Court orders spyware creating company to fess up over $4 million in profits
What goes around comes around. Almost. It seems that the FTC has decided enough is enough when it comes to nasty companies doing nasty things to peoples computers and blow the whistle.
The accused is Sanford Wallace, the owner of the company Smartbot.net. He has been fingered for creating malicious software that is designed to exploit a flaw in Microsoft’s Internet Explorer web browser… the same browser that 85% of internet users utilize.
The grounds of such a suit are that Mr. Wallace and his firm has been “installing” this software without user’s permission. In fact, once a user has unknowingly been infected, the CDROM tray opens and a message on your screen appears that says:
“FINAL WARNING!! If your cd-rom drive’s open . . .You DESPERATELY NEED to rid your system of spyware pop-ups IMMEDIATELY! Download Spy Wiper NOW!”
Ironically (and fortunately for Mr. Wallace), his company is the sole beneficiary of the proceeds made from any purchases of Spy Wiper. A pretty good business model when you consider that the only thing they need to get rich if for you to visit a website designed to infect you!
This type of tactic is not uncommon, in fact, it’s common place. Since the advent of affiliate marketing, anti-spyware software companies have been happy to give up a portion of their profits to anyone who refers someone to buy them. If you are a programmer, you have great incentive to create spyware that holds a user for ransom – ransom that will be paid in full when you buy the software recommended to remove the spyware. Luckily, the software you recommend to remove the spyware happens to be the same software you make a chunk of money off.
The U.S. District Court judge that ordered the re-payments should take a long and hard look at this growing epidemic, and consider a more bold punishment. A slap on the wrist is all Wallace has suffered. The millions in profits he’s being forced to give up was never really his in the first place. It’s like taking the loot back from a bank robbery and telling the robbers not to do it again.
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