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  1. #1
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    January 18th, 2005
    New York
    FTC Adware Settlement a Landmark for Downloadable Software
    (1) FTC Adware Settlement a Landmark for Downloadable Software

    Earlier this month, the Federal Trade Commission reached a landmark
    settlement with Bellevue, Wash.-based adware developer Zango Inc. One
    of the largest distributors of adware in the country, Zango has for
    many years been associated with a range of highly suspect practices
    used to install the Zango software on millions of users' computers.
    The settlement not only required Zango to cut its ties to many
    consumers who may have received the software surreptitiously, it also
    helped to clarify what constitutes acceptable behavior in the
    downloadable software space. If properly enforced, the settlement has
    the potential to be a landmark for consumers and software
    distributors alike.

    In January, the Center for Democracy & Technology (CDT) filed a
    lengthy complaint with the FTC against Zango, which was formerly
    known as 180solutions. In the complaint, CDT identified many of the
    unfair and deceptive practices Zango and its affiliates employed in
    distributing its adware to millions of people over a period of two

    The complaint raised concerns that Zango's business model, which
    encouraged a network of loosely monitored affiliates to install the
    Zango software on as many computers as possible, was perpetuating a
    continuous barrage of unfair practices involving Zango software. The
    terms of the FTC settlement go to the heart of issues raised in CDT's
    original complaint.

    More important than the million payment called for under the
    settlement, is a requirement that Zango cease communications with
    Internet users who downloaded the Zango/180solutions software before
    Jan. 1, 2006. Not only does this provide relief for many unwitting
    Zango "users," it also sends a message that companies will not be
    permitted to retain customer bases built on patterns of unfair

    Two other aspects of the settlement could have far-reaching positive
    implications for the downloadable software market.

    First, the complaint requires that Zango not install software on
    users' computers without first obtaining "express consent." As
    defined in the settlement, express consent must be clear, contain all
    relevant disclosures, and perhaps most importantly, be obtained
    separate from the end-user license agreement (EULA). Distributors of
    unwanted software often hide their disclosures in EULAs in hopes that
    users will simply click through them without reading.

    Second, the settlement makes clear that Zango is responsible for the
    actions of its affiliates. Too many downloadable software companies,
    Zango included, have attempted to disavow bad practices undertaken by
    their affiliates on their behalf. This settlement makes clear that
    these companies can no longer sit back and claim ignorance as their
    affiliates violate the trust of Internet users.

    The conditions of the settlement should send a clear message to
    adware developers that they must obtain real consent before
    installing software on users' computers, and that they cannot turn a
    blind eye to the activities of their affiliates. The key now is
    ensuring that Zango, which has struggled before with efforts to
    reform its practices, actually lives up to its obligations under the

    FTC-Zango Documents

    Original CDT Complaint

    (2) CDT Urges Aggressive Enforcement of Settlement Terms

    A few weeks after the FTC announced its proposed settlement with
    Zango, CDT filed comments as part of a public comment period
    preceding the commission's final approval of the settlement
    agreement. In the comments, CDT praised the commission for its work
    on the landmark adware settlement, but also raised concerns that
    Zango -- despite its public statements to the contrary -- is still
    engaging in some of the same practices that necessitated the
    settlement in the first place.

    CDT argued that permitting Zango to openly flout the settlement's
    terms could undermine its value. CDT further urged the commission to
    make clear that it expects Zango to follow the legally binding
    settlement to the letter, or face serious consequences.

    In a press release issued on November 3, 2006, Zango claimed that it
    "has met or exceeded the key notice and consent standards detailed in
    the FTC consent order since at least January 1, 2006." In its
    comments to the FTC, CDT provided substantial evidence that that is
    simply not the case. In particular, CDT documented instances in which
    Zango failed to properly identify the source of its advertisements as
    recently as November 10.

    Ben Edelman and Eric Howes, two well-known anti-spyware investigators
    also filed comments. Edelman and Howes documented evidence from after
    the settlement showing even more pervasive compliance failures.

    CDT has personal direct experience with Zango that begs the question
    of whether the company is truly willing -- or even able -- to truly
    reform its distribution practices under its current business
    structure. For nearly two years CDT held consultations with Zango,
    alerting the company to deceptive installation practices by its
    affiliates. Although Zango was willing to cut ties with bad
    affiliates after the fact, the company repeatedly demonstrated an
    unwillingness to change the fundamental aspects of its business model
    that led to repeated violations.

    Although CDT is hopeful that Zango is serious about living up to its
    obligations under the FTC settlement, the commission may have to take
    a strict, hands-on approach to ensure the settlement's conditions are

    CDT Comments

    Edelman-Howes Comments

    (3) Downloadable Market Improving With Better Enforcement,

    Although many forms of unwanted software continue to tarnish the
    Internet experience for millions of users around the world, improved
    enforcement, education and technical coordination are helping to
    create a safer, more understandable market for downloadable software.
    Enforcement actions by the FTC and technology-savvy state attorneys
    general, coupled with the coordination and educational efforts of
    groups like the Anti-Spyware Coalition and, have
    helped consumers to better protect themselves from threats and have
    helped software distributors understand their obligations to users.

    For years, many distributors of unwanted adware relied on the newness
    of the downloadable software market to exploit the gray areas of
    acceptable practices. As anti-spyware companies have worked together
    to provide clear definitions of the behaviors associated with
    unwanted software, and law enforcers have punished companies that
    step over the line, those gray areas have begun to evaporate.
    Although there will likely always be adware and spyware scammers who
    brazenly violate the law to exploit consumers, it is getting harder
    and harder for companies to engage in deceptive activities while
    still retaining a sheen of legitimacy. This represents a victory for
    those allied in the fight against unwanted adware and spyware.

    A critical element of creating a safer, more understandable market
    for downloadable software lies in educating legitimate advertisers
    about ethical behavior in the adware space. CDT's "Following the
    Money" series of reports found that many legitimate, national
    companies advertised through Zango even while it was engaged in
    deceptive practices. So long as companies that engage in unethical
    behaviors continue to be funded by major national brands, they are
    likely to continue those behaviors.

    The FTC is now poised to take a huge step toward addressing that
    problem. At the commission's recent "Tech-ade" hearings, commissioner
    Jon Leibowitz announced that the FTC would be contacting advertisers
    who had worked with Zango to inform them of the terms of the
    settlement. As these advertisers begin to understand some of the
    practices undertaken in order to market their brands, hopefully it
    will prompt them to take a closer look at their relationships with
    adware companies and their affiliates.


    Detailed information about online civil liberties issues may be found
    at This document may be redistributed freely in
    full or linked to

    Excerpts may be re-posted with prior permission of
    Policy Post 12.21 Copyright 2006 Center for Democracy and Technology
    Reprinted with full permission
    Continued Success,

    The secret of success is constancy of purpose ~ Disraeli

  2. #2
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    January 18th, 2005
    Winter Park, FL
    I made another $100 CDT donation just now to say thanks for granting Haiko / ABW permission to post your information here.

    Thank you CDT for chasing down schmucks, inciting / pressuring the FTC in productive ways, being receptive to input I've submitted (thanks MC), putting my donations to excellent use, educating our legislators and protecting and championing the consumer.

    Go ARI, get them all!

  3. #3
    ABW Ambassador
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    January 18th, 2005
    Christmas comes early. Wow.

  4. #4
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    January 18th, 2005
    St Clair Shores MI.
    Nice to see our Federal Tax dollars actually working to protect Americans when push comes to shove. Hats off the the folks at CDT for their unrelenting research and pressure to muzzle the BHO Adwhores. Infestation isn't a legit strategy game, when played against the trusting mental midgets supposedly in control of their computers. Hopefully the FTC will publically OUT the merchants monitizing Badware of all flavors.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  5. #5
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    January 18th, 2005
    Awesome thanks for posting this Haiko!


    Affiliate Marketing by AMWSO. Skype - chrissanderson ::: TEL 1-720-336-1784 :::
    Join our affiliate programs :Vaper Empire, Iolo, Art of Tea, or See ALL our Programs here

  6. #6
    ABW Ambassador erninator's Avatar
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    January 18th, 2005
    Excellent news. Great news to start the day off right.

  7. #7
    15 years and counting
    Join Date
    January 18th, 2005
    If you read Zango Corporate Best Practices, everything is fine. Who is lying?

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