As you may have heard, the FTC recently reached a significant settlement with an adware firm by the name of Zango. So, what are the lessons learned from the settlement?

The FTC and Zango Settlement Regarding Adware

According to FTC filings, Zango was a rather prolific adware firm. From 2002 to 2005, Zango distributed its adware product to the huge number of Internet users without their knowledge according to the FTC. The product was placed on the computers of individuals when they went to download free games, screensavers and such. On top of this, the FTC alleged that Zango and its affiliates placed the programs on computers in such a way that it was difficult to both find and remove them.

The basis of the claim against Zango, which used to be known as 180solutions, was that it failed to give proper notice to consumers that they were downloading adware onto their computers when they selected a free download. In turn, Zango took the position that they had done nothing wrong. Instead, it was those nasty affiliates that were doing all of the frivolous action. Surprise, surprise.

Based on the settlement which amounted to $3 million, it would appear that the FTC claims had more than a bit of merit. That being said, what legal lessons can we draw from the situation? Will adware now go away?

Many privacy advocates have hailed the settlement as a landmark case in the war against adware on the Internet. But is it really? While it's certainly sets a precedent regarding the fact that the FTC is looking at various adware firms, it hardly strikes me as something that is going to make such companies tremble in their boots. Why? It is a fairly well-known fact that the FTC is seriously under budgeted an undermanned. When it comes to controlling the Internet, most FTC cases are designed to be high profile so they can set examples that the agency hopes will deter others from taking such action.

At this point, I have serious doubts that the FTC will make much headway against adware firms with this settlement. Yes, adware firms are probably concerned at the moment about the potential for being the next party targeted by the FTC, but how long will that concern really last? Probably about as long as it takes to get the next set of revenues from their programs!

That being said, the FTC should be applauded for taking action against one of the more obvious adware situations. Still, while a $3 million fine may sound like a lot, one has to wonder how much money Zango made from 2002 and 2005. I'm willing to bet it was a bit more than $3 million.

Gerard Simington is with FindAnAttorneyForMe.com - an online internet law information and attorney directory.