The US Federal Trade Commission (FTC) has accepted a $2 million settlement in an operation against an illegal spyware company.

Enternet Media, Conspy & Co as well as Lida Rohbani, Nima Hakimi and Baback Hakimi, all based in California, distributed software called Search Miracle, Miracle Search, EM Toolbar, EliteBar and Elite Toolbar, all of which tracked activity, changed browser settings and added advertising toolbar to people's Web browsers.

Judge Christine Snyder ordered that the defendants be prohibited from interfering with computer use and permanently prohibited from making misleading representations regarding the performance, features, and cost, of any software, including misrepresenting that the code is an Internet browser upgrade or other computer security software, music, song, lyric or cell phone ring tone.

The websites of the defendants and their affiliates caused installation boxes to pop up on consumers’ computer screens. In one variation, the boxes offered a variety of freeware, including music files, cell phone ring tones, photographs, wallpaper and song lyrics. In another, the boxes warned that consumers’ Internet browsers were defective, and offered free browser upgrades or security patches.

Users who downloaded the supposed freeware or security upgrades did not receive what they were promised, Instead, their computers were infected with spyware that interfered with their computers and was difficult to uninstall, the FTC said.

The defendants' software tracked Internet activity, changed home-page settings and inserted a large frame onto browser windows that displayed advertisements. At the FTC’s request, the court froze the operation’s assets last autumn and ordered it shut down. The settlement requires the defendants to give up just over $2 million of their spyware-related profits and includes a suspended judgment of $8.5 million.

The FTC said it had brought the case with assistance Microsoft, Webroot and Google.