Spyware Installer Zango Up to Old Tricks
Earlier this month, pop-ad installer Zango agreed to pay $3 million in what many describe as a landmark settlement with the Federal Trade Commission over charges that it installed software on people's computers without their permission.
According to the FTC, consumers have unwittingly downloaded Zango's software more than 70 million times, and as a result, have been subjected to more than 6.9 billion pop-up ads between 2002 and 2005. When consumers tried to rid themselves of the pop-ups, Zango deliberately made it difficult to identify, locate, and remove the adware.
According to the FTC, Zango is supposed to be complying with the settlement now, which is what Zango claimed it was doing in a Nov. 3, 2006, press release. The Bellevue, Wash., company said it "has met or exceeded the key notice and consent standards detailed in the FTC consent order since at least January 1, 2006."
Under the FTC agreement, Zango, a.k.a. 180solutions promised to:
* Cease communications with the computers of consumers who had unknowingly downloaded Zango software before Jan. 1, 2006, either by monitoring the user's Web surfing activities or delivering pop-up ads;
* Stop installing its adware without consumers' consent and instead offer clear and prominent disclosures;
* Be responsible for the actions of third-party distributors, which the company had blamed in the past for many of its bad practices.
According to Edelman and Howes, though, Zango has done a poor job of disclosure, such as failing to prominently tell consumers that if they download Zango software they will be subjected to pop-up ads and that their every key stroke will be communicated back to Zango.
The disclosures Zango does present appear only after the installation and execution of Zango's software, contrary to the terms of the proposed settlement, Edelman and Howes say.
In some cases, Zango software is still installed without any disclosure whatsoever.
The FTC is aware of the allegations and has no comment, said spokeswoman Claudia B. Farrell.
Keeing tabs on Zango is time consuming. Edelman and Howes said it took them 10 hours to come up with about eight types of violations. But they urge the FTC to stay on top of Zango and to force it to disgorge more ill-gotten profits than a mere $3 million, especially since Zango claims to have 20 million "users."
What's on the line if the FTC can't get Zango to comply? Well, not only this particular settlement but potentially all future actions against spyware installers, says CD&T's Alissa Cooper.
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