Three companies shut down on spyware charges

WASHINGTON (Reuters) - A US court shut down three internet companies for secretly bundling malicious "spyware" with ring tones, music programs and other free high-tech goodies, the US Federal Trade Commission said on Thursday.

The malicious software tracked victims' internet activity, hijacked their home pages and deluged them with unwanted "pop up" ads, the FTC said.

The assets of Enternet Media Inc and Conspy & Co Inc, based in California, and Iwebtunes, based in Ohio, have been frozen pending further court action, the FTC said. The court also ordered all three firms to halt downloads of the software.

Enternet Media and Iwebtunes could not be reached for comment. Conspy did not immediately respond to a request for comment.

According to a complaint filed in district court in Los Angeles, Enternet and Conspy bundled their malicious software with music files, song lyrics and cellular telephone ring tones offered free on a range of websites. The software was also disguised as a security upgrade for Microsoft's Internet Explorer web browser.

Iwebtines bundled the spyware with a program that plays background music on blogs, the FTC said.

Once lodged on a victim's computer, the spyware was difficult to remove, the FTC said.

Microsoft, Google Inc and Webroot Software Inc helped with the investigation, the FTC said.

The US House of Representatives passed a bill in May that would stiffen jail sentences and establish multimillion-dollar fines for spyware purveyors, but the Senate has not yet taken it up.