• by Wendy Davis  @wendyndavis, November 21, 2006

Some consumer advocates are raising questions about whether adware company Zango will comply with an agreement to settle FTC charges that the company unfairly installed adware on consumers' hard drives.

In written comments to the FTC, the nonprofit group Center for Democracy & Technology alleged Monday that Zango isn't following the terms of the agreement, which was announced earlier this month. While the settlement won't take effect until next month, company executives said when they announced the deal that Zango already was in compliance, and had been since at least January.

Among other terms, the deal calls for Zango to label any ads served by its software and provide a link to a Web page with instructions for uninstalling the adware.

But the CDT Monday said it had found recent examples of Zango ads that lacked that information. One ad displayed Nov. 10--one week after the settlement agreement was made public--didn't identify Zango as the source of the ad or link to a page with information about how to uninstall the adware, according to the CDT.

"Although we are pleased with the terms of the settlement, we are concerned that Zango, even in its press reaction to the settlement, made deceptive statements about its recent behavior," the CDT said in its comments.

The group is requesting that the FTC closely monitor Zango, and that Zango withdraw its prior statement that it already was in compliance with the agreement. "We urge the FTC to require Zango to rescind its November 3 press release and issue a retraction statement," wrote the CDT. "This is the best way to bring Zango's rhetoric in line with its actions and to alert Zango to the fact that deception will not be tolerated."

In addition to agreeing to pay $3 million, Zango said it would stop serving ads to any users who had installed the software prior to January 2006. The company also agreed that it would clearly disclose, in advance, that users who installed its software would receive pop-up ads.

Anti-spyware researchers Ben Edelman and Eric Howes also issued a report Monday alleging that Zango wasn't yet complying with the proposed settlement.

A Zango spokesman said in a statement e-mailed to OnlineMediaDaily that the company was reviewing the information. "We take concerns relating to the FTC consent order announced earlier this month very seriously and welcome any and all input about our business practices and the protection of consumers," the company stated.