Adware company hit with $3m fine

Adware company Zango has been fined $3m by the US Federal Trade Commission (FTC) for the methods it has employed to download adware onto users' computers.

The adware distributor agreed to settle with the FTC after the watchdog claimed Zango "used unfair and deceptive methods to download adware and obstruct consumers from removing it".

The settlement bars future downloads of Zango's adware without consumers' consent; requires Zango to provide consumers with a way to remove the adware; and requires the adware distributor to give up $3m of what the FTC calls "ill-gotten gains".

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In order to download games or view video clips on Zango.com users must install a file called 'setup.exe' from Zango. But what many may not realise, in their haste to watch the clip, is that by doing so they are downloading adware onto their machines - which not only conveys information about their web sessions back to Zango but will also serve pop-up ads that could contain adult content.

In August, a spokesman from Zango.com told silicon.com users know exactly what they are giving their consent to and said the company's end-user licensing agreement is "comprehensive" and "plain language".

Now the same spokesman said much of the blame for the FTC's findings rests with "third parties" and "affiliates".

The Zango spokesman told silicon.com: "We relied too heavily upon our affiliates early on to enforce our consumer notice and consent policies. Unfortunately, this allowed a few deceptive third parties to exploit our system to the detriment of consumers."

These third parties were also to blame for exploiting web browser security vulnerabilities to effect attacks known as 'drive-by' downloads, he added.

In related news, a web security company has today warned of a number of user pages on MySpace which contain videos appearing to be from YouTube that include an installer embedded within them for the Zango cash toolbar. When a user clicks on the video, they are directed to a copy of the video, hosted on a site called "Yootube.info" and the video attempts to install 'setup.exe' from Zango Cash.