FTC official: peer-to-peer software poses risks

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Peer-to-peer (p2p) file sharing programs often carry hidden packages containing spyware, adware and viruses, a Federal Trade Commission (FTC) official testified on Tuesday before a U.S. House of Representatives oversight committee.

Mary Engle, associate director of the FTC's division of advertising practices, told the House Committee on Oversight and Government Reform that consumer use of peer-to-peer file sharing technology can "be risky." In addition to the bundled spyware and adware often associated with p2p downloads, she said users can inadvertently share personal or sensitive files with others.

She also noted that consumers who share files via P2P programs can expose themselves to civil or criminal lawsuits from organizations such as the Recording Industry Association of America (RIAA) enforcing copyright infringement and pornography laws. Engle also said that, because of the way P2P distributors label files, users can find themselves viewing unexpected pornographic images.

Jon Newton, the operator of P2pnet.net, a website that publishes news, stories, features and commentaries on digital media, distributed computing and associated technologies, disputed the FTC's position.

"I've been using a number of different p2p programs for years and I've yet to have an unpleasant experience because of them, and I don't know of anyone who has," he said.

"Not too long ago, a handful of commercial p2p file-sharing applications existed and some of them derived at least part of their income from advertising," he added. "Adware, and sometimes spyware, was bundled with them. Several were awful. But 90 percent or more of these companies have been shut down by the music industry and, if they exist at all, are corporate distribution vehicles. So, if spyware and adware are problems of those formerly independent applications, they're now as much industry problems as any other kind."

In her speech before the committee, Engle said the FTC has won victories over two p2p file-sharing distributors who allegedly mislead consumers.

In the FTC's case against Cashier Myricks Jr., who operates MP3DownloadCity.com, Myricks agreed to stop misrepresenting p2p products and to disclose the civil and criminal liability risks of downloading copyrighted material without the owner's permission.

Myricks, who claimed his service was "100-percent legal" for consumers to use the file-sharing programs for downloading and sharing music, movies and computer games, also refunded more than $15,000 to the customers who bought memberships to his website.

In FTC's case against Odysseus Marketing, the operator of Kazanon.com, the defendants agreed to stop allowing secret downloads. The defendants also agreed to pay monetary damages.

According to the FTC, Odysseus Marketing encouraged consumers to download free software that falsely claimed would allow consumers to engage in anonymous p2p file-sharing. The FTC also alleged that the defendant failed to disclose that its free software placed spyware and adware on PCs.

Newton's advice for consumers who want to protect themselves while using p2p programs "is to carefully read the documentation that comes with any p2p file-sharing application before installing it." He also pointed users to sites such as StopBadware.org and Spyware Warrior, which "give chapter and verse on dodgy applications."

Click here to email West Coast Bureau Chief Jim Carr.

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