By Bob Sullivan Technology correspondent
msnbc.com
updated 10/5/2005 12:27:03 PM ET 2005-10-05T16:27:03

The Federal Trade Commission said Wednesday it was suing a firm for allegedly using the promise of free music downloads to sneak spyware onto unsuspecting victims' computers.

The agency said that New Hampshire-based Odysseus Marketing tricked consumers into downloading software that then hijacked search results from popular search engines and replaced them with sponsored links. The software was particularly troublesome because it could not be uninstalled “through reasonable means,” the FTC said.

Odysseus owner Walter Rines called the lawsuit “full of flaws from beginning to end.” He said his firm never engaged in spyware, which he said is characterized by secretly stealing users’ passwords and login information. Instead, he said his software was adware, which displays pop-up ads and additional search results.

“I have not done anything wrong nor broken any of the laws they are claiming,” he said.

He also said the lawsuit was “moot,” because the firm’s adware operations ended several weeks ago.

“We don’t even have any operations going on in that area. The site has been down for weeks,” he said. “I know the FTC is trying to be cheerleaders and show people they are closing down spyware operations ... but the FTC is really lumping me in with a bunch of bad actors that I don’t belong with.”

The FTC announced the lawsuit Wednesday morning, a few hours before the agency's chairman was to testify before a Senate panel on spyware issues. The suit was actually filed with the U.S. District Court in New Hampshire on Sept. 21.

'Download without fear'?
Odysseus advertised its Kazanon software as enabling users to swap music files without drawing the attention of record industry lawyers who have been cracking down on alleged illegal downloads. “Download without fear,” the ads said, according to the FTC complaint. “Kazanon silently modifies your PC’s Internet settings to make you invisible, untraceable, and totally anonymous. NO MORE FEAR of a lawsuit or prosecution just for downloading your favorite music!”

However, consumers who downloaded Odysseus' music-swapping software, "Kazanon," also installed a program called “Clientman” which served up advertising links, the FTC said. The agency said consumers weren't adequately informed of this.

“The consequences of downloading Kazanon are disclosed only in the End User License Agreement (“EULA”), in the middle of the two-page document,” it said. “The home page of the Kazanon Web site contains no information about the consequences.”

Rines wouldn’t say how many consumers were using the software, but said “hundreds of thousands” of people had downloaded it. He denied the FTC's accusation that the software could not be uninstalled. He said he published an uninstall tool for the software on the Odysseus Web site, though he said the tool might not have worked for every consumer.

The list of adware programs that landed on consumers’ computers was lengthy, according to the FTC. It included programs with names like Ncase, DealHelper, Surfsidekick, InternetOptimizer, BargainBuddy, WebRebates, Avenue A, and eZula.

After installing Kazanon, users who used search tools such as Yahoo and Google received altered search results, the FTC said. Atop the normal results produced by a Google search, for example, were links to firms that paid Odysseus for clicks. The results were presented in Google-style fonts, making them indistinguishable from the standard Google results.

Rines said his tool didn’t “replace” any search engine links, “It just added some of ours.”

Rines said he is preparing a response to the FTC’s complaint with an attorney, and that he planned to “comply 100 percent” with the agency’s investigation.

The FTC has asked a federal court to strip Odysseus of any revenues gained through Kazanon’s operations, and to permanently bar the company from marketing tactics it says are unfair to consumers.

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