The open question still remains whether the agreement between the FTC and Zango, formerly known as 180solutions, will reduce adware.
The Federal Trade Commission said Zango, a major adware distributor formerly known as 180solutions, and its two principals, Keith Smith and Daniel Toddhad of Bellevue, Wash., agreed to settle FTC allegations that the company used unjust and misleading methods to install and hinder the removal of adware on consumers' computers in violation of federal law.
But spyware researcher Ben Edelman questions that the company has transformed its ways. "I commend the FTC's efforts here, but serious diligence will be required to assure that [the company] actually complies with its many obligations under the settlement," Edelman said in an e-mail on Friday. "At this instant, I am confident that [the company] is not in compliance."
The $3 million resolution forbids Zango from downloading adware without consumers' consent. The accord includes a ban on using security holes to install adware, a practice followed by some of the company's third-party affiliates. The deal won't make adware vanish, but the terms of the agreement require Zango to obtain the informed consent of users before installing any adware.
"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 declaration. "If consumers decide to receive pop-up ads, so be it. But it violates federal law to clandestinely install software that forces customers to get pop-ups that disrupt their computer use."
Zango has a long history of contentious actions. In 2004, Edelman published a report stating that 180solutions' software inappropriately manipulated online affiliate payment programs to collect referral commissions for itself and its partners that weren't due.
"[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.
Hard work to alleviate spyware and adware appear to be having some result. In 2005, the proportion of home PCs with spyware or adware programs declined from 80% to 61%, according to an AOL/National Cyber Security Alliance Online Safety Study released in December. But the study also found that 81% of home computers lack at least one of the three necessary protections: up-to-date computer virus software, spyware protection, and a secure firewall.
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