February 9, 2006 8:44 AM PST

Feds stay strong on spyware case

WASHINGTON--With spyware on the rise, the U.S. Federal Trade Commission is vowing to continue to pursue purveyors of the insidious software.

"Spyware is fast overtaking spam as consumers' top online concern," Deborah Platt Majoras, chairman of the FTC, said in a speech Thursday at an event hosted by the Anti-Spyware Coalition here.

Spyware and ad-serving software called adware are widely despised for sneaky distribution tactics, unauthorized data gathering and slowing of PCs. As many as 80 percent of consumers' PCs are infected with the annoying software, security experts have said.

"Spyware presents serious new challenges in detection, apprehension and enforcement," Majoras said. "But through litigation, the FTC has successfully challenged the distribution of spyware."

The FTC first took action against a spyware company two years ago, when it sued Seismic Entertainment. The company was accused of exploiting a security flaw in Microsoft's Internet Explorer browser to hijack a Web user's home page, display incessant streams of pop-up ads and install other software.

"The dissemination of harmful, unremovable programs that frustrate consumers' ability to control their own computers is digital carjacking, and we intend to vigorously prosecute it," Majoras said.

The Seismic case is ongoing, and the FTC has filed several lawsuits since it filed its first case. Most recently, the FTC was asked to take action against 180solutions, a maker of ad-serving software. Majoras declined to comment on the status of that complaint.

As it pursues spyware distributors, the FTC has found that international borders obstruct law enforcement. The organization is lobbying for adoption of the U.S. Safe Web Act, which is pending in the Senate.

"We are pushing for its enactment so that we will not be hampered in our cross-border investigations; certainly, spyware purveyors are not so hampered," Majoras said.

While spyware is rife, technology companies are responding--and that's good news, Majoras said. Makers of operating-system software, Web browsers and security products are attacking spyware. Internet service providers also are offering security features, she noted. "I hope that these efforts are just the beginning," she said.

The FTC this fall plans to host hearings to examine consumer protection issues related to new technologies. These are similar to hearings it held in 1995 about the risks presented by the Internet and other technologies.

The hearings may cover spyware but also could cover radio frequency identification, or RFID, chips and new electronic-payment mechanisms, Majoras said.

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