The $3 million represents what the US consumer regulator said
were the "ill-gotten gains" of the installation of adware. Zango,
formerly known as 180Solutions, says that it has now changed the
way that it works.
The software served pop-up adverts based on the kinds of sites
that the user of that computer visited, and is said to have caused
6.9 billion ads to appear, unwanted, on users' computer screens.
The software was secretly included along with free internet
downloads, such as games or screensavers.
"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. "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 FTC settlement orders Zango not to communicate with
consumers' computers without explicit permission from them. The
company must "give clear and prominent disclosures and obtain
consumers’ express consent before downloading software onto
consumers’ computers," said an FTC statement.
The settlement also bars the company from serving adverts to any
computer on which the software was installed prior to 1st January
2006. After this date the company changed the way it worked, it
said.
"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 Centre for Democracy &
Technology (CDT), a Washington based lobby group. "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."
The settlement makes clear that the obtaining of consent must be
separate to the end user licence agreement (EULA). "Distributors of
unwanted software often hide their disclosures in EULAs in hopes
that users will simply click through them without reading," said a
statement from the CDT.
The $3 million fine stands in sharp contrast to the likely
situation in the UK should a similar case emerge. "By mentioning
adware in a EULA, suppliers are likely to escape criminal penalties
under the UK's Computer Misuse Act because it will be difficult to
show beyond any reasonable doubt that the installation was
unauthorised," said Struan Robertson, a technology lawyer at
Pinsent Masons and editor of OUT-LAW.COM. "It may breach the
Privacy and Electronic Communications Regulations, though, given
that few people will read the EULA."
Robertson continued: "The problem here in the UK is that a
breach of these Regulations is little deterrent: all that is likely
is that the Information Commissioner will tell the adware supplier
not to misbehave in future – and if it does, its
worst-case-scenario is a pathetic £5,000 fine."
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