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Zango\180Solutions Agree To 3Ml Fine With FTC


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#1 TeMerc

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Posted 03 November 2006 - 05:09 PM

Zango agrees to stop distributing thier software under agreement with FTC.

In the Matter of Zango, Inc. f/k/a 180Solutions, Inc., a corporation, Keith Smith, individually and as an officer of the corporation, and Daniel Todd, individually and as an officer of the corporation.
FTC File No. 052 3130
November 3, 2006
  • Agreement Containing Consent Orders
  • Analysis of Agreement Containing Consent Orders to Aid
  • Public Comment
  • Complaint
  • News Release
From Zango Blog:

BELLEVUE, Wash. – Nov. 3, 2006 – In announcing a settlement agreement with Zango, the Federal Trade Commission (FTC) today established standards for the online downloadable software industry and, most importantly, provided online consumers with a new and higher level of protection. Zango has met or exceeded the key notice and consent standards detailed in the FTC consent order since at least January 1, 2006.

Zango is an online media company that fulfills consumers’ growing demand for free, sought-after digital content, such as videos and games. The FTC, which initiated its investigation of Zango in September 2005, alleged that, in some circumstances in the past, the company’s desktop advertising software was inadequately disclosed to users and its installation and uninstall practices were unfair.

“Early in our business, and as we’ve acknowledged, we relied too heavily on our affiliates to enforce our consumer notice and consent policies. Unfortunately, this allowed deceptive third parties to exploit our system to the detriment of consumers, our advertisers and our publishing partners. We deeply regret and apologize for the resulting negative impact,” said Keith Smith, CEO of Zango. “The FTC’s leadership in providing clarity around best practices is a welcome and significant step forward for Zango and our industry. We embrace the new standards and will continue to create, abide by and strive for best practices that protect consumers.”

The “Agreement Containing Consent Order” is a settlement of the FTC’s investigation and explicitly “does not constitute an admission [by Zango] that the law has been violated.” Zango will pay a $3 million fine as part of the settlement.

Zango Corporate Blog
Note: Those with host files or restricted sites protection will need to remove or disable any such blocking to view the Zango Blog

=================================================================

Update from ReveNews:

Spyware researcher Ben Edelman says he has proof that Zango hasn't really cleaned up its act and that he'll post his proof in the coming weeks.

"180 continues plenty of bad practices, including some unlabeled ads, materially misleading installations that fail to disclose key aspects of 180's effects, and installation attempts predicated on security exploits.

I commend the FTC's efforts here, but serious diligence will be required to assure that 180 actually complies with its many obligations under the settlement. At this instant, I am confident that 180 is not in compliance."

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#2 TeMerc

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Posted 03 November 2006 - 05:11 PM

Conference Call Replay
Earlier today, Zango hosted a conference call to discuss this morning’s announced FTC settlement. Zango CEO Keith Smith, Zango Executive Vice President, General Counsel and Chief Compliance Officer Ken McGraw, and Hogan & Hartson Partner and former FTC Commissioner Christine A. Varney participated.

To hear a replay of the call, please dial toll-free (800) 642-1687. The conference call replay ID is: 1552048. The replay will be available through Friday, November 17, 2006.

#3 TeMerc

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Posted 04 November 2006 - 01:19 PM

From Sandi Hardmeier, come this brief write up about some of the particulars of the deal.

As always, nice work Sandi!

This is great news, as is the specifics of the orders which are wide reaching and will remain in effect for 20 years from the date of the order or the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later.

$1 million is payable within 10 days, another $1 million within 6 months, and the final $1 million within 12 months. If they don't pay, they get charged interest. The fine shall be used to provide "relief as [the FTC] determines to be reasonably related to Respondents’ practices alleged in the complaint, and to pay any attendant costs of administration."


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#4 TeMerc

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Posted 06 November 2006 - 05:41 PM

U.S. official urges stiffer anti-spyware penalties
By Peter Kaplan

WASHINGTON (Reuters) - A member of the U.S. Federal Trade Commission on Monday urged Congress to give the agency more power to penalize purveyors of hidden spyware.

FTC commissioner Jon Leibowitz said the agency should be given expanded authority to impose civil fines on distributors of the software, which often tracks computer users or triggers pop-up ads. It would be similar to the authority the FTC was given in 2003 to penalize computer spammers.

"The civil penalty authority Congress granted us in the (anti-spam law) gave our anti-spam efforts real teeth. Sadly, in spyware cases, we don't yet have that authority," Leibowitz said in prepared remarks given at a conference on the Internet.

Leibowitz, one of five FTC commissioners, gave the speech only days after the FTC announced a settlement with Zango Inc., major online advertising company whose software was secretly loaded onto millions of personal computers, according to the agency.

Zango, formerly named 180solutions Inc., did not admit any legal violations in the settlement announced on Friday. But it apologized and said it had relied too heavily on "deceptive" third-party affiliates.

Under current U.S. law, the FTC can go to court and ask that a company be forced to give up profits it made through unfair or deceptive practices. The agency used that authority to get Zango to repay $3 million as part of the settlement announced on Friday.

Posted Image Reuters

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