Adware maker caught cheating on legal settlement

By Tom Sanders on Nov 21, 2006 10:39 AM
Filed under Security

Zango fails to properly disclose its adware application to users.

Adware maker Zango doesn't comply with the terms of a November settlement with the US Federal Trade Commission (FTC), security researchers claim.

Zango early November agreed to pay a US$3 million fine for its "unfair and deceptive" methods of distributing its adware.

Under the proposed terms of the agreement, the adware maker has to stop serving advertisements to older versions of its application. It also had to clearly identify pop-up ads that the software served to users and had to clearly obtain consent from users before the software could be installed.

Zango at the time claimed that it had been in compliance with the new rules since the beginning of this year.

Spyware researchers Ben Edelman and Eric Howes however charged that the violations have continued throughout the year and continued after the settlement went into effect. They called upon the FTC to make Zango retract its claim of compliance with the settlement.

"Bad practices continue at Zango - practices that, in our judgment, put Zango in violation of the key terms and requirements of the FTC settlement," the two wrote in a blog posting.

They also offered screen shots and video captures of Zango software acting in violation of the FTC settlement terms.

The Zango application servces pop-up advertisements and monitors users internet usage. The software is bundled with content such as games and movie cliips that in some cases are posted on social media websites such as Myspace and Google's Orkut.

A spokesperson for Zango told vnunet.com that it is reviewing the report and said that the company is "working diligently to meet and exceed every single one of the requirements set forth by the FTC."

The FTC settlement is open for public comments through 5 December. In addition to Edelman and Howes, the Centre for Democracy and Technology (CDT) too filed a comment with the FTC, recommending that compliance is closely monitored and enforced.