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FTC Pulls Plug On $100 Million Adware Business

A U.S. federal court shuttered one of the world's top five adware and spyware suppliers at the request of the Federal Trade Commission (FTC), the government agency says.

The move was the first FTC action that targeted a major player in the adware space.

Three California companies -- Enternet Media, Conspy and Co. Inc., and Networld One -- were shut down for allegedly using the lure of free music lyric files, browser upgrades, and ring tones to download adware and spyware on users' computers. Among the software surreptitiously installed on PCs were "EliteBar" and "EliteToolbar," two of the most widely-spread pieces of adware on the planet, according to Richard Stiennon, the director of threat research for Boulder, Colo.-based anti-spyware vendor Webroot.

"We've consistently found these in our top 10 of adware and spyware," said Stiennon. "They've been very effective at getting installed, sometimes even more effective than better-known adware."

The court also put a stop to the actions of an affiliate, the Ohio-based iwebtunes.com, from helping to spread the adware and spyware by offering blogs free background music. iwebtunes targeted Google's BlogSpot service in particular, offering bloggers Java code that would supposedly add free background tunes to their blogs. In actuality, the code popped up bogus dialog boxes on the screens of those who viewed the contaminated blogs; the dialog boxes claimed that the PC was a security risk, and offered to update the browser and/or deliver security software.

Among the specifics in the target=_blank>FTC's complaint to the U.S. District Court Central District of California, the agency said that the adware and spyware tracked users' Internet activities, changed their preferred home page, and displayed numerous pop-ups, even when a browser wasn't open. "The EM code substantially interferes with the functionality of that computer, and it is very difficult for a consumer to uninstall or otherwise remove [it]," the complaint read.

Calling it "deceptive and unfair acts or practices in violation of the FTC Act," the FTC asked the court to make the closure permanent and demanded that ill-gotten gains be returned to consumers.

Those gains were likely considerable, said Stiennon.

"They're definitely in the top 5," he said. "I'd estimate [their revenues] at $90 to $100 million a year."

Among the only adware companies bigger than Enternet, said Stiennon, are the better-known Claria and 180solutions.

Webroot, along with Google and Microsoft, were thanked by the FTC for their help in bringing the complaint to court.

Stiennon's Webroot, however, wouldn't comment on specific questions related to his company's involvement. "But this is big. Enternet is a major player. It makes its own software, and has its own affiliate network," added Stiennon.

Enternet recruited affiliates through its "cash4toolbars.com" and "c4tdownload.com" sites, the FTC said. As of mid-day Friday, the former was offline, but the latter was still operating. Enternet Media's primary site was also still up and running.

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