Federal Court Shuts Down Alleged Spyware Operation

Rhett Pardon
RENO, Nev. — A federal court on Monday ordered ERG Ventures, which operates online adult site PrivateinPublic.com, and one of its affiliates to stop distributing spyware, adware and popups.

A U.S. District Court judge in Reno signed a temporary restraining order against Nevada-based ERG, siding with the Federal Trade Commission’s contention that the company has been deceiving customers with exploitive code.

The FTC complaint names ERG Ventures LLC, doing business as ERG Ventures LLC2, PrivateinPublic.com, Media Motor and JoystickSavers.com, as well as company owners Elliott S. Cameron, Robert A. Davidson, II. and Gary E. Hill. Programmer Timothy P. Taylor, who operates Team Taylor Made, also was named in the complaint.

In addition to the temporary restraining order granted Monday, the FTC wants the operation to return its "ill-gotten" gains and seeks a permanent restraining order.

ERG Ventures and the others failed to disclose that free software was bundled with malware, the suit said.

The FTC also said ERG Ventures and Taylor used a deceptive End User License Agreement. The EULA claimed to give users the option to halt the installation of the program, but secretly installed the malware no matter what option the user selected. Microsoft assisted in the investigation of ERG, the FTC said.

The U.S. Attorney's Office in Washington is engaged in a parallel criminal investigation of the defendants, according to the FTC.