Microsoft, FTC take on spyware operation, just shut down by federal judge

Microsoft announced today that it has filed a lawsuit against a spyware distributor, one day after the Federal Trade Commission (FTC) announced the company was shut down by a U.S. District Court judge.

The suit alleges the defendant, ERG Ventures, violated the Washington Computer Spyware and Protection Acts for installing unwanted software on customers' PCs. Microsoft is seeking unspecified damages, according to a company statement.

The FTC has asked the judge to shut down the company to and forfeit any ill-gotten games, the agency said Monday in a statement.

The FTC has charged ERG Ventures and one of its affiliates with hiding the known spyware program, Media Motor, within seemingly safe software, such as screensavers and video files.

The agency claims the defendant offered the end user the right to opt out of receiving the software, but it was installed anyway.

Once downloaded, "the Media Motor program silently activates itself and downloads malware…Many of the malware programs installed by the Media Motor program are extremely difficult or impossible for consumers to remove from their computers," the FTC statement said.

Microsoft, which assisted the FTC in its case, charges that ERG Ventures' principals, namely Timothy Taylor, used seemingly harmless software, such as screensavers of Jessica Simpson, to mask trojans that secretly installed unwanted software.

Once installed, the software "calls home" to create unwanted pop-up advertisements, track users' web activity, redirect their browsers to unwanted pages, add icons to the (desktop) and change security settings.

"These defendants were packaging a broad array of unwanted and intrusive programs with seemingly innocent programs," said Scott Stein, senior attorney of Microsoft's Internet Safety Enforcement Team. "We have a responsibility to help protect our customers and to do whatever we can to prevent this kind of practice."

A telephone number for ERG Ventures could not be immediately obtained.

Click here to email Dan Kaplan.

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