Researcher: Adware firm continues bad behavior

Zango is being accused by spyware researcher Ben Edelman of engaging in practices likely to "confuse, deceive, or otherwise harm" typical Web surfers.

In a report posted to Edelman's Web site Zango, which manufactures adware typically downloaded in exchange for access to games, videos, and software, is also accused of contradicting the company's obligations under its November 2006 settlement with the U.S FTC.

Zango's Ken McGraw, the company's executive vice president and chief compliance officer, calls Edelman's claims, "unfounded, inaccurate and misleading." McGraw adds, Zango is in full compliance with the FTC consent agreement. The company has posted a response to Edelman's claims here.

Edelman claims Zango engages in:

* Widespread Zango "ActiveX" installations without unavoidable, prominent disclosure of material terms.

* Widespread Zango banner-based installations without unavoidable, prominent disclosure of material terms.

* Ongoing Zango Installations with no disclosure whatsoever.

* Displays unlabeled Zango ads.

* Zango displays ads for sites that attempt to defraud users.

"These practices call into question the integrity of Zango's business," Edelman reports.

McGraw says Edelman is wrong on all counts. He scrutinized one of Edelman's claims that Zango installs itself with no disclosure whatsoever. McGraw says Edelman is referring to installations of the company's "old" software called n-Case. McGraw says that Edelman's claims that the software installs on users' PCs without disclosure is unfounded.

McGraw says the n-Case product has been long discontinued and that recent instances where n-Case may have been installed on PCs are beyond Zango's control. "The n-Case software is dead," McGraw says. He explains n-Case software has been orphaned on many sites beyond Zango's control. He adds n-Case is not a "live" program and does not communicate back to Zango servers or display ads.

Edelman acknowledges n-Case at present doesn't communicate with Zango. However he points out that installed n-Case software continues to attempt to communicate back to Zango servers.

Independent privacy consultants at Corporate Privacy Group certified Zango in April as being in compliance with the 2006 settlement with the FTC, according to Richard Purcell, the firm's chief executive officer and former chief privacy officer for Microsoft. Zango is a paying client of CPG.

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