Zango has settled an investigation with the Federal Trade Commission over the illegal and semi-illegal installations of its software.

Zango will pay $3m, which is probably pocket change to the company considering the fact that more than 20m people worldwide run the software on their computers.

But more than giving Zango a proper legal spanking (even though the company didn't admit to any wrongdoings), the settlement defines some new rules that provides a stick to poke future offenders.

04 Nov 2006

Adware makers from now on are required to explicitly ask the user permission to install the software - burying that section in the end user license agreement won't do anymore.

Also, adware makers from now on will be held accountable for the mischief of their distributors. Zango in the past for instance was often installed on virus infected systems by botnet operators, making the distributor a cool (estimated) 50 cents per installation.

While Zango clearly profited from those illegal installations, the company always maintained that its couldn't be blamed for these unauthorized installations.

Is Zango the worst offender in the download software sector? While the company certainly has built up bad a reputation, it appears that it has cleaned up its act. But there are plenty of offenders left that need straightening out.

technorati tags: zango, adware, ftc, legal, cdt