The FTC has fired its opening salvo on the spyware industry – the software that watches what you do online then wreaks havoc with you.

he Federal Trade Commission formally announced yesterday its first assault against spyware – bits of computer code that surreptitiously install themselves on the computers of Internet users to track their activities, push them to Web sites, barrage them with advertisements, and otherwise wreak havoc with their machines.

The commission filed a lawsuit in a federal court in New Hampshire last week against Sanford Wallace, the owner of Seismic Entertainment Productions and Smartbot.net, contending that Mr. Wallace and his companies had violated federal law, which prohibits “unfair or deceptive acts or practices in or affecting commerce.”

“This may be our first case,” said Lydia Parnes, the acting director of the commission’s Bureau of Consumer Protection, at a news conference in Washington yesterday. “But it won’t be our last.”

The suit, which seeks an injunction against Mr. Wallace’s companies, claims they exploited vulnerabilities in Microsoft’s Internet Explorer Web browser – the most widely used browser – to seize varying amounts of control over users’ computers. It also charges that the spyware deployed by the two companies changed users’ home pages, installed advertising and software programs on the users’ computers, and caused a deluge of pop-up windows to appear on computer screens – without the users’ consent. In some instances, the complaint says the codes caused computers to “malfunction, slow down, crash or cease working properly.”

“I understand what the F.T.C. is trying to do,” Mr. Wallace said in a telephone interview, “but we believe that what we’re doing is legal.”

Just how widespread the problem of spyware has become is difficult to measure, but in a workshop held by the F.T.C. last spring, representatives of Microsoft complained that nearly half of the system failures reported by users of its Windows operating system were traceable to spyware infestation. And a representative of Dell said that complaints about spyware had eclipsed all other problems on its technical help lines.

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