For immediate release:
November 3, 2006
Contact:
David McGuire
(202) 637-9800 x106
WASHINGTON -- The Center for Democracy & Technology (CDT) strongly applauded today's announcement by the Federal Trade Commission (FTC) that it had reached a settlement with Bellevue, Wash.-based adware distributor Zango Inc.
In January, CDT filed a lengthy complaint with the FTC against Zango, which was formerly known as 180solutions. In the complaint, CDT identifies a string of unfair and deceptive practices Zango employed in distributing its adware to millions of people over a period of two years. The full complaint is available at http://www.cdt.org/privacy/20060123180complaint.pdf and the press release is at http://www.cdt.org/press/20060123180release.pdf .
"This is a landmark settlement, and one that sends an important message to companies that have built their businesses on the backs of Internet users without any concern for what those users want," said Ari Schwartz Deputy Director of the Center for Democracy & Technology and author of the original Zango complaint. "With this action, the FTC has again made clear that it is prepared to go after companies, regardless of size or market position, that engage in unfair and deceptive practices to distribute their products.
More important than the $3 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 practices.
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 affiliates on its behalf. 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.
"Everyone involved in the downloadable software industry should read this settlement very closely," Schwartz said. "If followed, the precedents established here have the potential to vastly improve the Internet experience for millions of users.