Bundled software is any software that includes other software with the installation. The bundled software is usually described in the EULA, or End User License Agreement, that may or may not be shown at the time of downloading. A popular example is Peer to Peer software that bundles additional software with their application in order to offset cost of giving the software away for free.
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Not considered spyware, however because it come factory installed users may want to examine EULA's and software operation because software has rights to update self.