FTC Filing Targets Malicious Spyware
Spyware has come under target of the Federal Trade Commission with a new complaint filed in federal court which is requesting that two Internet based advertising and software firms be closed. The FTC filing was made last week with a press conference to be scheduled for tomorrow. The target of the filing is Sanford Wallace and his two companies, SmartBot.Net and Seismic Entertainment Productions.
The FTC filing was reportedly initiated after it received complaints from a DC based WatchDog group, the Center for Democracy and Technology. The Center for Democracy and Technology’s (CDT’s) complaint highlighted browser hijacking and deceptive advertising run by Seismic advertising, and CDT subsequently documented forced installations caused by a Seismic website. According to the CDT website “Over the last several years, a loosely defined collection of computer software known as ‘spyware’ has become the subject of growing public alarm. Computer users are increasingly finding programs on their computers that they did not know were installed and that they cannot uninstall, that create privacy problems and open security holes, that can hurt the performance and stability of their systems.” The FTC’s filing mentions these and other actions as reasons for its suit against Sanford Wallace.
The FTC has accused Mr. Wallace’s companies of infecting computers with unsolicited spyware software, showering computer screens with pop-up ads and then capitalizing on this by offering the same users a popup blocking software solution for $30.
USAToday reports: “The FTC said the companies secretly installed the software on computers, causing systems to be overwhelmed by pop-up advertisements, and then sending them alarming messages saying they needed to buy “Spy Wiper” or “Spy Deleter” for $30.
The FTC alleges the defendants have unfairly changed consumers’ Web browsers, installed advertising and other software programs, and compelled purchase of anti-spyware software.”
The FTC is not the only government body cracking down on spyware. Last week legislation prohibiting spyware practices was also passed by the United States House of Representatives in a 399-1 vote. Termed the Spy Act, this bill not only prevents all things associated with spyware, but it also requires that opt-ins, notices and consents accompany any legal software that collects personal information and data from consumers.
Violators of H.R. 2929 may face civil penalties of up to $3 million if found guilty of practices such as keystroke logging, phishing, homepage hijacking, and implementing ads that can only be closed by a computer shutdown.