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Court Shutters Spyware Outfit, Freezes Assets

A federal court has shut down a Nevada company " ERG Ventures LLC -- that the Federal Trade Commission accused of spreading spyware and adware on the Internet using the notorious Media Motor program.

Microsoft, meanwhile, has filed a lawsuit charging that a number of ERG Venture's affiliates used screensavers and other software to infect users' PCs.

According to the FTC's complaint, the Reno, Nev.-based company "surreptitiously distributed and installed exploitive software programs onto consumers' computers through a sophisticated and expansive network of affiliates." The malware installed by Media Motor, said the FTC, changed browser home pages, added toolbars that generated pop-up ads -- sometimes sexually-explicit pop-ups -- and attacked users' anti-virus and anti-spyware defenses.

Other charges ran the gamut from allegations of deceptive EULAs (End User License Agreement) to claims that the software would install even if users declined the initial offer.

A U.S. District Court in Reno signed a temporary restraining order against ERG Ventures and froze the company's assets. The FTC, meanwhile, has asked the court to make the order permanent and force the company to part with its profits. By the FTC's accounting, the spyware spreader made more than $1 million in profits in a 12-month span from April 2004 to April 2005. Criminal proceedings have also been instituted against ERG Ventures, and search warrants have been served.

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