Firm Settles Spyware Suit for $7.5m

Internet marketer Intermix Media, which was sued in April by New York Attorney General Elliot Spitzer for installing spyware and adware on computers that came in contact with its advertisements, has settled the case for $7.5 million. Intermix also said it would stop distributing its adware, toolbar and redirect programs.

The penalty will be paid over a period of three years, Intermix said, but Spitzer spokesman Brad Maione told reporters that no agreement had been made and the investigation continues. Intermix said it reached "an agreement in principle" that would have to be approved by the courts.

"These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers' efforts to remove them from their computers," Spitzer said in April. "These issues can serve to be a hindrance to the growth of e-commerce."

Spitzer has made it a point of his tenure as New York's attorney general to go after what he sees as corporate wrongdoing against consumers. He has successfully taken on Wall Street and several insurance industry firms.

Spitzer has now turned his attention to the Internet, as he argues companies like Intermix are a threat to the success of e-commerce.