WASHINGTON, DC – Zango, Inc., the adware distributor formerly known as 180solutions, Inc., has agreed to settle charges brought by the Federal Trade Commission that the company “used unfair and deceptive methods to download adware and obstruct consumers from removing it, in violation of federal law,” the FTC announced today.The settlement prohibits future downloads of Zango’s adware without consent of the consumer, requires Zango to provide a clear means to remove their adware from users’ computers, and forces Zango to give up $3 million in “ill-gotten gains,” according to the FTC.
In the analysis of the proposed consent order prepared by the FTC to “aid public comment,” the FTC summarizes the allegations against Zango.
“The Commission’s complaint alleges that from at least 2002 through 2005, the primary way Respondents distributed their adware was through a network of affiliates,” the summary analysis states. “These affiliates often recruited large numbers of third-party sub-affiliates who purported to offer, generally for free, some content to the public, such as Internet browser upgrades, utilities, games, screensavers, peer-to-peer file sharing software and/or entertainment content (hereinafter ‘lureware’) and bundled the adware with that content.”
A representative of the FTC said the charges stem from a concern for consumer rights.
“Consumers’ computers belong to them, and they shouldn’t have to accept any content they don’t want,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection, in a press release issued today by the FTC.
“If consumers choose to receive pop-up ads, so be it,” added Parnes. “But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use.”
The FTC also alleges that “consumers often have been unaware that Respondents’ (Zango) adware would be installed on their computers because it was not adequately disclosed to them that downloading the lureware would result in installation of Respondents’ adware.”
“In some instances, no reference to the adware was made on websites offering the
lureware or in the install windows,” the FTC states in its summary analysis. “In others, information regarding the adware was available only by clicking on inconspicuous hyperlinks contained in the install windows or in lengthy terms and conditions regarding the lureware. Often the existence and information about the effects of Respondents’ adware could only be ascertained, if at all, by clicking through multiple inconspicuous hyperlinks.”
In its complaint, the FTC also alleges that Zango “knew or should have known of their affiliates’ and sub-affiliates’ widespread failure to provide adequate notice of their adware and obtain consumer consent to its installation.”
Along with Zango, the FTC names the company’s principals, Keith Smith and Daniel Todd, in the complaint.
According to the FTC press release, the Commission voted unanimously, 5-0, to accept the proposed consent agreement, and will publish an announcement concerning the agreement to the Federal Register “shortly.”
The agreement is now subject to public comment for 30 days, starting today and continuing through December 5. Thereafter, the Commission will decide whether to make the agreement final.
Comments should be addressed to:
FTC, Office of the Secretary
Room H-135,
600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580.
In its press release, the FTC requests that “any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.”
The proposed consent agreement, which has been posted to the FTC website, notes that the “agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.”
Documents relating to the Zango complaint, including the proposed consent agreement and the FTC’s summary analysis for aid of public comment, are available via the FTC website at: http://www.ftc.gov/os/caselist/0523130/index.htm
