N.J. AG reaches $1 million settlement with gaming company

Bryan Cohen Nov. 20, 2013, 7:01pm

TRENTON, N.J. (Legal Newsline) - New Jersey Acting Attorney General John Hoffman announced a $1 million settlement Tuesday with E-Sports Entertainment LLC to resolve allegations that it spied on users computers.

E-Sports allegedly created and deployed malicious software code that infected the computers of its customers who subscribed to its anti-cheat services for certain online video games. The code allegedly allowed E-Sports to monitor users' computers and to mine for bitcoins, a virtual form of currency. During a two week period, E-Sports allegedly used the computing resources of 14,000 computers in New Jersey and throughout the U.S. to generate $3,500 by mining for bitcoins.

"This is an important settlement for New Jersey consumers," Hoffman said. "These defendants illegally hijacked thousands of people's personal computers without their knowledge or consent, and in doing so gained the ability to monitor their activities, mine for virtual currency that had real dollar value, and otherwise invade and damage their computers."

Under the terms of a settlement, E-Sports must pay the state $325,000 of its $1 million obligation with the rest suspended, provided the company adheres to all settlement terms within the next 10 years. E-Sports must also refrain from deploying software code that downloads to consumers' computers without their authorization and knowledge. E-Sports will submit itself to a 10-year compliance program and create a dedicated page on its website specifying the type of data it collects, how it collects the data and how the information is used.

"This case should serve as a message that we are committed to protecting New Jersey consumers, and that we will hold accountable anyone who seeks to exploit them through misleading claims, deceptive practices or the invasion of their computer privacy," Hoffman said.

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