FTC to Pressure Adware Advertisers

  |  November 7, 2006   |  Comments

Following the settlement of the Zango case, the FTC announced today it would contact advertisers whose ads have been distributed through Zango.

The FTC is shifting its attentions from adware firms to the advertisers who support them. In the wake of Friday's settlement of the Federal Trade Commission's case against adware firm Zango, the FTC plans on sending missives to advertisers to alert them their ads have been distributed through Zango's adware. While speaking this morning at the FTC's public hearings on "Protecting Consumers in The Next Tech-ade," Commissioner Jon Liebowitz suggested the FTC will move beyond penalizing firms like Zango, towards pressuring the advertisers enabling what he referred to as "nuisance adware."

"There will be value in alerting advertisers.....They will take a look at this letter and be surprised," Liebowitz told ClickZ News. "You really need to move to the demand side if you want to stop the scourge of spyware, or [more appropriately] nuisance adware."

At this point, he said, the commission has not determined which advertisers it will notify, nor what criteria to base such a decision on. The agency may not reveal the names of the advertisers to the public, added Liebowitz. The letters, he said, will indicate to advertisers "how not to advertise in the future."

The FTC last week announced a settlement of its case against Zango, previously 180solutions, charging the firm violated federal law by employing unfair and deceptive methods to distribute its adware. According to the settlement, Zango is fined $3 million, and is prohibited from downloading adware onto consumers' computers without their consent. The settlement also requires the company provide a means for removal of its adware.

The FTC alleged Zango purposely made identification and removal of its adware difficult. It also claimed third-party distributors of Zango's adware often did not reveal the free software they provided to users would require they download adware that served pop-ups or tracked their Web usage. To ensure compliance with the FTC order, the settlement demands Zango monitor its third-party distributors.

"From our perspective it's a really important case," said Liebowitz.

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Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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