In the Cyberlaw Clinic, we've been researching various spyware products in the hopes of identifying a particularly nasty one so that we can sue the bejeezus out of the company that produces it. In one case, it turns out the Federal Trade Commission has already pulled the trigger.
On November 1, the FTC sued Enternet Media, distributors of EliteBar (a.k.a. Search Miracle, YupSearch, Elite Toolbar, Elitium, etc.), in the Central District of California in Los Angeles. In their first amended complaint (filed on the 4th), the FTC accuses Enternet of deceptively distributing “exploitive advertising software code” onto consumers' computers. It also claims that Nicholas Albert, an Enternet associate, used www.iwebtunes.com to give free music secretly bundled with EliteBar to bloggers, who would then unwittingly transmit the spyware app to their readers. The complaint emphasizes that Enternet supposedly misrepresents Elitebar as innocuous freeware that consists merely of ring tones, photos, or song lyrics, and uses fake security dialog boxes to trick unsuspecting netizens into installing the program.
Specifically regarding Enternet's End User License Agreement, the FTC alleged that “Although the [Enternet Media] defendants do have a EULA, they do not require, let alone encourage, consumers to review it prior to downloading and installing the EM code.” Furthermore, “In any case, the EM EULA, even if it were readily available, by its terms is so broad and over-reaching that it does not convey adquate information to consumers.”
The district court responded by granting a temporary restraining order against Enternet, ordering the company to stop distributing spyware that interferes with consumers' computers, granting the FTC free access to its financial records, and freezing its assets. Enternet must also power down all computers outside its offices that contain relevant data to avoid its deletion. The court issued the order as an emergency injunction, stating: “The [FTC] has not provided notice to the defendants due to the likelihood that advance notice of this action will cause the defendants to abscond with or destroy discoverable evidence and conceal or dissipate assets.” Technically, the TRO expires on the 14th at 3:30 P.M.
Already, some online consequences are apparent:
o Search Miracle and YupSearch, two sites that used to offer EliteBar, have replaced their download links with links to the uninstall program previously linked very inconspicuously at the bottom of the pages.
o The latest version of EliteBar that our experts downloaded within the past two weeks behaves more “nicely” than the previous one.
o The Privacy Policy/EULA on the EliteBar sites is still the same, dated “July 2004.”
o Enternet Media's website appears unchanged for now.
It looks like Enternet is in hot water, but it's also clear that the feds pay some attention to the spyware (maybe they're PC users?). But from a self-interested perspective, I still hope we can continue our work against other companies. It will be interesting to see how Enternet defends itself . . . .