Intermix Media Inc. said Tuesday it would pay $7.5 million to settle New York state's lawsuit charging the company with bundling hidden "spyware" along with millions of programs it gave away for free.
The company also said it would permanently discontinue distribution of its adware, redirect and toolbar programs, all of which Intermix said it has previously stopped distributing. Intermix said it did not admit any wrongdoing or liability.
The settlement deal comes after New York Attorney General Eliot Spitzer sued Intermix in April, charging that the company's practice of bundling hidden spyware violated state laws prohibiting false advertising and deceptive business practices.
Spitzer's office sought to stop Los Angeles-based Intermix from secretly installing software on users' computers, make it return money it made from the process and pay a fine.
These programs were secretly bundled with others designed to deliver pop-up advertising or steer Web traffic to an Intermix search engine, Spitzer charged in the lawsuit..
Under terms of the settlement agreement, Intermix agreed to pay $7.5 million to the state of New York over three years. Since Spitzer's initial inquiry, Intermix also said it has created the position of chief privacy officer and worked with federal regulators to help protect Internet consumers.