New York State attorney general Eliot Spitzer filed a lawsuit against Intermix yesterday, charging that it violates state law prohibiting false advertising and deceptive business methods, reported the New York Times. He said the adware firm failed to properly inform users that along with free downloads they wanted, they were also unknowingly installing intrusive software that delivered pop-up ads, redirected Web sites and placed advertising toolbars. Intermix stock was down sharply yesterday afternoon. The adware firm also operates the popular MySpace.com.

The lawsuit requests a court order prohibiting the company from installing programs without warning, compelling it to disclose revenue from such products and imposing a penalty to be determined later.

The AG's office estimated that more than 3.7 million programs had been downloaded by New York residents. Intermix said it has earned $250,000 from New York state computer users.

"Spyware and adware are more than an annoyance," Spitzer said in a statement. "These fraudulent programs foul machines, undermine productivity and in many cases frustrate consumers' efforts to remove them from their computers." He also said the adware was too difficult to remove.

Intermix said it "does not promote or condone spyware" and had "voluntarily ceased distribution of the applications at issue earlier this month." According to a statement on the Intermix website, it "remains committed to putting this legacy issue behind it as soon as practicable."