Zango Settles for $3 Million

Last Friday, the Federal Trade Commission announced that Zango Inc., an Internet adware company, had agreed to pay a $3 million settlement to the U.S. government in response to assertions that it had covertly installed pop-up ad software on millions of computers. The matter had been investigated for more than a year.

Zango, formerly 180solutions Inc., is now required to offer consumers a way to uninstall its adware, and can no longer install its adware software onto personal computers without users’ permission. The company has also agreed to keep comprehensive information about any of their affiliates that install adware software for them.

The FTC indicated that affiliates installed Zango’s adware as part of an undisclosed “bundle” along with free content and software including screensavers, games, and peer-to-peer sharing programs, among other things. These affiliates failed to notify consumers that adware would be installed on their computers along with the actual content or software.

In addition, there were some instances of Zango’s adware being installed by taking advantage of browser security vulnerabilities. Code was installed on some computers to allow for the automatic reinstallation of the adware.

According to the FTC, Zango’s adware has been installed more than 70 million times, and has delivered more than 6.9 billion pop-up ads.

Zango has been the target of complaints for a long time, but frustrations with the company came to a head when The Center for Democracy & Technology filed a complaint with the FTC in January, accusing the company of deliberately ignoring the actions of its affiliates.

The adware firm says that it has now implemented new software in order to better keep track of its adware and to make sure that it will never be downloaded unknowingly by consumers.

Ben Edelman, a spyware researcher, is not convinced, and says that Zango will have to be closely monitored to ensure that it fully complies with the settlement’s requirements.

The settlement is a very positive sign for those who are involved in the fight against spyware and adware. Though the FTC has been involved in adware complaints in the past, this marks the first time that it has taken a shot at a major adware company. Other adware companies would be wise to follow suit by keeping close tabs on their affiliates and distributors, and clearly notifying consumers of the adware’s presence in free downloads.

In 2005, 61% of computers had spyware or adware software installed on them, comparing favorably to the 80% ratio the previous year, according to an AOL/National Cyber Security Alliance Online Safety Study that was issued in December.

Sources:

http://news.yahoo.com/s/nm/20061105/wr_nm/zango_ftc_dc

http://blogs.mediapost.com/online_minute/?p=1372

http://www.informationweek.com/security/showArticle.
jhtml?articleID=193502089