The adware maker will have to stop serving advertisements on systems that installed the software before 1 January 2006.
A Zango spokesman declined to say how many of its 20 million installations are affected by the ruling, but claimed it was a "minimal number". Zango also agreed to give up $3m in ill-gotten gains.
"Consumers' computers belong to them, and they should not have to accept any content they do not want," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection.
"If consumers choose to receive pop-up ads, so be it. But it violates Federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use."
Zango was known as 180solutions until last September. The company's adware is bundled with free content such as games, screen savers and peer-to-peer file sharing software.
Users installing the free software also receive an application that monitors their network connection and serves pop-up ads.
The FTC charged that Zango deliberately made it difficult to identify, locate and remove the software.
Zango relies on third-party distributors to push its adware, paying them an estimated 50 cents for each successful installation.
Critics charge that paying distributors for each installation creates an incentive for non-consensual installations.
Botnet operators, for instance, can install the software on computers under their control to collect the affiliate fee.
Zango claims that it is cracking down on these practices. The software periodically informs users of its presence and provides instructions on how to remove it.
Last year the company filed lawsuits against seven of its distributors, all of which were located outside the US, but later dropped the charges.
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