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In the midst of proposals that would impose criminal penalties for distribution of copyrighted files through peer-to-peer networks without authorization and proposed legislation that would require consent from computer users before spyware could monitor their movements on the Internet, the Federal Trade Commission (FTC) has issued a recent consumer alert cautioning consumers about the risks of file sharing and spyware. At the same time, the FTC provides prudent suggestions as to how to minimize these risks. BACKGROUND In its alert, the FTC notes that on a daily basis millions of computer users share files online. Through file sharing, users can gain access to music, games, software and other information. The process is simple. A computer user simply downloads special software that connects his or her computer to an informal network of other computers using the same software. The software often times is free and accessible, and millions of users can be connected through such software at the same time. THE RISKS While there are some benefits to this file sharing, the FTC in its alert highlights associated risks. As an example, a computer user connected to file sharing programs unwittingly may allow other people to copy his or her private files that never were intended for sharing. Or, a user very well could download copyrighted material, which could lead to legal action. Even still, the downloading of files could transmit a virus or lead to a security breach. And, a user unintentionally could download pornography that is classified as something else. RECOMMENDATIONS In light of these risks, the FTC provides specific recommendations in its alert designed to secure personal information stored on computers. These recommendations are as follows: � File sharing software should be set up carefully. If the proper settings are not implemented when software is installed, access could be opened to files not intended for sharing. � “Be aware of spyware.” The FTC notes that some file sharing programs also install spyware. Spyware is intended to monitor a computer user’s browsing habits and then sends corresponding data to certain third parties. Because spyware can be difficult to detect, the FTC recommends that users buy software that prevents the downloading of spyware. � Computer users’ connections should be closed because simply closing file sharing program windows does not close network connections. If network connections remain open, file sharing can continue and this could lead to an increased security risk. Users that have high speed or broadband access remain connected to the Internet unless their computers are turned off or their Internet service is disconnected. According to the FTC, such “always on” connections may allow others to copy shared files at any time. Also, some file sharing programs open automatically every time a computer is turned on. Thus, it may be prudent to adjust the controls of the programs to prevent file sharing from automatically opening. � Anti-virus software should be used and updated regularly. Downloaded files can be mislabeled, and can hide a virus or other undesirable content. While virus software filters should prevent computers from receiving destructive files, the FTC notes that computer security experts recommend that files with the extensions .exe, .scr, .lnk, .bat, .vbs, .dll, .bin and .cmd should be avoided. � Parents should talk candidly with their children about downloading files on the Internet. Children may think they are downloading games, music or videos, but they unintentionally may download pornography and violent content. Furthermore, children may not appreciate the security and other risks associated with file sharing. FOOD FOR THOUGHT The risks highlighted by the FTC are cause for concern. The risk abatement recommendations provided by the FTC are sound and provide at least some help in minimizing the perils of sharing files online. Eric Sinrod is a partner in the San Francisco office of Duane Morris ( www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. Mr. Sinrod’s Web site is www.sinrodlaw.com, and he can be reached at [email protected] . To receive a weekly e-mail link to Mr. Sinrod’s columns, please send an e-mail with the word Subscribe in the subject line to [email protected] .

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