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Zango adware tactics foiled

Zango has settled charges with theFederal Trade Commission (FTC) over thecompany's unfair and deceptive methods of distributing its adware applications.

The adware maker will have to stop serving advertisements on systems thatinstalled the software before 1 January 2006. A Zango spokesperson declined tosay how many of its 20 million installations are affected by the ruling, butclaimed it was a "minimal number".

Zango also agreed to give up $3m in ill-gotten gains.

"Consumers' computers belong to them, and they shouldn't have to accept anycontent they don't want," said Lydia Parnes, director of the FTC's Bureau ofConsumer Protection.

"If consumers choose to receive pop-up ads, so be it. But it violates federallaw to secretly install software that forces consumers to get pop-ups thatdisrupt their computer use."

Zango until last September was known as 180solutions. The company's adware isbundled with free content such as games, screen savers and peer-to-peer filesharing software. Users installing the free software also receive an applicationthat monitors their network connection and serves pop-up ads.

The FTC charged that Zango deliberately made it difficult to identify, locateand remove the software.

Zango relies on third party distributors to push its adware, paying them anestimated 50 cents for each successful installation. Critics charge that payingdistributors for each installation creates an incentive for non-consensualinstallations.

Botnet operators for instance can install the software on computers that areunder their control to collect the affiliate fee.

Zango claims that it is cracking down on these practices. The softwareperiodically informs that user of its presence and provides instructions on howto remove it. Last year the company filed lawsuits against seven of its distributors all of which were located outside of the US but later dropped thecharges.

The Center for Democracy and Technology(CDT) filed a complaint with the FTC about Zango last January. The groupheralded the settlement as an important precedent and policy setting documentfor the adware industry.

"If companies are operating outside of the understanding in the FTC rulingand engage in deceptive practices, they are going to face potential punishment.That's a very important message for any company that makes its business in thedownloadable software space," CDT spokesperson David McGuire

Among things, the settlement forces adware makers to get explicit consentfrom the user to install the software and prevents them from hiding the consentprovision in the end user license agreement. The FTC furthermore is holdingZango accountable for non-consensual installations from its partners.

Zango in response to the settlement stressed it doesn't constitute anadmission that Zango violated the law. The company said that it welcomed the newstandards for the software download industry.

The company over the past years has been working to rid itself of the imagethat its software poses security risks. It has filed legalcharges against ZoneLabs for callingthe labelling the application as spyware anddroppedits case after the security vendor downgraded the security.

Many security and anti-spyware applications detect the software and offerusers help in removing the code.McAfee labels thesoftware as a " Potentially Unwanted Program" andSymantecdescribed the applications as a "security risk"


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