FTC goes after alleged MySpace hijackers

The U.S. Federal Trade Commission has asked a federal court to require an alleged Web page hijacking operation to obey previous orders barring unfair and deceptive practices.
Walter Rines, business partner Sanford Wallace and Rines' company, Online Turbo Merchant, diverted users of MySpace.com to other Web sites and barraged them with ads to earn advertising commissions, according to court papers filed with the FTC. The defendants used pagejacking, phishing and other methods to target MySpace users, in violation of a previous court order, the FTC said in a news release.

The FTC, in a Jan. 23 filing, asked the U.S. District Court for the District of New Hampshire to order the defendants to give up the money they earned from their MySpace scheme.

Rines' listed phone number in New Hampshire was disconnected.

In October 2005, the FTC charged Odysseus Marketing and its owner, Rines, with luring consumers to their Web site by offering free software, including a program that supposedly allowed them to engage in anonymous peer-to-peer file sharing. The software was bundled with spyware that intercepted and replaced search results and barraged consumers' computers with pop-up ads, the FTC said. The software also stole users' personal information, and users were unable to locate or uninstall the spyware through reasonable means, the FTC said.

The FTC alleged that the defendants' software captured consumers' personal information and transmitted the information to the defendants' servers. Consumers were unable to locate or uninstall the spyware through reasonable means, the agency charged. The court ordered a preliminary halt to these practices pending trial, and in October 2006 Odysseus and Rines settled the charges by stipulating to a permanent injunction.

The permanent injunction prohibited the defendants from redirecting consumers' computers; from changing any Web browser's default home page; and from modifying or replacing the functions of any computer application. It required Rines and his company to obtain consumers' express consent before downloading or distributing any content to their computers.

The permanent injunction also imposed a US$1.75 million judgment, and all but $10,000 was suspended based on the defendants' inability to pay.

In its recent filing, the FTC alleges that Rines, his company and Wallace knew of the permanent injunction and violated that order by diverting users from MySpace.com to their Web sites.