Zango Ignoring FTC Requirements

    August 1, 2007
    WebProNews Staff

Sneaky pop-up ad company Zango settled with the Federal Trade Commission last November, paying $3 million in penalties and agreeing to stop duping users into downloading adware. But it appears the company is still up to its old tricks.

The reason the government began imposing jail time on insider traders and books-cookers in the financial sector is because companies were taking calculated risks by adjusting their business plans to allow for government fines. What’s a few million dollars to make billions?

Ben Edelman, a professor at Harvard Business School and certainly no fan of Zango (formerly 180solutions), has gathered evidence suggesting Zango is willingly and openly violating the terms of the FTC settlement.

On his blog, he presents his case:

Among these practices are widespread, ongoing Zango-designed installation sequences which install Zango pop-up ad software without any on-screen disclosure of material terms. Instead, these installations mention Zango’s effects only in a lengthy EULA – exactly contrary to the FTC settlement’s requirements.

Zango’s ongoing practices also include widespread in-toolbar ads without the labeling and hyperlinks specifically required under the FTC settlement. Other Zango ads, including desktop icons and even certain pop-ups, also lack these labels and links.

Perhaps the company filed the FTC fine under "Business Expenses."

Edelman presents a thorough (read: lengthy) investigation, complete with screenshots. In a summary, Edelman cites ActiveX installations, banner-based installations, both without proper disclosure, unlabeled ads, toolbars, desktop icons and pop-ups, and ads for bogus sites with the intent to defraud users.