Microsoft Settles Computer-Fraud Case Related to Website Operated by Chinese Business

By Ed Silverstein October 02, 2012

Microsoft has settled a computer-fraud case involving a website operated by a Chinese business – and will drop a pending lawsuit.

The Associated Press reports that Peng Yong, the registered owner of, will collaborate with Microsoft and China's computer emergency response team to stop cyber-criminals from using the domain.

The company will also block malware connected to its domain.

Image via Shutterstock

The owner will direct subdomains listed in a "block-list" to a sinkhole computer managed by CN-CERT. He also will also identify owners of infected computers in China and help users to remove malware.

It was also reported that was used for the Nitol botnet and more than 500 other types of malware, Microsoft claims in court documents. At first, Peng denied allegations made in Microsoft’s lawsuit.

Also, has been linked to malicious computer activity since 2008. Microsoft said it located malware on new computers its employees purchased in various cities in China. Microsoft was later allowed to disrupt the botnet. Microsoft used a sinkhole to trick computers into communicating with researcher-controlled servers.

In response, Richard Domingues Boscovich, an attorney in Microsoft's digital crimes unit, said the settlement will make sure the malicious subdomains associated with will "never again be used for cybercrime."

"We believe the action against the Nitol botnet was particularly effective because it disrupted more than 500 different strains of malware -- potentially impacting several cybercriminal operations," he said.

"While there have been some reports that the malware in this case was being installed on computers at the factory, we have no evidence to support this claim,” he added in a statement. “Our study showed that the malware was more likely than not being pre-installed on computers after they had left the factory but before they were delivered to the consumer.”

"Cybercriminals did and continue to do this by having disreputable distributors or resellers load malware-infected counterfeit software onto computers that have shipped from the PC manufacturer without an operating system, or in some cases, with an operating system that a customer doesn't want. Those infected computers are then loaded with a desired operating system that is often laden with malware and then sold to unassuming customers," Boscovich added in the statement.

Edited by Brooke Neuman

TechZone360 Contributor

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