Court Enjoins Spyware Producer Under FTC Act

The U.S. District Court for the Middle District of Florida has issued a preliminary injunction against a producer of spyware under the Federal Trade Commission Act. Federal Trade Commission v. Cyberspy Software, LLC, et al., No. 6:08-cv-1872 (Preliminary Injunctive Order, Nov. 25, 2008).

The FTC sued the defendant company and its principal for unfair and/or deceptive trade practices under the FTC Act. According to the court's order, the defendants’ spyware is designed to be installed on a computer without the knowledge or consent of a computer’s user. The defendants provide instructions to customers which demonstrate how to disguise the spyware as an innocuous file. Once a user installs the spyware, the spyware tracks the user's keystrokes, passwords entered, and websites visited.

The court found the FTC was likely to succeed on the merits of the case, and that continued sale of the spyware was likely to cause substantial harm to consumers. Although the defendants argued that the spyware has some redeeming value, such as allowing a parent to track a child's Internet usage, the court noted that the defendants' marketing materials suggested that the spyware should be used for more harmful purposes.