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Last Updated: Tuesday, 7 November 2006, 08:41 GMT
Company fined $3m for adware use
Keyboard and mouse
Zango has agreed to pay the US government $3m
An online advertising company is to pay $3m (2m) for "unfairly and deceptively" downloading its software onto people's computers.

In a settlement with the Federal Trade Commission, the firm also agreed to now seek consent before installing software and to make removing it easier.

US-based Zango, the FTC said, installed adware more than 70 million times, causing 6.9 billion pop-up ads.

Zango's CEO said he "deeply regretted" any negative impact.

Consumers' computers belong to them, and they shouldn't have to accept any content they don't want.
Lydia Parnes, FTC

Zango, previously called 180 Solutions, is based in Washington and was described by the FTC as one of the world's largest distributors of adware - programs that, once installed, can bombard people's computers with adverts.

The FTC alleged the company used third parties to install its adware onto consumer's computers, hiding the programs in games, screensavers or browser updates being offered for free.

Once installed, the programs monitored internet use and offered pop-up ads based on the sites that had previously been visited.

The FTC claimed Zango deliberately made it difficult to identify, locate and remove the adware once it was installed.

The result, the FTC added, was that millions of consumers were receiving adverts without knowing why, and were being watched without their knowledge or consent without a means of stopping it.

Ill-gotten gains

Lydia Parnes, director of the FTC's Bureau of Consumer Protection, said: "Consumers' computers belong to them, and they shouldn't have to accept any content they don't want.

"If consumers choose to receive pop-up ads, so be it. But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use."

The company will now have to pay the US government the $3m fine, for what the FTC describes as "ill-gotten gains", and it is barred from installing adware without computer users' knowledge and prior consent.

In a statement, Zango said third-party affiliates were to blame for the problems and stated it had been working in accordance with the FTC's standards since January 2006.

Keith Smith, CEO of Zango, said: "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.

"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."

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