SPYWARE Panel files case against 3 companies

WASHINGTON (AP ) -- The Federal Trade Commission filed Thursday the first case in the country against software companies accused of infecting computers with intrusive "spyware" and then trying to sell people the solution.
The commission accused the companies of infecting computers with unsolicited software, showering computer screens with pop-up ads and then trying to get consumers to pay $30 to fix it. It is seeking an injunction to get the companies, owned by the same person, to stop, and to offer restitution to consumers.
The FTC requested a temporary restraining order from the U.S. District Court for the District of New Hampshire against Seismic Entertainment Productions Inc., Smartbot.Net, Inc., and Sanford Wallace.
The FTC said the companies secretly installed the software on computers, causing systems to be overwhelmed by pop-up advertisements, and then sending them alarming messages saying they needed to buy "Spy Wiper" or "Spy Deleter" for $30.
The FTC alleges the defendants have unfairly: changed consumers' Web browsers, installed advertising and other software programs, and compelled purchase of anti-spyware software.
Seismic is based in Rochester, N.H.; SmartBot in Richboro, Pa., with its principal place of business in Barrington, N.H. Wallace is officer and director of both Seismic and SmartBot.
This week, the House passed two bills that would outlaw spyware. The Internet Spyware Prevention Act would give the Justice Department $10 million to crack down on companies and others that secretly install spyware.