficult to uninstall, the FTC said.

The defendants’ software tracked Internet activity, changed homepage settings and inserted a large frame onto browser windows that displayed advertisements, the FTC said.

At the FTC’s request, the court froze the operation’s assets last fall and ordered it shut down. The settlement requires the defendants to give up just over $2 million of their spyware-related profits and includes a suspended judgment of $8.5 million.

The FTC brought the case with assistance from Microsoft, Webroot Software and Google, the agency said.

By Grant Gross, IDG News Service (Washington Bureau)

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