RealTime IT News

Group Raises Zango's FTC Commitment Issues

Just two weeks after Zango (the former 180solutions) settled deceptive trade practices charges with the Federal Trade Commission (FTC), a Washington public-policy advocacy group is complaining that the controversial adware distributor is not living up to its end of the deal.

After agreeing in a settlement not to install its adware without consumers' consent, the Center for Democracy and Technology (CDT) said Monday Zango continues to fail to properly identify the source of its advertisements.

"The FTC must make clear that it expects Zango to follow the legally binding settlement to the letter or face serious consequences," CDT Policy Analyst Alissa Cooper said in a statement.

"If the FTC cannot enforce its settlement in this case, the Commission's authority to prevent fraud on the Internet will come under heavy scrutiny."

On Nov. 3, Zango agreed to return $3 million in "ill-gotten gains" from its scheme to use third-party affiliates offering free software, such as screensavers, games and utilities, to install Zango adware on consumers' computers often without their consent.

The software generated almost seven billion unsolicited pop-up ads on consumers' computers and, according to the FTC, Zango "deliberately made it difficult" to identify, locate and remove the adware once it was installed.

Under the terms of the settlement, The Bellevue, Wash.-based Zango agreed not to install its adware without consumers' consent and to provide consumers with a way to remove the adware from their computers.

On the day of the settlement, Zango claimed it "met or exceeded the key notice and consent standards detailed in the FTC consent order since at least Jan. 1, 2006."

But the CDT complaint claims that as late as October, as many as 10 percent of the ads displayed by Zango lacked all forms of notice.

"We urge the FTC to require Zango to rescind its Nov. 3 press release and issue a retraction statement," the CDT states in the complaint. "This is the best way to bring Zango's rhetoric in line with its actions and to alert Zango to the fact that deception will not be tolerated."

In an e-mail statement to internetnews.com, Zango said, "we are reviewing the information released today. We take concerns relating to the FTC consent order announced earlier this month very seriously and welcome any and all input about our business practices and the protection of consumers."

Zango also said Richard Purcell, CEO of the Corporate Privacy Group and the former chief privacy officer at Microsoft, has been hired to audit the company's compliance with the FTC settlement. His report is due in approximately two weeks.

"We are working diligently to meet and exceed every single one of the requirements set forth by the FTC," Zango said in its statement.

In January, CDT filed a complaint with the FTC against Zango. In the complaint, CDT identified what it called unfair and deceptive practices Zango employed in distributing its adware to millions of people over a period of two years.