FTC Seeks to Halt Alleged Spyware Site

The U.S. Federal Trade Commission has asked a U.S. District Court judge to halt the operations of a Web site that allegedly installed spyware and adware on customers' computers while promising free software to allow anonymous peer-to-peer file sharing, the agency has announced.

The FTC, in a complaint filed in September, asked the U.S. District Court for the District of New Hampshire to permanently halt downloads from Odysseusmarketing.com, saying that the company's "stealthy" downloads constitute spyware and violate federal law. Odysseus Marketing is based in Stratham, New Hampshire.

Head to Head

The FTC's complaint alleges that Odysseus Marketing's Kazanon software, which claimed to allow users to "download music without fear," did not make file sharing anonymous, as it advertised that it would. The software was bundled with spyware called Clientman, which secretly downloads dozens of other software programs, the FTC said.

The "secretly" downloaded software could degrade computer performance and memory and could replace search-engine results at sites such as Google and Yahoo with those from copycat sites, the FTC said. Some of the downloaded software generated pop-up ads and transmitted data from users' computers to Odysseus Marketing servers, the agency said.

Odysseus Marketing operator Walter Rines disputes the FTC's allegations. Computer users who downloaded his software had to agree to terms and conditions that told them adware came bundled with the free peer-to-peer product, he said. The adware did generate pop-up ads, but his company did not distribute spyware, he said.

"It was harmless software," he said. "I'm aware of the [FTC] filing, but what they're alleging is absolutely wrong, top to bottom."

Hidden Threat?

Clientman can crash the Internet Explorer Web browser, and it attempts to collect personal information, such as user names and passwords, from several Web applications, according to Computer Associates International, a computer security software vendor.

The FTC accused Rines and his company of hiding its adware notice in the middle of a two-page end-user license agreement buried on the Odysseus Web site. The FTC also alleged that the defendants deliberately make their software difficult to detect and impossible to remove using standard software utilities. Though the defendants purport to offer their own "uninstall" tool, it does not work as an uninstaller but instead installs additional software, according to the FTC's complaint.

The Center for Democracy and Technology, a privacy advocacy group, applauded the FTC's action against Odysseus Marketing. CDT had complained about Odysseus Marketing in a spyware report to the FTC in February 2004, CDT said. The FTC has filed complaints against three companies identified in the CDT complaint.

"The FTC has been going after companies that defraud consumers by installing unwanted and dangerous spyware on their computers," CDT Deputy Director Ari Schwartz said in a statement. "We applaud the commission for its continued efforts to crack down on spyware distributors. Unfortunately, they still have a lot of work to do."