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FTC Seeks to Halt Illegal Spyware Operation
Lure of Anonymous File Sharing Software Exposed Consumers’ Computers to Spyware

The Federal Trade Commission has asked a U.S. District Court judge to halt an operation that secretly installed spyware and adware that could not be uninstalled by the consumers whose computers it infected. The defendants used the lure of free software they claimed would make peer-to-peer file sharing anonymous. The agency alleges the stealthy downloads violate federal law and asked the court to order a permanent halt to them.

According to the complaint filed by the FTC, Odysseus Marketing and its principal, Walter Rines, advertised software they claimed would allow consumers to engage in peer-to-peer file sharing anonymously. With claims like “DOWNLOAD MUSIC WITHOUT FEAR,” and “DON’T LET THE RECORD COMPANIES WIN,” the defendants encouraged consumers to download their free software. The agency charges that the claims are bogus. First, the software does not make file-sharing anonymous. Second, the cost to consumers is considerable because the “free” software is bundled with spyware called Clientman that secretly downloads dozens of other software programs, degrading consumers’ computer performance and memory. Among other things, this accumulated software replaces or reformats search engine results. For example, consumers who downloaded the spyware may try to conduct a Google or Yahoo! search. Their screens will reveal a page that appears to be the Google or Yahoo! search engine result, but the page is a copy-cat site, and the order of the search results is rigged to place the defendants’ clients first. The bundled software programs also generate pop-up ads and capture and transmit information from the consumers’ computers to servers controlled by the defendants.

The FTC charged that the defendants have an obligation to disclose that their “free” software download caused spyware and adware to be installed on consumers’ computers. But instead, the FTC alleges, they hide their disclosure in the middle of a two-page end-user licensing agreement buried in the “Terms and Conditions” section of their Web site. In addition, the FTC alleges that the defendants deliberately make their software difficult to detect and impossible to remove using standard software utilities. Although the defendants purport to offer their own “uninstall” tool, it does not work. In fact, it installs additional software, according to the FTC’s complaint.

The FTC charges that the practices of Odysseus Marketing and Walter Rines are unfair and deceptive and violate the FTC Act. The agency will seek a permanent halt to the practices.

The defendants are based in Stratham, New Hampshire.

Alex Eckelberry
(Thanks Suzi!)