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I've been looking at my network preferences and I am concerned that these settings mean someone may be spying on me.

Can someone explain what proxies are and what does bypass proxy mean? And, should I be concerned about the Passive FTP Mode that is enabled?

I don't know what to look for or what are red flag as far as the entries for hosts and domains.

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Your screenshot doesn't indicate anything suspicious.

Most Macs will, by default, have the Use Passive FTP Mode (PASV) checkbox selected, so you need not be concerned about this.

In addition, most Macs will also have entries like yours in the Bypass proxy settings for these Hosts & Domains field.

In a nutshell, if your computer is connected to a network that has a firewall1 in place, you may need to specify proxy servers2 and/or select the Use Passive FTP Mode (PASV) checkbox to access some Internet sites.

1 A 'firewall' is designed to protect computers from unwanted/unauthorised network/Internet connections

2 A proxy server is a computer on a local network that serves as a 'middle man' between users and the Internet. It is designed to increase security and provide other administrative functions.

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