Microsoft's Windows Authentication Software Draws Virus, Lawsuits

Security researchers have identified a worm virus masked to appear as Microsoft's Windows Genuine Advantage anti-piracy program, while end users have filed a second lawsuit against the software giant's use of the actual program.

Workers at anti-virus specialist Sophos were among the first to unearth the worm disguising itself as WGA. Dubbed by the firm as Cuebot-K, the virus is spreading over AOL's popular instant-messaging network posing as Microsoft's controversial anti-piracy software.

Sophos said Cuebot-K is registering itself on infected PCs as a new system driver service named "wgavn" that also bears the public display name of "Windows Genuine Advantage Validation Notification."

The virus automatically runs during system startup, and users who view the list of services offered by the threat are informed that removing or stopping the service will result in system instability.

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Researchers indicated that once in place, Cuebot-K disables the Windows OS firewall and opens a backdoor to infected computers, which could potentially allow hackers to gain remote access of a machine to spy on users or launch DDOS (distributed denial-of-service ) attacks.

Adding to the threat is widespread controversy over WGA that has forced Microsoft to offer an updated version of the program, a previous iteration of which some people have labeled as having spyware-like capabilities.

End users looking for that update could unknowingly expose themselves to Cuebot-K, experts said.

"People may think they have been sent the file from one of their AOL IM buddies, but in fact the program has no friendly intentions, and technical Windows users wouldn't be surprised to see WGA in their list of services, and so may not realize that the worm is using that name as a cloak to hide the fact that it has infected the PC," said Graham Cluley, senior technology consultant at Sophos, based in Abingdon, Oxfordshire, England.

"Once in place, this malware disables the firewall and opens a backdoor by which hackers can gain control over your computer to steal, spy and launch DOS attacks," Cluley added.

Microsoft representatives didn't immediately return calls seeking comment on the WGA-themed virus.

Adding to the company's headaches over WGA, Microsoft has also been hit with a second class-action lawsuit filed over the capabilities of a previous version of the anti-piracy software.

In a case filed on June 29 in the United States District Court of Seattle, plaintiffs Engineered Process Controls and Univex, along with individual end users David DiDomizio, Edward Misfud and Martin Sifuentes, have charged that Microsoft's technology amounts to a form of spyware.

The suit specifically contends that Microsoft intentionally duped its customers by delivering WGA as part of a critical security update without telling them that the anti-piracy program would secretly communicate with its own servers.

Since the program "gathers data that can easily identify individual PCs," including a machine's IP address and BIOS information, and could potentially be used to gather other types of information, it is akin to malicious threats, the suit claims.

In doing so, WGA violates Washington's existing anti-spyware laws, according to the suit, which mirrors a similar claim filed by a California man on June 26.

That legal action, brought forward in the U.S. District Court in Seattle by Los Angeles resident Brian Johnson, claims that Microsoft failed to properly disclose all the details of WGA when the technology, meant to help stop the widespread pirating of Microsoft's Windows operating system, was upgraded in April.

While WGA was first introduced in 2004, the suit alleges that the feature became similar to a form of spyware when it was expanded to include a system that made contact with Microsoft's servers to help the company identify people who may be using pirated versions of its market-leading operating system.

The updated version of the WGA tool included two separate components, WGA Validation and WGA Notifications, which, respectively, promised to determine whether a copy of Windows is pirated or not and alert users who Microsoft believes are running illegal copies of its software.

However, WGA's notification aspect was discovered to have been "phoning home" to Microsoft's servers on a daily basis, touching off a wave of controversy among those who believe the feature could be used by Microsoft to keep tabs on people using its software.

On June 27, Microsoft agreed to remove the controversial notification component from WGA, announcing an updated version of the tool that is being delivered to millions of
Windows XP users via Automatic Updates with one major change.

Previously, a PC that had installed WGA Notifications checked a server-side configuration setting upon each log-in to determine if WGA Notifications should run or not. This daily configuration file check has been removed in the updated WGA Notifications package.

The company said WGA Validation still will check periodically to determine whether the version of Windows is genuine. Microsoft officials did not immediately respond to calls seeking comment on the new WGA lawsuit, but have labeled the claims of the initial class-action suit as "without merit."

"This [suit] distorts the real objectives of the [WGA] program and obscures the real issue, which is the harm to consumers posed by software piracy," Jim Desler, a Microsoft spokesperson, said of Johnson's lawsuit. "As with all of our programs we've gotten constructive customer feedback, the program has evolved and we've made improvements; Microsoft continues its efforts to foster better communications with its customers."

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