Chinese companies join to rid handsets of poisoned apps

The companies hope to stop software that steals money from Chinese consumers

More than a dozen mobile phone makers in China have teamed up to tackle a growing problem of poisoned software applications in handsets that steal money from users.

The illegal applications are designed to slowly bleed money from a user in a number of ways, either by increasing phone usage charges, such as charging to the monthly bill every time a user clicks on the app, or offering products or services that are paid for but never delivered.

The group of companies, which includes Lenovo, Haier, TCL and chip maker MediaTek, pledged to answer the call by China's Ministry of Industry and Information Technology to crack down on the illegal applications. They signed an agreement not to pre-install any such applications on the cell phones they make and to take appropriate action if they discover any such malicious software in their products.

"As everyone knows, some mobile phone makers collude with value-added service providers to put software on handsets aimed at stealing money from consumers," said chip maker MediaTek, in a news release.

The government has worked to clean up the industry and the companies formed the group to support the efforts.

"The mobile phone industry is plagued by scams," said Mark Natkin, managing director of Marbridge Consulting in Beijing. Many companies charge people for services that they are either unaware they're paying for or where the charges so small that it's not worth suing over, he said. Small charges to millions of users can add up to big money for the companies involved.

In this case, the handset vendors joining the cause are in control of a lot of the software that goes into the handsets. "If they're not putting it on the handsets, who is?" he asked, though he added that it's also possible the service providers or retailers could install the software. He said such efforts are usually the result of at least a few companies conspiring with each other, and they share the ill-gotten gains.

MediaTek, for example, provides complete packages of handset components to dozens of mobile phone makers in China, including chips, circuit boards, reference designs and software. These packages do not include any kind of value-added service applications, said vice president and spokesman Yu Mingto. MediaTek's products include security software aimed at preventing malicious software, he added.

Natkin said that despite problems in the mobile phone industry, it's hard to tell if there will be any real follow through on the day's announcements. The announcements follow a typical pattern in China, whereby the government makes a bold statement, followed by a pledge of action by a group of companies. But these announcements are often publicity stunts that "are not that meaningful," he said.

(Owen Fletcher in Beijing contributed to this article)

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