Zango Agree To 3Ml Fine\Stop Distro With FTC

TeMerc · Nov 3, 2006

Zango agrees to stop distributing thier software under agreement with FTC.

In the Matter of Zango, Inc. f/k/a 180Solutions, Inc., a corporation, Keith Smith, individually and as an officer of the corporation, and Daniel Todd, individually and as an officer of the corporation.
FTC File No. 052 3130
November 3, 2006

Agreement Containing Consent Orders

Analysis of Agreement Containing Consent Orders to Aid

Public Comment

Complaint

News Release

From Zango Blog:

BELLEVUE, Wash. – Nov. 3, 2006 – In announcing a settlement agreement with Zango, the Federal Trade Commission (FTC) today established standards for the online downloadable software industry and, most importantly, provided online consumers with a new and higher level of protection. Zango has met or exceeded the key notice and consent standards detailed in the FTC consent order since at least January 1, 2006.

Zango is an online media company that fulfills consumers’ growing demand for free, sought-after digital content, such as videos and games. The FTC, which initiated its investigation of Zango in September 2005, alleged that, in some circumstances in the past, the company’s desktop advertising software was inadequately disclosed to users and its installation and uninstall practices were unfair.

“Early in our business, and as we’ve acknowledged, we relied too heavily on our affiliates to enforce our consumer notice and consent policies. Unfortunately, this allowed deceptive third parties to exploit our system to the detriment of consumers, our advertisers and our publishing partners. We deeply regret and apologize for the resulting negative impact,” said Keith Smith, CEO of Zango. “The FTC’s leadership in providing clarity around best practices is a welcome and significant step forward for Zango and our industry. We embrace the new standards and will continue to create, abide by and strive for best practices that protect consumers.”

The “Agreement Containing Consent Order” is a settlement of the FTC’s investigation and explicitly “does not constitute an admission [by Zango] that the law has been violated.” Zango will pay a $3 million fine as part of the settlement.
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Zango Corporate Blog
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TeMerc · Nov 3, 2006

Update from ReveNews:

Spyware researcher Ben Edelman says he has proof that Zango hasn't really cleaned up its act and that he'll post his proof in the coming weeks.

"180 continues plenty of bad practices, including some unlabeled ads, materially misleading installations that fail to disclose key aspects of 180's effects, and installation attempts predicated on security exploits.

I commend the FTC's efforts here, but serious diligence will be required to assure that 180 actually complies with its many obligations under the settlement. At this instant, I am confident that 180 is not in compliance."
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ReveNews

TeMerc · Nov 3, 2006

Conference Call Replay
Earlier today, Zango hosted a conference call to discuss this morning’s announced FTC settlement. Zango CEO Keith Smith, Zango Executive Vice President, General Counsel and Chief Compliance Officer Ken McGraw, and Hogan & Hartson Partner and former FTC Commissioner Christine A. Varney participated.

To hear a replay of the call, please dial toll-free (800) 642-1687. The conference call replay ID is: 1552048. The replay will be available through Friday, November 17, 2006.

ronjor · Nov 3, 2006

Zango said it has put new software and systems in place to more closely monitor its adware and prevent it from being downloaded on computers without users' permission.

All consumers who download Zango's desktop advertising software now see a "fully and conspicuously disclosed, plain-language" notice, it said.
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Article

Judging by these statements, I would say, don't download the software. Will others see it that way?
More than likely, Zango will continue to rake in huge profits because people simply do not read the fine print.

TeMerc · Nov 4, 2006

From Sandi Hardmeier, come this brief write up about some of the particulars of the deal.

As always, nice work Sandi!

This is great news, as is the specifics of the orders which are wide reaching and will remain in effect for 20 years from the date of the order or the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later.

$1 million is payable within 10 days, another $1 million within 6 months, and the final $1 million within 12 months. If they don't pay, they get charged interest. The fine shall be used to provide "relief as [the FTC] determines to be reasonably related to Respondents’ practices alleged in the complaint, and to pay any attendant costs of administration."
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Spyware Sucks Blog

ronjor · Nov 6, 2006

Spyware Researcher Claims Zango Hasn't Mended Its Ways

"[The company] continues plenty of bad practices, including some unlabeled ads and installation attempts predicated on security exploits," said Edelman. "I have the proof, and I expect to post this on my Web site in the coming weeks, subject only to my busy travel schedule." Zango's adware has been installed over 70 million times, according to the FTC. Its adware includes programs such as Zango Search Assistant, 180Search Assistant, Seekmo, and n-CASE. Often installed by third-party affiliates, the software monitors Internet use to display pop-up advertising. To date, the adware has displayed some 6.9 billion pop-up ads.
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Article

TeMerc · Nov 20, 2006

Ben Edelman & Eric Howes Tag Team Zango

TeMerc said:

This dynamic duo, pairing together for what I think is the first time are fully loaded and ready to show how Zango is not quite living up to their claims of changing their ways as they have been saying since the FTC ruling and fine.

But to anyone who has followed Zango and heard\read their statements and wondered just what kind of hallucinogens they put in the coffee, this is so not news. Time and time again the bone heads at Zango have been caught with their proverbial hands in the cookie jar and time and time again they justify the actions uncovered by the 'zealots with absurdities that any clear thinking human being could see thru. Lets hope the FTC gets a good read and takes notes.

Did anyone really think a paltry $3Million was going to deter them? Come on people!!
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Ben Edelman & Eric Howes said:

Earlier this month, the FTC announced the proposed settlement of its investigation into Zango, makers of advertising software widely installed onto users' computers without their consent or without their informed consent (among other bad practices).

We commend the proposed settlement's core terms. But despite these strong provisions, bad practices continue at Zango -- practices that, in our judgment, put Zango in violation of the key terms and requirements of the FTC settlement. We begin by explaining the proposed settlement's requirements. We then present eight types of violations of the proposed settlement, with specific examples of each. We conclude with recommendations and additional analysis.

Except where otherwise indicated, this document describes only downloads we tested during November 2006 -- current, recent installations and behaviors.
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Bad Practices Continue at Zango, Notwithstanding Proposed FTC Settlement and Zango's Claims

TeMerc · Nov 21, 2006

The Zango Spin Dr. is in the house:

Several researchers released information this week pertaining to our settlement agreement announced earlier this month with the Federal Trade Commission (FTC). We are committed to meeting and exceeding our obligations, take concerns relating to the FTC consent order very seriously and welcome any and all input about our business practices and the protection of consumers.

The FTC's leadership in providing clarity around best practices is a welcome and significant step forward for Zango and our industry. More importantly, online consumers are better protected today because of the FTC’s efforts. We embrace the new standards, of which we have met or exceeded the key notice and consent standards since January 1, 2006. We will continue to create, abide by and strive for best practices that protect consumers and make the online economy increasingly valuable for consumers, advertisers, Web publishers and content providers.

We are working diligently to meet and exceed every single one of the requirements set forth by the FTC. Additionally, we are fortunate to have a preeminent voice in online safety and privacy issues assisting us in our efforts. Richard Purcell, CEO of the Corporate Privacy Group, has been engaged to audit Zango’s compliance. Richard will report his findings in the next few weeks.

Regarding the Zango consent order, a 30-day public comment period is presently open and will remain open through December 5, 2006.
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Zango Blog

ronjor · Dec 2, 2006

Myspace Phish Attack Leads Users to Zango Content

A while ago on the Spywareguide Blog, I covered a technique being used in Peer to Peer land involving URLs being embedded in Quicktime movies, which would then pop open a website. This has now been taken to the next level, with an intensive and seemingly never ending Phish attack, the sole aim of which seems to be directing end-users to a collection of Zango movies on a pornographic website. The Phish pages are hosted on compromised servers - presumably the people doing the hacking aren't particuarly brilliant at it, because they keep getting found out (an example of them being caught in the act can be seen here).
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Story

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