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Some questions about adware.

I used to have some adware (Hotbar and MyWebSearch) and was wondering how adware like this generally monitors internet usage.

Lets say you install some of this adware, can they see only the internet history that is in the API, or can they actually get access to the history files?

For example, old Internet Explorer versions used to store in Index.dat files in the Local Settings directory on XP. Would they be able to view these files?

What else might they/could they do? Periodically check the un-deleted history in the API? Collect every single URL as they are being made?

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