Microsoft files suit against spyware organization

Microsoft Tuesday announced it has filed a complaint against Nevada-based ERG Ventures, the same company the U.S. Federal Trade Commission took action against for secretly loading malevolent software onto millions of computers.

Microsoft said it is seeking monetary damages from defendants Timothy Taylor and others associated with ERG Ventures for allegedly distributing the "notorious spyware program" against which the FTC took legal action.

"We commend the FTC for exposing this spyware operation," said Scott Stein, senior attorney with the Internet Safety Enforcement team at Microsoft, in a prepared statement. "Microsoft was proud to provide technical assistance to the FTC and also to take legal action against one part of the operation targeted by the FTC."

In October in a legal filing made in the U.S. District Court in the District of Nevada, the FTC charged ERG Ventures and one of its affiliates with tricking consumers into downloading malevolent software by hiding its Media Motor program in "seemingly innocuous free software."

The FTC asserted that Media Motor silently activates itself and downloads intrusive malware that spies on the victim's PC, changes Web pages, degrades computer performance, and attacks and disables anti-spyware and anti-virus software. The U.S. District Court in Nevada supported the FTC complaint in ordering the shutdown of the operation.

The FTC yesterday indicated it is also asking the court to permanently halt "these deceptive and unfair downloads, and to order the outfit to give up its ill-gotten gains."

The Microsoft lawsuit disclosed Tuesday alleges that Taylor and others used screen savers and "other seemingly benign programs" as Trojan-horse malware to surreptitiously install unwanted software on consumers' computers, specifically Microsoft Windows machines, and change users' Windows registry settings.

Microsoft said its research shows that the defendants' software installs even if users try to stop installation. Microsoft is seeking monetary damages from the defendants on the grounds that their installation practices violate the Washington Computer Spyware Act and the Washington Consumer Protection Act.

"These defendants were packaging a broad array of unwanted and intrusive programs with seemingly innocent programs," Stein said. "They didn't tell users about the numerous hidden programs that would be installed with the screen savers, and provided only an illusory option to stop installation."

Microsoft said it is taking this legal step following the successful FTC action in order to protect customers and "to do whatever we can to prevent this kind of practice."

The FTC's legal actions against ERG Ventures and its associates won plaudits from the Boston-based anti-spyware organization StopBadware.org.

The court's action supporting the FTC complaint against ERG ventures "is proof that consumers have an effective voice in the fight against badware," said John Palfrey, co-director of StopBadware,org and executive director of the Berkman Center for Internet & Society at Harvard Law School.

StopBadware.org last May issued a report on Team Taylor Made, an ERG affiliate, and provided information to the FTC regarding Team Taylor Made and its deceptive practices, said Palfrey.

Efforts to reach ERG Ventures were unsuccessful.

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