Regulators: N.H. firm's business is spyware

WASHINGTON -- Regulators are trying to shut down a company they say secretly downloaded spyware onto the computers of Internet users, opening them to a flood of pop-up ads, computer crashes, and other problems.

The Federal Trade Commission, seeking a restraining order, accused Walter Rines of Stratham, N.H., and his company, Odysseus Marketing, of luring computer users with the promise of free software that would make illegal peer-to-peer file sharing hard to trace.

The claim was bogus, the FTC said, and the software was bundled with spyware.

Rines disputes the charges.

At a Senate subcommittee hearing yesterday, FTC chairwoman Deborah Majoras endorsed antispyware legislation that would make it easier for the FTC to share information and cooperate with foreign law enforcement. Much spyware is being sent from overseas, Majoras said.

The House has already passed antispyware legislation.

Spyware is a broad category of software that can be installed through unsafe e-mails or Web pages, or can be bundled with software that consumers download.

According to the FTC, Odysseus used a spyware program called Clientman that spawned downloads of dozens of other programs -- tracking users' online movements, bombarding them with pop-up ads, and redirecting them to fake search engines rigged to show Rines's clients first.