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FTC Clamps Down on Software Distributors

The U.S. 'Federal Trade Commission' (FTC), which has taken up the job of protecting consumers has been successful several times in fighting companies that initiate spyware installation on computers of innocent Internet users. After clamping punishments on 'Zango Inc.,' and 'ERG Ventures LLC' during early half of November, two more companies have been compelled to not only stop distributing spyware but also pay fines, as per FTC. The Commission has closed down a total of nine spyware distributors since 2004. The court has ordered a preliminary shutdown of practices pending trial. The litigation has come to an end following the announcement of the settlement in November 24, 2006.

In another case in October 2005, FTC charged 'Odysseus Marketing Inc.' and its key person, Walter Rines of luring consumers to their websites that advertised bogus free software. The company also distributed a program called 'Kazanon' that tricked consumers to conduct anonymous 'peer-to-peer' file sharing.

The FTC alleged that the bogus software was combined with spyware and other undesirable software. The agency said that the defendants who distributed the spyware exploited security flaws in the 'Internet Explorer Web browser'. It also charged that the spyware interrupted and substituted search results when users browsed major Internet search engines. Further, the spyware flooded consumers with 'pop-ups' and other ads.

The FTC added other charges that the defendants' software seized consumers' personal details such as their first and last names, addresses, e-mail ids, telephone numbers and Internet 'browsing and shopping histories', which they transmitted to the Internet servers of the defendants. Consumers were at a fix to locate or uninstall the spyware via normal methods.

Johns Hawes, 'technical consultant' at 'Virus Bulletin' said that spyware and adware initiators could mint vast sums from such crimes.

The settlement prohibits 'Odysseus Marketing' and Rines from manipulating any security vulnerability to install software. According to it, the defendants must acquire consumers' permission prior to downloading any software onto their PCs. They cannot install software that is not readily uninstallable. Additionally, Odysseus operators must pay $50,000 as compensation to damages.

Such legal action set an instance for spyware distributors to opt honest behavior.

Related article: FTC Reaches Million-Dollar Settlement For Spyware

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