IAC Toolbars and Traffic Arbitrage in 2013

Beginning in 2005, I flagged serious problems with IAC/Ask.com toolbars — including installations through security exploits and through bundles that nowhere sought user consent, installations targeting kids, rearranging users’ browsers to invite unintended searches, and showing a veritable onslaught of ads. IAC’s practices have changed in various respects, but the core remains as I previously described it: IAC’s search advertising business exists not to solve a genuine user need or provide users with genuine assistance, but to prey on users who — through inattention, inexperience, youth, or naivete — stumble into IAC’s properties.

Crucially, IAC remains substantially dependent on Google for monetization of IAC’s search services. A rigorous application of Google’s existing rules would put a stop to many of IAC’s practices, and sensible updated rules — following the stated objective of Google’s existing policies — would end much of the rest.

In this piece I examine current IAC toolbar installation practices (including targeting kids and soliciting installations when users are attempting to install security updates), the effects of IAC toolbars once installed (including excessive advertising and incomplete uninstall), and IAC’s search arbitrage business. I conclude by flagging advertisements with impermissibly large clickable areas (for both toolbars and search arbitrage), and I call on Google to put an end to Ask’s practices.

IAC Toolbar Installation

IAC’s search toolbar business is grounded in placing IAC toolbars on as many computers as possible. To that end, IAC offers 50+ different toolbars with a variety of branding — Webfetti (“free Facebook graphics”), Guffins (“virtual pet games”), religious toolbars of multiple forms (Know the Bible, Daily Bible Guide, Daily Jewish Guide), screensavers, games, and more. One might reasonably ask: Why would a user want such a toolbar?

IAC ad promises 'free online television' but actually merely links to material already on the web; promises an 'app' but actually provides a search toolbar. IAC ad promises “free online television” but actually merely links to material already on the web; promises an “app” but actually provides a search toolbar.

IAC ad solicits installations via 'virtual pet' ad distinctively catering to kids.IAC ad solicits installations via “virtual pet” ad distinctively catering to kids.

Other IAC Guffins ads specifically invite 'kids' to install. (Screenshot by iSpionage) Other IAC Guffins ads specifically invite “kids” to install. (Screenshot by iSpionage)

IAC Guffins offer features multiple animated cartoon images, distinctively catering to kids.

The Television Fanatic toolbar is instructive. IAC promotes this toolbar with search ads that promise “free online television” and “turn your computer into a TV watch full TV episode w free app.” It sounds like an attractive deal — many users would relish the ability to watch free live broadcast television on an ordinary computer, and it would not be surprising if such a service required downloading some sort of desktop application or browser plug-in. But in fact Television Fanatic offers nothing of the sort. To the extent that Television Fanatic offers the “free online television” promised in the ad, it only links to ordinary video content already provided by others. (For example, I clicked the toolbar’s “ABC” link and was taken to http://abc.go.com/watch/ — an ordinary ABC link equally available to users without Television Fanatic. That’s a far cry from IAC’s promise of special access to premium material.

Meanwhile, IAC’s Guffins toolbar distinctively targets kids. IAC promotes Guffins via search ads for terms like “virtual pet”, and the resulting ad says Guffins offers “puppy, cats, bunny, dragons & more” which a user can “feed, play, [and] care for.” The landing page features four animated animals with oversized faces and overstated features, distinctively attractive to children. Under COPPA factors or any intuitive analysis, IAC clearly targets kids. Indeed, ad tracking service iSpionage reports Guffins ads touting “Free Kids Games Download”, “Free Kids Computer Games”, “Play Kids Games Online”, and more — explicitly inviting children to install Guffins. Of course kids are ill-equipped to evaluate IAC’s offer — less likely to notice IAC’s disclosures of an included toolbar, less likely to understand what a search toolbar even is, and less able to evaluate the wisdom of installing such a toolbar in exchange for games.

While IAC’s ads often promise an “app” (including as shown in the ad screenshots at right), IAC actually offers just toolbars — add-ins appearing within web browsers, not the freestanding applications that the ads suggest. That’s all the more deceptive: IAC enticed users with the promise of genuine distinct programs offering exceptional video content and rich gaming. Instead IAC provided browser plug-ins that claim valuable screen space whenever users browse the web. And far from providing exclusive content, IAC toolbars send users to material already on the web and driving traffic to IAC’s advertising displays (as detailed in the next section). That’s strikingly inferior.

IAC’s toolbar installation practices stack up unfavorably vis-a-vis applicable Google policies, industry standards, and regulatory requirements. Google’s Software Principles call for “Upfront disclosure” with no suggestion that an app may promise one thing in an initial solicitation, then something else in a subsequent landing page. (IAC is obliged to comply with Google’s rules because IAC toolbars show ads from Google, as discussed in the next section.) Meanwhile, the Anti-Spyware Coalition specifically flags installations targeting children, allowing bundling by affiliates, and modifying browser settings as risk factors making software a greater concern. Even decades-old FTC rules are on point, disallowing “deceptive door openers” that promise one thing at the outset (like IAC’s initial promise of “free online television”) but later deliver something importantly different (a search toolbar).

Web searches reveal numerous user complaints about IAC toolbars. Consider search results for “televisionfanatic”. A first result links to product’s official site. Second is a Sitejabber forum with 20 harsh reviews. (17 reviewers gave Television Fanatic just one star out of five, with comments systematically reporting surprise and annoyance at the toolbar’s presence.) The third result advises “How to uninstall a Television fanatic toolbar”, and the fourth is multiple Yahoo Answers discussions including a user asking “Is television fanatic toolbar a virus?” and others repeatedly complaining about unintended installation. Clearly numerous users are dissatisfied with Television Fanatic.

So too for DailyBibleGuide. In a Q1 2011 earnings call, IAC CEO Greg Blatt touted the DailyBibleGuide toolbar as a new product IAC is particularly proud of. But a Google search results for “DailyBibleGuide” include a page advising “do not download Dailybiblestudy, Dailybibleguide, or Knowthebible extension.” There and elsewhere, users seem surprised to receive IAC’s toolbars. Reading users’ complaints, it seems their confusion ultimately results from IAC’s decision to deliver bible trivia via a toolbar. After all, such material would more naturally be delivered via a web page, email newsletter, or perhaps RSS feed. IAC chose the odd strategy of toolbar-based delivery not because it was genuinely what users wanted, but because this is the format IAC can best monetize. No wonder users systematically end up disappointed.

By all indications, a huge number of users are running IAC toolbars. The IAC toolbars discussed in this section all send users to mywebsearch.com, a site users are unlikely to visit except if sent there by an IAC toolbar. Alexa reports that mywebsearch.com is the #41 most popular site in the US and #71 worldwide — more popular than Instagram, Flickr, Pandora, and Hulu.

Some of IAC’s browser configuration changes remain in place even if a user removes an IAC toolbar. I installed then uninstalled an IAC Television Fanatic toolbar and received a prompt instructing “Click here for help on resetting your home page and default search settings.” The resulting page specified four different procedures totaling 16 steps — far more lengthy than the initial installation. I can see no proper reason why uninstall is so difficult. Indeed, IAC’s incomplete uninstall specifically violates Google’s October 2012 requirement that “During the uninstall process, users must be presented with a choice that gives them the option of returning their browser’s user settings to the previous settings.” Google’s Software Principles are also on point, instructing that uninstall must be “easy” and must disable “all functions of the application” — whereas IAC’s automated installer does not undo all of IAC’s changes, and IAC’s manual 16-step process is the opposite of “easy.”

The Special Problems of IAC Ask Toolbar Installed by Oracle’s Java Updates

Oracle Java security updates install Ask Toolbar by default, with just a single click in a multi-step installer. Java security update installs Ask Toolbar by default — a single click in a multi-step installer.

Ongoing Oracle Java updates also install the IAC Ask Toolbar. I discuss these installations in this separate section because they raise concerns somewhat different from the IAC toolbars discussed above. I see five key problems with Oracle Java updates that install IAC toolbars:

First, as Ed Bott noted last week, the “Install the Ask Toolbar” checkbox is prechecked, so users can install the Ask toolbar with a single click on the “Next” button. Accidental installations are particularly likely because the Ask installation prompt is step three of five-screen installation process. When installing myriad software updates, it’s easy to get into a routine of repeatedly clicking Next to finish the process as quickly as possible. But in this case, just clicking Next yields the installation of Ask’s toolbar.

Second, although the Ask installation prompt does not show a “focus” (a highlighted button designated as the default if a user presses enter), the Next button actually has focus. In testing, I found that pressing the enter or spacebar keys has the same effect as clicking “Next.” Thus, a single press of either of the two largest keys on the keyboard, with nothing more, is interpreted as consent to install Ask. That’s much too low a bar — far from the affirmative indication of consent that Google rules and FTC caselaw call for.

Third, in a piece posted today, Ed Bott finds Oracle and IAC intentionally delaying the installation of the Ask Toolbar by fully ten minutes. This delay undermines accountability, especially for sophisticated users. Consider a user who mistakenly clicks Next (or presses enter or spacebar) to install Ask Toolbar, but immediately realizes the mistake and seeks to clean his computer. The natural strategy is to visit Control Panel – Programs and Features to activate the Ask uninstaller. But a user who immediately checks that location will find no listing for the Ask Toolbar: The uninstaller does not appear until the Ask install finishes after the intentional ten minute delay. Of course even sophisticated users have no reason or ability to know about this delay. Instead, a sophisticated user would conclude that he somehow did not install Ask Toolbar after all — and only later will the user notice and, perhaps, proceed with uninstall. Half a decade ago I found WhenU adware engaged in similar intentional delay. Similarly, NYAG litigation documents revealed notorious spyware vendor Direct Revenue intentionally declining to show ads in the first day after its installation. (Direct Revenue staff said this delay would “reduce the correlation between the Morpheus download [which bundled Direct Revenue spyware] and why they are seeing [Direct Revenue’s popup] ads” — confusion that DR staff hoped would “creat[e] less of a path to what they [users] should uninstall.”) Against this backdrop, it’s particularly surprising to see IAC and Oracle adopt this tactic.

Fourth, IAC makes changes beyond the scope of user consent and fails to revert these changes during uninstall. The Oracle/IAC installation solicitation seeks permission to install an add-on for IE, Chrome, and Firefox, but nowhere mentions changing address bar search or the default Chrome search provider. Yet the installer in fact makes all these changes, without ever seeking or receiving user consent. Conversely, uninstall inexplicably fails to restore these settings. As noted above, these incomplete uninstalls violate Google’s Software Principles requirement that an “easy” uninstall must disable “all functions of the application.”

Finally, the Java update is only needed as a result of a serious security flaw in Java. It is troubling to see Oracle profit from this security flaw by using a security update as an opportunity to push users to install extra advertising software. Java’s many security problems make bundled installs all the worse: I’ve received a new Ask installation prompts with each of Java’s many security updates. (Ed Bott counts 11 over the last 18 months.) Even if the user had declined IAC’s offer on half a dozen prior requests, Oracle persists on asking — and a single slip-up, just one click or keystroke on the tenth request, will nonetheless deliver Ask’s toolbar.

A security update should never serve as an opportunity to push additional software. As Oracle knows all too well from its recent security problems, users urgently need software updates to fix serious vulnerabilities. By bundling advertising software with security updates, Oracle teaches users to distrust security updates, deterring users from installing updates from both Oracle and others. Meanwhile, by making the update process slower and more intrusive, Oracle reduces the likelihood that users will successfully patch their computers. Instead, Oracle should make the update process as quick and easy as possible — eliminating unnecessary steps and showing users that security updates are quick and trouble-free.

Toolbar Operations and Result Format

Once a user receives an IAC toolbar, a top-of-browser stripe appears in Internet Explorer and Firefox, and IAC also takes over default search, address bar search, and error handling. That’s an intrusive set of changes, and particularly undesirable in light of the poor quality of IAC’s search results.

If a user runs a search through an IAC toolbar or through a browser search function modified by IAC, the user receives Mywebsearch or Ask.com results page with advertisements and search results syndicated from Google. The volume of advertisements is remarkable: On a 800×600 monitor, the entire first two screens of Mywebsearch results presented advertisements (screen one, screen two) — four large ads with a total of seven additional miniature ads contained within. The first algorithmic search result appears on the third on-screen page, where users are far less likely to see it. At Ask.com, ads are even larger: fully seven advertisements appear above the first algorithmic result, and three more ads appear at page bottom — more than filling two 800×600 screens.

IAC obtains these advertisements and search results from Google, but IAC omits features Google proudly touts in other contexts. For example, Google claims that its maps, hotel reviews, and hotel price quotes benefit users and save users time — but inexplicably IAC Mywebsearch lacks these features, even though these features appear prominently and automatically for users who run the same search at Google. In short, a user viewing IAC results gets listings that are intentionally less useful — designed to serve IAC’s business interest in encouraging the user to click extra advertisements, with much less focus on providing the information that IAC and Google consider most useful.

The ad format at IAC Mywebsearch and Ask.com makes it particularly likely that users will mistake IAC ads for algorithmic results. For one, IAC omits any distinctive background color to help users distinguish ads from algorithmic results. Furthermore, IAC’s voluminous ads exceed beyond the first screen of results for many searches. A user familiar with Google would expect ads to have a distinctive background color and would know that ads typically rarely completely fill a screen — so seeing no such background color and similar-format results continuing for two full screens, the user might well conclude that these are algorithmic listings rather than paid advertisements.

Traffic Arbitrage

IAC buys traffic from Google and other search engines. The resulting sequence is needlessly convoluted: A user runs a search at Google, clicks an IAC ad purporting to offer what the user requested], then receives an IAC landing page with the very same ads just seen at Google. For example, I searched for [800 number look up] at Google and clicked an Ask ad. The resulting Ask page allocated most of its the above-the-fold space to three of the same ads I had just seen at Google! This process provides zero value to the user — indeed, negative value, in that the extra click adds time and confusion. But IAC monetizes its site unusually aggressively — for example, regularly putting four ads at the top of the page, where Google sometimes puts none and never presents more than three. Of course these extra ads serve IAC’s interest: By pushing a fraction of users to click multiple ads, IAC can more than cover its costs of buying the traffic from Google in the first place.

Longstanding Google rules exactly prohibit IAC’s search arbitrage. Google’s AdWords Policy Center instructs that “Google AdWords doesn’t allow the promotion of websites that are designed for the sole or primary purpose of showing ads.” Google continues: “One example of this kind of prohibited behavior is called arbitrage, where advertisers drive traffic to their websites at low cost and pay for that traffic by earning money from the ads placed on those websites”

Why isn’t Google enforcing its rules against arbitrage? An October 2012 Search Engine Land article quotes a reader who wrote to Google AdWords support, where a representative replied with unusual candor: “Since Ask.com is considered a Google product, they are able to serve ads at the top of the page when the search query is found to be relevant to their ads.” Of course Ask.com is not actually “a Google product” — it’s a Google syndicator, showing Google ads in exchange for a revenue share, just like thousands of other sites. But with IAC reportedly Google’s biggest advertising customer, special privileges would be less than surprising. Meanwhile, Google lets IAC do Google’s dirty work — showing extra ads to gullible users — which could let Google collect additional ad revenue from those users’ clicks. Still, that’s no help to users (who get pulled into extra page-views and less useful pages with more advertisements) or advertisers (whose costs increase as a result). And once the public recognizes Google’s role in authorizing this scheme, selling all advertising, and funding the entirety of IAC’s activity, Google ends up looking at least as culpable as IAC.

Ads with Oversized Clickable Areas

IAC ad promises 'free online television' but actually merely links to material already on the web; promises an 'app' but actually provides a search toolbar. Contrary to standard industry practice and Google rules, IAC makes the entire ad — including domain name, ad text, and large whitespace — into a clickable link. Notice the large clickable area flagged in the red box.

IAC ad promises 'free online television' but actually merely links to material already on the web; promises an 'app' but actually provides a search toolbar. At Google, only the ad itself is clickable. Not the much smaller red box.

IAC’s ads also flout industry practice and Google rules as to the size of an ad’s clickable area. Both in arbitrage landing pages and in toolbar results, IAC’s search result pages expand the clickable area of each advertisement to fill the entire page width, sharply increasing the fraction of the page where a click will be interpreted as a request to visit the advertiser’s page.

See the screenshot at right. (To create the red-outlined box showing the shape of the clickable area, I clicked an empty section of the ad and began a brief drag, causing my browser to highlight the ad’s clickable area in red as shown in the screenshot.)

Ask is an outlier in converting whitespace around an ad into a clickable area. Every other link on Ask.com landing pages — every link other than an advertisement — follows standard industry practice with only the words of the link being clickable, but not the surrounding whitespace. Indeed, at Google, Bing, and Yahoo, white space is never clickable. At Google and Bing, only ad titles are clickable, not ad domain names, or ad text. (See Google screenshot at right, showing the limited clickable area of a Google ad.) At Yahoo, only ad titles and domain names are clickable, not ad text or white space.

IAC has taken intentional action to expand its ads’ clickable area to cover all available width. As W3schools explains, “A block element is an element that takes up the full width available.” To expand ad hyperlinks to fill the entire width, Ask tags each ad hyperlink with the CSS STYLE of display:block.

<a id=”lindp” class=”ptbs pl20 pr30 ptsp pxl” style=”display:block;padding-bottom: 0px;” …

Google’s rules prohibit IAC’s expanded clickable areas. Google requires that “clicking on space surrounding an ad should not click the ad.” Yet IAC nonetheless makes a clickable area out of the area surrounding each ad, extending all the way to the right column.

IAC’s expanded ads invite accidental clicks. Accidental clicks are particularly likely from the inexperienced users IAC systematically targets for toolbar installations, and also from users searching on tablets, phones, and other touch devices. These extra clicks waste users’ time and drive up advertisers’ costs — but every such click yields extra revenue for IAC and Google.

What Comes Next

Google should enforce its rules strictly. No doubt IAC can offer Google some short-term revenue via extra ad-clicks from unsophisticated or confused users. But this isn’t the kind of business Google aspires to, and Google’s public statements indicate no interest in such bottom-feeding. Indeed, a fair application of Google’s existing AdWords rules would disallow both IAC’s toolbar ads (using AdWords to solicit installations) and IAC’s search arbitrage ads (using AdWords to send users to IAC pages presenting syndicated AdWords ads). Meanwhile, numerous Google AdSense rules are also on point, including prohibiting encouraging accidental clicks, prohibiting site layout that pushes content below the fold, and limiting the number of ads per page. So too for Software Principles requiring up-front disclosure as well as “easy” and complete uninstall.

As a publicly-traded company, IAC should benefit from the oversight and guidance of its outside directors. But the New York Times commented in 2011 that “IAC’s board is filled with high-powered friends of Mr. Diller,” calling into question the independence and effectiveness of IAC’s outside directors. Of particular note is Chelsea Clinton, who joined IAC’s board in September 2011. Ms. Clinton’s prior experience includes little obvious connection to Internet advertising or online business, suggesting that she might need to invest extra time to learn the details of IAC’s business. Yet she also has weighty commitments including ongoing doctoral studies, serving as an Assistant Vice Provost at NYU, and reporting as a special correspondent for the NBC Nightly News — calling into question the time she can devote to IAC matters. The Times questioned why IAC had brought in Ms. Clinton, concluding that “This is clearly an appointment made because of who she is, not what she has done.” Indeed, Ms. Clinton’s background means she will be held to a particularly high standard: if she fails to stop IAC’s bad practices, the public may reasonably ask whether she has done her duty as an outside director.

Recent research from Goldman analyst Heath Terry flags investor concerns at IAC’s tactics. In a December 4, 2012 report, Terry downgraded IAC to sell due to vulnerability from Google policy changes. A January 9, 2013 follow-up noted IAC changing its uninstall practices to comply with Google policy as well as slowdown in arbitrage. Terry flags some important factors, and I share his bottom line that IAC’s search practices are unsustainable. But the real shoe has yet to drop. If Google is embarrassed at IAC’s actions — and it should be — Google is easily able to put an end to this mess.

I prepared a portion of this article at the request of a client that prefers not to be listed by name. The client kindly agreed to let me include that research in this publicly-available posting.

Debunking Zango’s "Content Economy" updated May 29, 2008

Zango often touts its so-called “content economy” — purportedly providing users access to media in exchange for accepting Zango’s popup ads. After four years of debunking Zango’s claims, I’ve come to suspect the worst — and my investigations of Zango’s media offerings confirm that Zango’s media library is nothing to celebrate. This article reports the results of my recent examinations. I show:

  • Widespread copyrighted video content presented without any indication of license from the corresponding rights-holders. Details.
  • Widespread sexually-explicit material, including prominent explicit material nowhere labeled as such. Details.
  • An audio library consisting solely of prank phone calls to celebrities (without the “music” Zango promises). Details.
  • Widespread material users can get elsewhere for free, without any popups or other detriments. Details.
  • Widespread material that content creators never asked to have included in any Zango library. Details.

Widespread copyrighted video content presented without any indication of license from the corresponding rights-holders

Many of the videos in of Zango’s video library are the work of major movie studios, TV networks, and other third parties that own and assert copyright in their respective works. These videos consistently appear without any statement of authorization (e.g. “used with permission”) or even the ordinary copyright notice. I therefore conclude that Zango’s site features these videos without authorization from the corresponding rights-holders.

Zango Offers Daily Show with Guest Chris Rock Zango Offers Daily Show w/ Chris Rock

Zango Offers 'Borat' Zango Offers Borat

For many videos in Zango’s library, it is trivially easy to determine the video’s source. For example, text in the corner of Zango’s “Ashley Judd Nude Photoshoot” indicates the video comes from “Norma Jean & Marilyn” (1996, released on DVD by HBO Home Video). The title of Zango’s “Wild Things” suggests the video comes from the 2004 Sony Pictures movie by the same name; watching the video confirms the match. Zango’s “Girls Next Door Nude Compilation” begins with the distinctive Playboy logo. Zango’s “Chris Rock on the Daily Show” reproduces a video clip from Comedy Central’s Daily Show. It’s easy to find scores of other examples plainly labeled as well-known copyrighted works.

Other videos in Zango’s library are harder to identify — at least those without extensive entertainment industry experience. For example, I cannot easily determine the specific movie that included the scenes shown in Zango’s “Paris Hilton Striptease” or “Rachel Hunter in the Bathtub.” But the clips leave little doubt that they were filmed professionally and that the respective studios hold copyright in the resulting works. Similarly, I cannot easily determine the specific source of Zango’s “Branding Beat Down.” However, every frame of the video bears the distinctive Fox logo — indicating that the video originated with the Fox Broadcasting Company.

As to at least eight of the files in Zango’s library, I have specifically confirmed that Zango’s reproduction occurs without authorization from the underlying rights-holders. (Details below.) As to selected other files, I have sent inquiries to the corresponding rights-holders. I will update this page if I confirm whether Zango has properly licensed the content at issue.

Infringing videos are remarkably prominent in Zango’s video library. For example, as of May 27, Zango’s home page linked to “Borats First Trip To An American Gym” (s.i.c.). This clip was listed as the second most popular video in Zango’s entire content library, and it was placed in the top-center of Zango’s main www.zango.com web page, “above the fold” (within the portion of the page visible without using scroll bars). Yet the title of the video plainly indicates that the video contains the copyrighted work of others. Moreover, the video features the “DIVX Video” logo, indicating that DivX software was used to extract (“rip”) the video from a DVD. No authorized reproduction would be provided with a DivX overlay, so the presence of the DivX marker confirms that this video was reproduced without permission from the creators of Borat.

Other online video sites have been the target of major copyright litigation. For example, Viacom last year sued Google, alleging that “YouTube appropriates the value of creative content on a massive scale for YouTube’s benefit without payment or license.” In defense, Google points out that YouTube receives videos from independent — potentially granting Google immunity for these infringements due to the Digital Millennium Copyright Act‘s safe harbor for infringements occurring at the direction of users (17 USC 512(c)(1)).

Unlike YouTube, Zango’s video library offers no prominent “upload” function. Some of Zango’s videos arrive through the Revver video-sharing service (discussed below), probably originating with a variety of independent users. But many of the copyrighted videos Zango offers reside on Zango’s servers, not on Revver servers. (For example, all eight of the sexually-explicit videos linked in the first paragraph of the next section are hosted on Zango servers.) Because Zango offers no “upload” function by which ordinary users could have put videos onto Zango’s site, it therefore appears that these videos were provided by Zango or its agents, not by independent users. If so, Zango will not find protection in the DMCA’s safe harbor for infringements caused by users.

Moreover, even if Zango’s videos were provided by independent users, the circumstances of the reproduction seem to render Zango ineligible for the DMCA safe harbor. For one, the safe harbor requires that Zango lack actual knowledge of the infringements. But the infringing videos were obvious and self-evident, not just from their titles and contents, but also from their prevalence in featured results Zango chose to highlight. In addition, the safe harbor requires that Zango not receive a financial benefit directly attributable to the infringements. But Zango used these videos to induce users to download its popup-generating software, a financial benefit that is directly attributable to the infringing videos. (Consider the case of a user who installs Zango in response to solicitation offering a specific copyrighted video clip. Example.) Furthermore, Zango has the right and ability to control the infringement (e.g. by removing the infringing videos). Because Zango’s financial benefit can be directly tracked to a specific infringement, and because Zango has the right and ability to prevent such infringement, Zango seems to fail the test in 17 USC 512(c)(1)(B).

Zango may claim that its videos are fair use. The Copyright Act sets out a four-factor test for determining whether reproduction of a copyrighted work is permissible, despite lack of authorization from the rights-holder. The fair use test calls for considering 1) the purpose and character of the use (e.g. whether commercial or nonprofit), 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion used, and 4) the effect of the use upon the potential market for the work. Factor one is easy: Zango’s use is clearly commercial, which tends to cut against a finding of fair use. Zango might claim that its presentation of excerpts (rather than entire movies) supports a finding of fair use under the third test — but Zango exactly chooses what it views as highlights (e.g. the explicit portions of full-length movies), yielding clips with a greater than usual effect on the potential market for the underlying works. In short, a fair use defense is at best uncertain.

Wide-scale copyright infringement could expose Zango to substantial liability. The Copyright Act provides for statutory damages of “not less than $750” per violation. My examination indicates Zango is reproducing (at least) hundreds of copyrighted videos without any statement of authorization. Furthermore, such videos have surely been downloaded repeatedly — giving rise to potential statutory damages that could easily reach seven digits or more.

Widespread sexually-explicit material, including prominent explicit material nowhere labeled as such

Celebrity Videos Featured by Zango Celebrity Videos Featured by Zango

Prominent Video - Explicit but Unlabeled
Prominent Video – Explicit but Unlabeled

Browse Zango’s video library, and it’s easy to find sexually-explicit video. As shown in the first inset image at right, the bottom-right corner of each Zango “Browse” page gives a list of celebrities — each of them female, each featured in various states of undress. Among other explicit videos of these celebrities, Zango offers “Britney Spears See Thru“, “Britney Spears Black Dress Upskirt“, “Paris Hilton Striptease“, “Rachel Hunter in the Bathtub“, “Jessica Alba’s Chest and You“, “Jessica Simpson Nipple Slip“, “Anna Kournikova Panties Oops“, and “Angelina Jolie Sex Scene.”

The titles and descriptions of many of Zango’s videos suggest that their subjects were unwilling participants. See e.g. “nipple slip” and “upskirt” above, as well as additional videos like Zango’s “Arab wife’s sexy dance secretly taped” and Zango’s “Girlfriend Finds Hidden Camera.”

Through its placement and labeling of sexually-explicit videos, Zango creates a substantial risk that users will receive explicit materials they did not seek. For example, on May 24, I clicked “Browse” to flip through Zango’s content library. Using Zango’s default sort, the third video was entitled “the pool” with comment “havin fun in the pool” (s.i.c.). (Screenshot of the link from within Zango’s video library.) This title and comment give no indication that the resulting material is explicit. But clicking the “Watch” button immediately yields a large video showing two male adults swimming nude, then exiting the pool (entirely disrobed). As best I can tell, Zango did nothing to alert users to this explicit material, nor does Zango prevent (or even discourage) children from viewing such material.

Zango’s May 24 “the pool” video was not a mere anomaly. The same video remained linked in the same way in my tests on May 25 and 26, and on portions of May 27.

In litigation documents, Zango last week claimed that it never distributes explicit material to those do not want it. In particular, Zango argues: “Zango never sends unwanted links to pornography web sites” and “Zango only directs adult-oriented advertisements to a user after that user, by his own behavior, has demonstrated interest in such content.” I disagree. The preceding paragraphs offer a counterexample — Zango prominently providing a link to sexually-explicit materials, and provideing that links to users who never demonstrated interest in any such content. Zango may claim that these links tout videos — not a “web site” as in the first quoted sentence. Alternatively, Zango may claim that the links are not “advertisements” — hence beyond a strict reading of the second quoted sentence. But the underlying contradiction remains: Zango says it doesn’t provide pornography except when users seek it; yet in fact Zango does sometimes deliver explicit materials unrequested.

That Zango funds and distributes sexually-explicit materials is well-known. See e.g. the Sunbelt Blog’s February 2008 conclusion that “80% of [Zango’s] business comes from Seekmo, the porn side of its business.” See also Sunbelt’s off-hand November 2006 remark that “hardcore porno videos [are] funded through Zango Seekmo installs.”

But the scope of explicit materials within Zango’s video library is quite striking. Consider the first page of Zango’s library listings for Angeline Jolie. Beyond the “sex scene” video linked above, the listings also include “Angelina Jolie Taking a Bath”, “Angelina Jolie Under the Sheets”, “Angelina Jolie in Bra & Panties”, “A fairly long nude scene staring Angelina Jolie” (s.i.c.), “Angeline Jolie Getting It On”, “Angelina Jolie Nip Slip”, “Angelina Jolie Hardcore”, and “Angelina Jolie Dominatrix”, and “Angelina Jolie Hot On The Runway.” That’s ten explicit results out of twenty links — suggesting that explicit materials are remarkably widespread on Zango’s site.

The initial version of this article also flagged Zango’s “Nice But” (s.i.c.), a video that on May 27 occupied the fourth-most prominent position in Zango’s “Browse” listings. The thumbnail image of this video appeared to feature a full-screen display of a man’s naked buttocks, filling the entire screen. In a follow-up, Zango points out that in fact, the video shows an extreme close-up zoom of of two hands. So this image and video are not actually explicit. Yet a viewer merely flipping through Zango’s listings would nonetheless see an image that is, by all indications, explicit. The title “but” (s.i.c.) and the keyword “naked,” both adjacent to the thumbnail, reinforce the user’s perception of having seen an unrequested explicit image. Although the image is not actually explicit, the image’s content, placement, and labeling make it likely to leave users with the same feeling as an unrequested image that is actually sexually explicit: In both instances, a viewer who merely sees the image and does not watch the video will think he has seen an unwanted explicit image. In my view, Zango errs in mocking this harm. To the users who Zango tricks, the harm is perfectly real.

Zango’s audio library consists solely of prank phone calls to celebrities

Zango Offers Prank Phone Call Recordings Zango Offers Prank Phone Call Recordings

Zango’s content library offers three types of media: Videos, screensavers, and audio. Despite Zango’s much-touted “content economy,” Zango offers just eight audio clips. And although Zango’s “About Zango” description promises to provide free access to “music,” in fact all eight of these audio files are recordings from talk radio — just voices, with no music at all.

All eight of Zango’s audio recordings share a common theme: Prank phone calls to celebrities. In each, a caller pretends to be someone famous (e.g. the Prime Minister of Canada), and calls a celebrity (e.g. Bill Gates) under the guise of a bona fide discussion. The caller proceeds to berate the celebrity (e.g. by criticizing the features and reliability of Windows).

A comment in several of the videos reveals the source of the recordings: The Masked Avengers, which Wikipedia describes as “a Canadian radio duo … of disk jockeys and comedians Sebastien Trudel and Marc-Antoine Audette, known for making prank calls to famous persons by pretending to be government officials or officers in charitable organizations.” I wrote to Mr. Trudel, who confirmed to me that he has not granted Zango any license to use or reproduce these clips.

After placing these recordings in its content library, Zango further syndicates the materials onto Zango’s partner sites. For example, celebsprankd.com (screenshot) features all eight recordings, but requires users to install Zango before listening. Whois reports that Celebsprankd comes from the Vancouver, B.C. advertising firm Neverblue Media — a conclusion confirmed by the presence of the Neverblue.com web server at the same IP address. Neverblue describes itself as a “leading … online marketing company” offering “premier” advertising and “solid business leads” — claims arguably inconsistent with distributing and profiting from prank phone calls, not to mention distributing Zango. (But these recordings aren’t Neverblue’s only tie to Zango. This month alone, my Automatic Spyware Tester found eleven incidents of Neverblue affiliates buying popup traffic from Zango. I’ve also found dozens more incidents as to Neverblue affiliates buying traffic from other spyware.)

What of Zango’s distribution of these prank call recordings? With so few clips yet such prominent placement (including five of these eight audio recordings featured on Zango’s home page), senior Zango staff surely know what the files contain. Does Zango support prank phone calls? Wasting celebrities’ time under false pretenses? Recording phone calls without permission, even in states that specifically require such permission? It’s hard to reconcile these practices with Zango’s supposed reforms.

Widespread material users can get elsewhere for free, without any popups or other detriments

Much of Zango’s content is available elsewhere without charge and without installing any software that tracks online behavior or shows popup ads. For example, clicking Zango’s “Browse” tab and retaining defaults, every single video on the first page of results is syndicated from Revver. Users could just as easily get these videos directly from Revver, as receive them from Zango. But if users watched these videos at Revver, Zango’s software would not track their web browsing and searching, and users would not receive Zango’s popup ads.

Zango Falsely Claims that Uninstallation Eliminates Content Access Zango Falsely Tells Its Users:
“Uninstallation … eliminates content access”

Furthermore, Zango makes untrue claims about the necessity of its software. For example, Zango claims that “uninstallation … eliminates content access.” It does not. For files hosted at Revver, installation of Zango is not necessary to watch the videos in the first place, and uninstallation does not interfere with watching the videos later. Moreover, even many Zango-hosted files can be accessed without installing Zango, or after uninstalling Zango. For example, Zango’s “Chris Rock on the Daily Show” is actually just a standard Windows Media Video (WMV) distributed from the following URL: preview.licenseacquisition.org/123/1054944882.36393/yikers_chris_rock_on_the_daily_show.wmv . Zango’s “Borats First Trip To An American Gym” (s.i.c.) is preview.licenseacquisition.org/123/1054944854.02531/yikers_borats_first_trip_to_an_american_gym.wmv . Similarly, Zango’s “Bill Gates Gets Pranked” is a WMA hosted at preview.licenseacquisition.org/13/12295/12295.wma . Any user who knows these URLs can easily receive the corresponding files — without ever installing Zango, or after uninstalling Zango. Zango ought not claim otherwise.

Presenting material that content creators never asked to have included in any Zango library

By syndicating videos from Revver, Zango causes its video library to feature materials that content creators never asked to have associated with Zango in any way.

Zango’s syndication of Revver videos has prompted numerous complaints content creators who post videos to Revver. For example, Chris Pirillo asked why his videos are appearing on Zango. (“I don’t remember giving Zango permission to push crapware on my behalf.”) Revver forum user JPPI pointed out the irony of Zango claiming his videos were “FREE, thanks to Zango” when in fact the videos were free all along (even before Zango syndicated them). Revver forum user David complained that it is “kinda deceptive” (s.i.c.) “to make it sound like Zango was the one who made the video free.”

In response, Revver Vice President Asi Behar agreed to ask Zango to remove any Revver videos that Revver authors specifically so designate. But such removals do nothing to cure the deception of Zango requiring that users install its software before watching materials widely available elsewhere for free. Furthermore, such removals do nothing to protect Revver content creators who are unaware of Revver’s relationship with Zango. The word “Zango” appears nowhere on Revver’s official web site (as distinguished from Revver’s forums and some Revver-hosted videos). Thus, a Revver content creator has no easy way to learn about Revver’s relationship with Zango — not to mention learn of the option to request exclusion from Zango.

Zango’s syndication of Revver videos risks tainting the good name of Revver content creators. Consider a user who searches for a Revver video and finds that video hosted at Zango (just as Chris Pirillo did last year). The user may mistakenly conclude that installing Zango is in fact necessary to watch the video. If so, the user is likely to end up with a negative view of the underlying content creator — mistakenly concluding that, e.g., Chris Pirillo has partnered with Zango or endorses Zango’s activities. Revver forum complaints indicate that numerous Revver users share this concern. Yet Revver continues to syndicate videos to Zango without first checking with content creators.

Zango’s problems in context

Last week, Zango was one of four finalists for the Software & Information Industry Association’s CODiE Best Video Content Aggregation Service. In my view, that award is misguided: Far from deserving praise, Zango should be criticized and shunned for reproducing others’ copyrighted work without any apparent license to do so, showing sexually-explicit material unrequested, and offering users a lousy value by bundling extra ads with content users could get elsewhere for free.

Meanwhile, Zango continues litigation with Kaspersky. Recall: Kaspersky blocked Zango’s software from installing; Zango sued; Kaspersky successfully defended on the grounds that the Communications Decency Act, 47 USC 230, immunizes Kaspersky’s behavior because Kaspersky is an “interactive computer service provider” blocking material that, in its subjective opinion, is “objectionable.” In Zango’s appeal, Zango claims its software is not “otherwise objectionable” (brief pages 12-15; PDF pages 17-20). If it’s not objectionable to show explicit material unrequested — not to mention to infringe copyrights on a massive scale, and to insert extra ads around material available elsewhere without such ads – then I don’t know what is.

Finally, I’m often asked whether Zango continues the behaviors I previously reported. Installing through sneaky fake-user-interface pop-up ads that mimic the appearance of official Windows dialog boxes (as I reported last summer)? Yes. I made a fresh video showing such installations just last week.Defrauding advertisers through popups that cover merchants’ sites with their own affiliate offers(as I reported last spring, in September 2005, in summer 2004, and otherwise)? Definitely. This month alone, I reported six Zango incidents to just one of my advertiser clients — not to mention scores of other incidents targeting other web sites and advertisers. Zango repeatedly claims its problems are all in the past, but my hands-on testing continues to indicate otherwise.

The Sears "Community" Installation of ComScore

Late last month, Benjamin Googins (a senior researcher in the Anti-Spyware unit at Computer Associates) critiqued a ComScore installation performed by Sears’ “Sears Holdings Community” (“My SHC Community” or “SHC”). After reviewing the installation sequence, Ben concluded that the installation offered “very little mention of software or tracking” and otherwise fell short of CA and industry standards. I agree.

I write today to add my own critique. I begin by presenting the entire installation sequence in screenshots and video. I then explain why the limited notice provided falls far short of the standards the FTC has established. Finally, I show that Sears’ claims of adequate notice are demonstrably false.

The SHC Installation Sequence

The SHC installation proceeds in four steps:

1) An email from Sears after a user provides an address at Sears.com. In seven paragraphs plus a set of bullet points, 582 words in total, the email describes the SHC service in general terms. But the paragraphs’ topic sentences make no mention of any downloadable software, nor do the bullet points offer even a general description of what the software does. The only disclosure of the software’s effects comes midway through the fourth paragraph, where the program is described as “research software [that] will confidentially track your online browsing.” Sophisticated users who notice this text will probably abandon installation and proceed no further. But novices may mistakenly think the tracking is specific to Sears sites: SHC is a research program offered by Sears, so it is difficult to understand why tracking would occur elsewhere. Furthermore, the quoted text appears midway through a paragraph — in no way brought to users’ attention via topic sentences, headings, section formatting, or other labels. So it’s strikingly easy to miss.

2) If a user presses the “Join” button in the email, the user is taken to a SHC web-based installation sequence that further details SHC’s offerings. The first page describes some aspects of SHC in reasonable detail — with six prominent and clear bullet points. Yet nowhere does this text make any mention whatsoever of downloadable software, market research, or other tracking.

3) Pressing “Join” in the SHC screen takes a user to a “Welcome to My SHC Community” page which requests the user’s name, address, and household size. The page then presents a document labeled “Privacy Statement and User License Agreement” — 2,971 words of text, shown in a small scroll box with just ten lines visible, requiring fully 54 on-screen pages to view in full. The initial screen of text is consistent with the “privacy statement” heading: The visible text indicates that the document describes “what information [SHC] gather[s and] how [SHC] use[s] it” — typical subjects for a privacy policy. But despite the title and the first screen of text, the document actually proceeds to an entirely different subject, namely downloadable software and its far-reaching effects: The tenth page admits that the application “monitors all of the Internet behavior that occurs on the computer on which you install the application, including … filling a shopping basket, completing an application form, or checking your … personal financial or health information.” That’s remarkably comprehensive tracking — but mentioned in a disclosure few users are likely to find, since few users will read through to page 10 of the license.

    Within the Privacy Statement section, a link labeled “Printable version” offers users a full-screen version of the document, requiring “only” ten on-screen pages on my test PC. But nothing in the Privacy Statement caption or visible text suggests that the document merits such thorough review. Due to the labeling and the first screen of text, few users will see any need to click through to the full-screen version.

4) A user next arrives at a screen labeled “You’re almost finished!” Clicking “Next” triggers an ActiveX screen offering an unnamed program, signed by a company called TMRG, Inc. (nowhere previously mentioned in the installation sequence), authenticated by Thawte (part of VeriSign). Pressing Yes in the ActiveX yields an installation program with no further opportunity to cancel installation. Packet sniffer analysis confirms that ComScore software is installed.

See also a video of the installation sequence.

Relevant FTC Rules

The FTC’s recent settlements with Direct Revenue and Zango explain the disclosure and consent required before installing tracking software on users’ computers. To install such software on users’ PCs, vendors must obtain “express consent” — defined to require “clear[] and prominent[] disclos[ure of] the material terms of such software … including the nature and purpose of the program and the effects it will have … prior to the display of, and separate from, any final End User License Agreement.” “Clear[] and prominent[]” installations are defined to be those that are “unavoidable”, among other requirements.

The Sears SHC installation of ComScore falls far short of these rules. The limited SHC disclosure provided by email lacks the required specificity as to the nature, purpose, and effects of the ComScore software. Nor is that disclosure “unavoidable,” in that the key text appears midway through a paragraph, without a heading or even a topic sentence to alert users to the important (albeit vague) information that follows.

The disclosure provided within the Privacy Statement and User License Agreement also cannot satisfy the FTC’s requirements. The FTC demands a disclosure prior to … and separate from” any license agreement, whereas the only disclosure on this page occurs within the license agreement — exactly contrary to FTC instructions. Furthermore, users can easiliy overlook text on page ten of a lengthy license agreement. Such text is the opposite of “unavoidable.”

The SHC/ComScore violation could hardly be simpler. The FTC requires that software makers and distributors provide clear, prominent, unavoidable notice of the key terms. SHC’s installation of ComScore did nothing of the kind.

Other Installation Deficiencies

Beyond the problems set out above, the SHC installation also falls short in other important respects.

Failure to provide the promised additional information. Sears’ initial email promises that “during the registration process, you’ll learn more about this application software.” In fact, no such information is provided in the visible, on-screen installation sequence. Based on this false promise and users’ general experience, users may reasonably expect that the download link in step 4 will offer additional information about the software at issue, along with an opportunity to cancel installation if desired. In fact no such information is ever provided, nor do users have any such opportunity to cancel.

Choosing little-known product names that prevent users from learning more. The initial SHC email refers to the ComScore software as “VoiceFive.” The license agreement refers to the ComScore software as “our application” and “this application” without ever providing the application’s name. The ActiveX prompt gives no product name, and it reports company name “TMRG, Inc.” These conflicting names prevent users from figuring out what software they are asked to accept. Furthermore, none of these names gives users any easy way to determine what the software is or what it does. In contrast, if SHC used the company name “ComScore” or the product name “RelevantKnowledge,” users could run a search at any search engine. These confusing name-changes fit the trend among spyware vendors: Consider Direct Revenue’s dozens of names (AmazingMerchants, BestDeals, Coolshopping, IPInsight, Blackone Data, Tps108, VX2, etc.).

Critiquing Sears SHC’s Response

To my surprise, Sears defends the practices described above. In a reply to CA’s Ben Googins, Sears SHC VP Rob Harles claims that SHC “goes to great lengths to describe the tracking aspect.” In particular, Harles says “[c]lear notice appears in the invitation”, “on the first signup page”, and “in the privacy policy and user licensing agreement.”

I emphatically disagree. The email invitation provides vague notice midway through a lengthy paragraph that, according to its topic sentence, is otherwise about another topic. The first signup page makes no mention at all of any downloadable software. The privacy policy and license agreement describe the software only in the tenth page of text (where few users are likely to find the disclosures), and even then it fails to reference the program by name.

Harles further claims that the installer provides “a progress bar that they [users] can abort.” Again, I disagree. The video and screenshots are unambiguous: The SHC installer shows no progress bar and offers no abort button.

The Installation in Context

In June 2007, I showed other examples of ComScore software installing without consent — including multiple installations through security exploits. TRUSTe responded by removing ComScore’s RelevantKnowledge from TRUSTe’s Trusted Download Program for three months. Now that more than five months have elapsed, I expect that ComScore is seeking readmission. But the installation shown above stands in stark contrast to TRUSTe Trusted Download rules. See especially the requirement that primary notice be “clear, prominent and unavoidable” (Schedule A, sections 3.(a).(iii) and 1.(hh)).

Why so many problems for ComScore? The basic challenge is that users don’t want ComScore software. ComScore offers users nothing sufficiently valuable to compensate them for the serious privacy invasion ComScore’s software entails. There’s no good reason why users should share such detailed information about their browsing, purchasing, and other online activities. So time and time again, ComScore and its partners resort to trickery (or worse) to get their software onto users’ PCs.

Zango’s Compliance Problems

Last November, Zango and the FTC announced a settlement of the FTC’s investigation of Zango’s practices. Among the key requirements: Zango agreed to install only after “clearly and prominently disclos[ing] the material terms [of its software] prior to the display of, and separate from, any [EULA].” Zango further agreed to label each of its ads with a “clear[] and prominent[]” marking as to the source of the ad, as well as a hyperlink to removal and complaint procedures.

Some of Zango’s installations do some of what the settlement requires. But others don’t. Today I’m posting a critique. In a series of screenshots, I show widespread Zango installations with no disclosure outside of a EULA. I also present numerous Zango ads appearing with no labeling at all. Details:

Zango Practices Violating Zango’s Recent Settlement with the FTC

ComScore Doesn’t Always Get Consent updated July 26, 2007

This past Wednesday, ComScore raised $82 million in an IPO that jumped 42% in its first day of trading. Some investors clearly like ComScore’s business, but I wonder whether they fully understand ComScore’s business model, privacy implications, and poor track record of nonconsensual installations.

ComScore’s tracking software is remarkably invasive. The privacy policy for ComScore’s RelevantKnowledge tracking program purports to grant ComScore the right to track users’ name and address, browsing, shopping, and even “online accounts … includ[ing] personal financial [and] health information.” Based on these privacy concerns, well-respected security researchers have long warned about ComScore’s software. For example, in 2004 Cornell University began blocking all communications with ComScore’s MarketScore tracking servers. Multiple other universities (including Columbia University and Indiana University) followed up with special warnings to their users.

At least as serious are ComScore’s installation practices. ComScore pays independent distributors to install ComScore software onto users’ computers. Predictably, some of these distributors install ComScore software without getting user consent. Some specific examples:

  • On Wednesday (June 27, 2007), I browsed ExitExchange, a well-known banner farm widely loaded in popups and popunders by various sites (as well as some spyware programs). ExitExchange showed several ads, one of which performed a security exploit that installed ComScore’s RelevantKnowledge. See video proof. Notice the exploit beginning at 0:12. When I ran a HijackThis scan to check for infections (0:29), I found RelevantKnowledge’s “rk.exe” already running (1:10), even though I had not granted permission for it to install. Packet log analysis indicates that the installation was performed by Topinstalls and by Searchclickads. The installation was predicated on two simultaneous attempted exploits — one using a Java vulnerability, another using a Microsoft MSXML vulnerability. Also installed (all without my consent): Deskwizz/Searchingbooth, Look2me, and WebBuying, among others not yet identified.
  • I previously observed and recorded a substantially similar nonconsensual installation of RelevantKnowledge (by these same distributors) on April 26, 2007.
  • Spyware researchers at Sunbelt Software observed a nonconsensual installation of RelevantKnowledge, seemingly by these same distributors, earlier in June 2007. Sunbelt staff browsed FirstStolz and received an exploit that installed TopInstalls and Searchclickads, which in turn installed RelevantKnowledge.
  • In August-September 2006, I repeatedly observed RelevantKnowledge installed by DollarRevenue, a notorious spyware bundler (subsequently shut down by Dutch law enforcement). In my testing, DollarRevenue installed RelevantKnowledge software without users’ consent. ComScore staff later admitted they had “engaged in partnership negotiations with DollarRevenue.” ComScore claims it never paid DollarRevenue — but I personally observed and recorded DollarRevenue installing ComScore software onto my testing systems.
  • In November 2005, I observed ComScore’s MarketScore software installed by PacerD, a notorious spyware bundler that installed through widespread exploits syndicated through ad networks. PacerD installed RelevantKnowledge without user consent.
  • In April 2007, I observed ComScore’s MarketScore software installed when users request and install a media converter program. The inclusion of MarketScore was disclosed only if users scrolled to page four of a box simply labeled “License Agreement.” No on-screen label indicated that multiple documents were concatenated into that single scroll box, nor did any short notice or other prominent text make any mention of RelevantKnowledge’s presence or effects. These omissions stand in stark contrast to recent FTC precedent requiring “clear and prominent disclosure of material terms prior to and separate from any end user license agreement.”

ComScore’s nonconsensual installations are particularly notable because TRUSTe’s Trusted Download program recently granted a certification (albeit “provisional”) to ComScore’s RelevantKnowledge software. I’ve previously criticized other TRUSTe certifications — concerned that TRUSTe-certified sites may be no safer than other sites, and arguably less safe. That said, to TRUSTe’s credit, Integrated Search Technologies’ Vomba is no longer on TRUSTe’s Trusted Download list — albeit a result that TRUSTe attributes to Vomba’s financial concerns rather than to security researcherscritique of Vomba’s practices and lineage. Whatever the reasons for IST’s removal, perhaps ComScore’s MarketScorecould stand for an equally thorough review.

ComScore also boasts a “WebTrust” seal from Ernst & Young. See the associated Audit Report. Ernst & Young indicates that it “test[ed] and evaluat[ed] the operating effectiveness” of ComSCore’s internal controls but concedes that “error or fraud may occur and not be detected.”

Update – TRUSTe’s Response (July 26, 2007)

On Friday July 20 — well after the close of the East Coast business day, and fully three weeks after I first reported the nonconsensual installs described above — TRUSTe announced that ComScore’s RelevantKnowledge has been removed from the Trusted Download whitelist for three months.

I have mixed views about this outcome. On one hand, it’s certainly an improvement from prior TRUSTe practice, during which companies as notorious as Direct Revenue were allowed to continue to hold TRUSTe privacy seals despite widespread nonconsensual installations. But a comment from Sunbelt Software’s Eric Howes offers compelling concerns. Eric explains:

[TRUSTe has] essentially decided to continue working with ComScore, provided ComScore spends a token amount of time in the “naughty corner.” … Who loses as a result? Consumers and web surfers ultimately, as ComScore will be allowed to continue plying its trade of surreptitious, underhanded installs of its RelevantKnowledge software to support some very aggressive and intrusive data collection on unsuspecting users’ machines, all with PR cover from TRUSTe.

Eric also cites a June 27 exchange between Sunbelt CEO Alex Eckleberry and TRUSTe’s Colin O’Malley. Transcribing from the audio recording of the Anti-Spyware Coalition‘s public workshop :

Alex Eckelberry: “So what if you have an application that is installing through an exploit? Do those guys go through a probationary process, or do they just get cut off? Are they just gone?”

Colin O’Malley: “If they’re installing through an exploit, that’s covered in what’s described in what we describe as our prohibited activities. That’s not an activity that is acceptable by any level of notice, and so they’re terminated immediately.”

Alex Eckelberry: “Good. OK.”

Remarkably, TRUSTe’s spokesperson now claims Colin promised termination only when a vendor itself uses exploits, but not when its distributors do so. Reports Vnunet: “‘Colin [O’Malley]’s remarks were specifically about a company that is directly responsible,’ the spokesperson explained. ‘In this case, it was the affiliate that was exploiting the flaw.'”

I’ve read and reread the exchange, and listened repeatedly for good measure. On my interpretation, Colin plainly promised to terminate any vendor whose software is becoming installed through exploits — no matter whether the vendor itself performs the exploit, or whether the exploit is performed by one of the vendor’s distributors. I reach this conclusion for two separate reasons:

1) The plain language of Alex’s question is intentionally inclusive as to who is doing the installation. Notice the broad “that is installing” — vague as to how exactly the installation is occurring.

2) Distributor-perpetrated exploit installs have been standard practice in the “adware” industrry. That’s what I widely observed as to 180solutions, Direct Revenue, eXact Advertising, and so many others. Meanwhile, vendor-perpetrated exploit installs are few and far between — common only among little-known companies, and even then usually comingled with installing third parties’ software. So if Colin had wanted to remark only on the (unusual or unprecedented) vendor-perpetrated exploits, he would have needed to say that specifically.

Perhaps TRUSTe regrets the breadth of Colin’s promise. But Colin made a tough commitment for good reason: As Colin spoke to dozens of anti-spyware researchers already suspicious of Trusted Download, his big promises helped bolster TRUSTe’s credibility. Had Colin told the ASC what now seems to be TRUSTe’s policy — that some exploit-based installs yield only a temporary suspension — I gather Alex would have questioned Colin further to emphasize the need for a tougher response. Other meeting attendees would probably have done the same.

In any event, if Colin’s goal was to build support among anti-spyware researchers, his efforts don’t seem to be succeeding. Eric continues:

Th[is] case was significant in that it was the first big public test of how well TRUSTe would perform when called to defend the standards that allegedly undergird the Trusted Download program. When push came to shove, though, TRUSTe demonstrated itself to be lacking the backbone to deliver on its word. [This is] another illustration of why we at Sunbelt place no value whatsoever in TRUSTe’s whitelisting and certifications.

Added FaceTime’s Chris Boyd:

For Gods sake, when are we going to stop gimping around and actually break out some actual punishments for people? Either kick someone from your program and be done with it, or … just give up already.

TRUSTe’s extreme delay further compromises the standing of Trusted Download: Three weeks elapsed before TRUSTe responded to my documentation and proof of nonconsensual ComScore RelevantKnowledge installations. Throughout that period, the Trusted Download whitelist continued to list RelevantKnowledge — falsely suggesting that RelevantKnowledge was in good standing. Internet users deserve better: When TRUSTe learns of an infraction of such seriousness, all applicable web pages ought to be updated promptly, lest the Internet community mistakenly proceed in reliance on TRUSTe’s supposed diligence.

Bad Practices Continue at Zango, Notwithstanding Proposed FTC Settlement and Zango’s Claims with Eric Howes; updated December 8, 2006

Earlier this month, the FTC announced the proposed settlement of its investigation into Zango, makers of advertising software widely installed onto users’ computers without their consent or without their informed consent (among other bad practices).

We commend the proposed settlement’s core terms. But despite these strong provisions, bad practices continue at Zango — practices that, in our judgment, put Zango in violation of the key terms and requirements of the FTC settlement. We begin by explaining the proposed settlement’s requirements. We then present eight types of violations of the proposed settlement, with specific examples of each. We conclude with recommendations and additional analysis.

Except where otherwise indicated, this document describes only downloads we tested during November 2006 — current, recent installations and behaviors.

Zango’s Burdens Under the Proposed FTC Settlement

The FTC’s proposed settlement with Zango imposes a number of important requirements and burdens on Zango, including Zango’s installation and advertising practices. Specifically, the settlement:

  • Prohibits Zango from using “any legacy program to display any advertisement to, or otherwise communicate with, a consumer’s computer.” (settlement I)
  • Prohibits Zango from (directly or via third parties) “exploit[ing] a security vulnerability … to download or install onto any computer any software code, program, or content.” (II)
  • Prohibits from Zango installing software onto users’ computers without “express consent.” Obtaining “express consent” requires “clearly and prominently disclos[ing] the material terms of such software program or application prior to the display of, and separate from, any final End User License Agreement.” (III) Defines “prominent” disclosure to be, among other requirements, “unavoidable.” (definition 5)
  • Requires Zango to “provide a reasonable and effective means for consumers to uninstall the software or application,” e.g. through a computers’ Add/Remove utility. (VII)
  • Requires Zango to “clearly and prominently” label each advertisement it displays. (VI)

These are serious burdens and requirements that, were they zealously satisfied by Zango, would do much to protect consumers from the numerous nonconsensual and misleading Zango installations we have observed.

Zango Is Not In Compliance with the Proposed Settlement

Zango has claimed that it “has met or exceeded the key notice and consent standards detailed in the FTC consent order since at least January 1, 2006.”

Despite Zango’s claim, we continue to find ongoing installations of Zango’s software that fall far short of the proposed settlement’s burdens, requirements, and standards. The example installations that we present below establish that Zango’s current installation and advertising practices remain in violation of the terms and requirements of the proposed settlement.

  • “Material Terms” Disclosed Only in EULA
    Zango often announces “material terms” only in its End User License Agreement, not in the more prominent locations required by the proposed settlement. (Examples A, B)
  • “Material Terms” Omitted from Disclosure
    Zango often omits “material terms” from its prominent installation disclosures — failing to prominently disclose facts likely to affect consumers’ decisions to install Zango’s software. (Examples A, B, C)
  • Disclosures Not Clear & Prominent 
    Zango presents disclosures in a manner and format such that these disclosures fail to gain the required “express consent” of users because the disclosures are not “clearly and prominently” displayed. (Examples B, E, F)
  • Disclosures Presented Only After Software Download & Execution
    Zango presents disclosures only after the installation and execution of Zango’s software on the users’ computers has already occurred, contrary to the terms of the proposed settlement. (Examples C, F)
  • No Disclosure Provided Whatsoever
    Some Zango software continues to become installed with no disclosure whatsoever. (Example D)
  • Installation & Servicing of Legacy Programs
    Older versions of Zango’s software — versions with installation, uninstallation, and/or disclosure inconsistent with the proposed settlement — continue to become installed and to communicate with Zango servers. (Examples C, D, E, F)
  • Installations Promoted & Performed through Miscellaneous Other Deceptive Means & Circumstances
    Zango installs are still known to be promoted and performed in or through a variety of miscellaneous practices that can only be characterized as deceptive. (Multiple examples in section G)
  • Unlabeled Advertising
    Some Zango advertisements lack the labeling required by the proposed settlement. (Multiple examples in section H)

These improper practices remain remarkably easy to find, and we have numerous additional recent examples on file. Moreover, these problems are sufficiently serious that they cast doubt on the efficacy and viability of the FTC’s proposed settlement as well as Zango’s ability to meet the requirements of the settlement.

Example A: Zango’s Ongoing Misleading Installations On and From Its Own Servers

The proposed settlement requires “express consent” before software may be “install[ed] or “download[ed]” onto users’ PCs (III). The term “prominent” is defined to mean “clear[] and prominent[]” disclosure of “the material terms” of the program to be installed, and most of Zango’s recent installation disclosures seem to meet this standard. But we are concerned by what those disclosures say. In our view, the disclosures omit the material facts Zango is obliged to disclose.

Although the proposed settlement does not explain what constitute “material” terms, other FTC authority provides a definition. The FTC’s Policy Statement on Deception, holds that a material fact is one “likely to affect the consumer’s conduct or decision with regard to a product or service.”

From our analysis of Zango’s software, we think Zango has two material features — two features particularly likely to affect a reasonable user’s decision to install (or not install) Zango software. First, users must know that Zango will give them extra pop-up ads — not just “advertisements,” but pop-ups that appear in separate, freestanding windows. Second, users must know that Zango will transmit detailed information to its servers, including information about what web pages they view, and what they search for.

A Misleading Zango Installer Appearing Within Windows Media Player A Misleading Zango Installer Appearing Within Windows Media Player

Unfortunately, many of Zango’s installations fail to include these disclosures with the required prominence. Consider the screen shown at right. Here, Zango admits that it shows “advertisements,” but Zango fails to disclose that its ads appear in pop-ups. Zango’s use of the word “advertisements,” with nothing more, suggests that Zango’s ads appear in standard advertising formats — formats users are more inclined to tolerate, like ordinary banner ads within web pages (e.g. the ads at nytimes.com) or within other software programs (e.g. the ads in MSN Messenger). In fact Zango’s pop-up ads are quite different, in that they appear in pop-ups known to be particularly annoying and intrusive. But the word “advertisements” does nothing to alert users to this crucial fact.

Zango also fails to disclose that its servers receive detailed information about users’ online behavior. Zango tell users that ads are “based on” users’ browsing. But this disclosure is not enough, because it omits a material fact. In particular, the disclosure fails to explain that users’ behavior will be transmitted to Zango, a fact that would influence reasonable users’ decision to install Zango.

In addition, Zango’s description of its toolbar omits important, material effects of the toolbar — namely, that the toolbar will show distracting animated ads. Zango says only that the toolbar “lets [users] search the Internet from any webpage” — entirely failing to mention the toolbar’s advertising,

We’re also concerned about the format and circumstances of these installation screens. Zango’s installation request appears in a Windows Media “license acquisition” screen — a system Microsoft provides for bona fide license acquisition, not for the installation of spyware or adware. Zango’s installer appears within Windows Media Player — a context where few users will expect to be on the lookout for unwanted advertising software, particularly when users had merely sought to watch a video, not to install any software whatsoever. Furthermore, the button to proceed with installation is misleadingly labeled “Play Now” — not “I Accept,” Install,” or any other caption that might alert users to the consequences of pressing the button. The screen’s small size further adds to user confusion: At just 485 by 295 pixels, the window doesn’t have room to explain the material effects of Zango’s software, even with Zango’s extra-small font. (In Zango’s main disclosure, capital letters are just seven pixels tall.) Furthermore, a user seeking to read Zango’s EULA (as embedded in these installation screens) faces a remarkable challenge: The 3,033 word document is shown in a box just five lines tall, therefore requiring fully 53 on-screen pages to view in full. Finally, if a user ultimately presses the “Play Now ” button, then the “Open” button on the standard Open/Save box that follows, Zango installs immediately, without any further opportunity for users to learn more or to change their mind. Such a rapid installation is contrary to standard Windows convention of further disclosures within an EXE installer, providing further opportunities for users to learn more and to change their minds. Video capture of this installation sequence.

All in all, we think typical users would be confused by this screen — unable to figure out who it comes from, what it seeks to do, or what exactly will occur if they press the Play Now button. A more appropriate installation sequence would use a standard format users better understand (e.g. a web page requesting permission to install), would tell users far more about the software they’re receiving, and would label its buttons far more clearly.

These installations are under Zango’s direct control: They are loaded directly from Zango’s servers. Were Zango so inclined, it could immediately terminate this installation sequence, or it could rework these installations, without any cooperation with (or even requests to) its distributors.

Example B: Zango’s Ongoing Misleading Hotbar Installations On and From Its Own Servers

Hotbar's Initial Installation Solicitation - Silent as to Hotbar's Effects Hotbar’s Initial Installation Solicitation – Silent as to Hotbar’s Effects

Hotbar's ActiveX Installer - Without Disclosure of Material Effects Hotbar’s ActiveX Installer – Without Disclosure of Material Effects

Final Step in Hotbar Installation - No Cancel Button, No Disclosure of Material Effects Final Step in Hotbar Installation – No Cancel Button, No Disclosure of Material Effects

The “express consent” required under the proposed settlement applies not just to software branded as “Zango,” but also to all other software installed or downloaded by Zango. (See “any software” in section III.) The “express consent” requirement therefore applies to Hotbar-branded software owned by Zango as a result of Zango’s recent merger with Hotbar. But Hotbar installations fail to include unavoidable disclosures of material effects, despite the requirements in the proposed settlement.

Consider the Hotbar installation shown in this video and in the screenshots at right. The installation sequence begins with an ad offering “free new emotion icons” (first screenshot at right) — certainly no disclosure of the resulting advertising software, the kinds of ads to be shown, or the significant privacy effects. If a user clicks that ad, the user receives the second screenshot at right — a bare ActiveX screen, again lacking a substantive statement of material effects of installing. If the user presses Yes in the ActiveX screen, the user receives the third screen at right — disclosing some features of Hotbar (e.g. weather, wallpapers, screensavers), and vaguely admitting that Hotbar is “ad supported,” but saying nothing whatsoever about the specific types of ads (e.g. intrusive in-browser toolbar animations) nor the privacy consequences. Furthermore, this third screen lacks any button by which users can decline or cancel installation. (Note the absence of any “cancel” button, or even an “x” in the upper-right corner.)

This installation sequence is substantially unchanged from what Edelman reported in May 2005.

This installation lacks the unavoidable material disclosures required under the proposed settlement. We see no way to reconcile this installation sequence with the requirements of the proposed settlement.

Example C: Incomplete, Nonsensical, and Inconsistent Disclosures Shown by Aaascreensavers Installing Zango Software

Aaascreensavers' Initial Zango Prompt - Omitting Key Material Information Aaascreensavers’ Initial Zango Prompt – Omitting Key Material Information

Zango's Subsequent Screen -- with deficiencies set out in the text at left Zango’s Subsequent Screen — with deficiencies set out in the text at left

We also remain concerned about third parties installing Zango’s software without the required user consent. Zango’s past features a remarkable serious of bad-actor distributors, from exploit-based installers to botnets to faked consent. Even today, some distributors continue to install Zango without providing the required “clear and prominent” notice of “material” effects.

Consider an installation of Zango from Aaascreensavers.com. Aaascreensavers provides a generic “n-Case” installation disclosure that says nothing about the specifics of Zango’s practices — omitting even the word “advertisements,” not to mention “pop-ups” or privacy consequences. (See first screenshot at right.) Furthermore, Aaascreensavers fails to show or even reference a EULA for Zango’s software. Nonetheless, Aaascreensavers continues to place Zango software onto users’ PCs through these installers.

Particularly striking is the nonsensical screen that appears shortly after Aaascreensavers installs Zango. (See second screenshot at right.) Beneath a caption labeled “Setup,” the screen states “the content on this site is free, thanks to 180search Assistant” — although the user has just installed a program (and is not browsing a site), and the program the user (arguably) just agreed to install was called “n-Case” not “180search Assistant.” At least as paradoxically, the “Setup” screen asks users to choose between “Uninstall[ing] 180search Assistant” and “Keep[ing]” the software. Since “180search Assistant” is software reasonable users will not even know they have, this choice is particularly likely to puzzle typical users. After all, it is nonsense to speak of a user making an informed decision to “keep” software he didn’t know he had.

Crucially, both installation prompts omit the material information Zango must disclose under its settlement obligations: Neither prompt mentions that ads will be shown in pop-ups, nor do they mention the important privacy effects of installing Zango software.

Video capture of this installation sequence.

Example D: Msnemotions Installing Zango with No Disclosure At All

Msnemotions continues to install Zango software with no disclosure whatsoever. In particular, Msnemotions never shows any license agreement, nor does it mention or reference Zango in any other on-screen text, even if users fully scroll through all listings presented to them. Video proof.

This installation is a clear violation of section III of the proposed FTC settlement. That section prohibits Zango “directly, or through any person [from] install[ing] or download[ing] … any software program or application without express consent.” Here, no such consent was obtained, yet Zango software downloaded and installed anyway.

In our tests, this Zango installation did not show any ads (although it did contact a Zango server and download a 20MB file). Nonetheless, the violation of section III occurs as soon as the Zango software is downloaded onto the user’s computer, for lack of the requisite disclosure and consent.

Example E: Emomagic Installing Zango with an Off-Screen Disclosure

Emomagic First Mentions Zango Five Pages Down In Its EULA
Emomagic First Mentions Zango 5 Pages Down In Its EULA

Emomagic continues to install Zango software with a disclosure buried five pages within its lengthy (23 on-screen-page) license agreement. That is, unless a user happened to scroll to at least the fifth page of the Emomagic license, the user would not learn that installing Emomagic installs Zango too. Video proof.

This installation is a clear violation of the proposed FTC settlement, because the hidden disclosure of Zango software is not “unavoidable.” In contrast, the proposed Settlement’s provision III and definition 5 define “prominent” disclosures to be those that are unavoidable, among other requirements.

We have additional examples on file where the first mention of Zango comes as far as 64 pages into a EULA presented in a scroll box. See also example F, below, where Zango appears 44 pages into a EULA, after the GPL.

Example F: Warez P2P Speedup Pro Installing Zango with an Off-Screen Disclosure

Warez P2P First Mentions Zango at Page 44 of its EULA, Below the GPL Warez P2P First Mentions Zango at Page 44 of its EULA, Below the GPL

Warez P2P Speedup Pro continues to install Zango software with a disclosure buried 44 pages within its lengthy license agreement. Video proof. Users are unlikely to see mention of Zango in part because Zango’s first mention comes so far down within the EULA.

Users are particularly unlikely to find Zango’s EULA because the first 43 pages of the EULA scroll box show the General Public License (GPL). (Screenshot of the first page, giving no suggestion that anything but the GPL appears within the scroll box.) Sophisticated users may already be familiar with this license, which is known for the many rights it grants to users and independent developers. Recognizing this pro-consumer license, even sophisticated users are discouraged from reviewing the scroll box’s contents in full — making it all the less likely that they will find the Zango license further down.

After installation, Warez P2P Speedup Pro proceeds to the second screen shown in Example C, above. The video confirms the special deceptiveness of this screen: If a user chooses the “uninstall” button — exercising his option (however deceptively mislabeled) to refuse Zango’s software — the user then receives a further screen attempting to get the user to change his mind and accept installation after all. The substance of this screen is especially deceptive — asking the user whether he wants to “cancel,” when in fact he had never elected even to start the Zango installation sequence in the first place. Finally, if the user presses the “Exit Setup” button on that final screen, the user is told he must restart his computer — a particularly galling and unnecessary interruption.

Section G: Zango Installations Predicated on Consumer Deception or on Use of Other Vendors’ Spyware

A Zango Ad Injected into Google by FullContext A Zango Ad Injected into Google by FullContext

We have also observed Zango installs occurring subsequent to consumer deception or other vendors sending spyware-delivered traffic to Zango.

Fullcontext spyware promoting Zango. We have observed Fullcontext spyware (itself widely installed without consent) injecting Zango ads into third parties’ web sites. Through this process, Zango ads appear without the permission of the sites in which they are shown, and without payment to those sites. These ads even appear in places in which no banner ads are not available for purchase at any price. See e.g. the screenshot at right, showing a Zango banner ad injected to appear above Google’s search results.

Typosquatters promoting Zango. Separately, Websense and Chris Boyd recently documented Zango installs commencing at “Yootube”. “Yootube” is a clear typosquat on the well-known “Youtube” site — hoping to reach users who mistype the address of the more popular site. If users reach the misspelled site, they will be encouraged to install Zango. Such Zango installations are predicated on a typosquat, e.g. on users reaching a site other than what they intended — a particularly clear example of deception serving a key role in the Zango installation process.

Spyware bundlers promoting Zango. In our testing of summer and fall 2006, we repeatedly observed Zango “S3” installer programs downloaded onto users’ computers by spyware-bundlers themselves operating without user consent (e.g. DollarRevenue and TopInstalls). Users received these Zango installation prompts among an assault of literally dozens of other programs. Any consent obtained through this method is predicated on an improper, nonconsensual arrival onto users’ PCs — a circumstance in which we think users cannot grant informed consent. Furthermore. the proposed settlement requires “express consent” before “installing or downloading” (emphasis added) “any software” onto users’ PCs (section III). Zango’s S3 installer is a “software program” within the meaning of the proposed settlement, yet DollarRevenue and TopInstalls downloaded this program onto users’ computers without consent. So these downloads violate the plain language of the proposed settlement, even where users ultimately refuse to install Zango software.

Update (December 8): We have uncovered still other Zango installations predicated on deception, including on phishing at MySpace. We discuss these improper practices in our follow-up comment to the FTC. Our bottom line: These Zango installs are disturbing not because they put zango in violation of hte terms of hte proposed settlement, but precisely because they do not — because tehse isntallations, disturbing though they may be, do not clearly violate any of the settlement’s requirements. These installations raise the alarming prospect that this settlement could allow Zango to continue to pay distributors to create malicious and/or deceptive software and web pages.

Section H: Unlabeled Ads

Today CDT filed a further comment about the FTC’s proposed settlement, focusing in part on Zango’s recent display of unlabeled ads, again specifically contrary to Zango’s obligations under the proposed settlement (section VI). CDT has proof of 39 unlabeled ads — 10% of their recent partially-automated tests — in which Zango’s pop-up ads lacked the labeling required under the proposed settlement. CDT explains that the ads “provide[d] absolutely no information that would allow consumers to correlate the advertisements’ origins to Zango’s software.”

We share CDT’s concern, because we too have repeatedly seen these problems. For example, this video shows a Zango ad served on November 19, 2006 — with labeling that disappears after less than four seconds on screen (from 0:02 to 0:06 in the video). Furthermore, Edelman first reported this same problem in July 2004: That when ads include redirects (as many do), Zango’s labeling often disappears. Compliance with the proposed settlement requires that Zango’s labeling appear on each and every ad, not just on some of the ads or even on most of the ads. So, here too, Zango is in breach of the proposed settlement.

Furthermore, the proposed settlement’s labeling requirement applies to “any advertisement” Zango serves — not just to Zango’s pop-ups, but to other ads too. Zango’s toolbars show many ads, as depicted in the screenshots below. Yet these toolbars lack the labeling and hyperlinks required by the proposed settlement. These unlabeled toolbars therefore constitute an additional violation of Zango’s duties under the proposed settlement.


Zango and Zango/Hotbar Toolbars Without the Labeling Required under the Proposed Settlement

The Size of Zango’s Payment to the FTC

We are puzzled by the size of the cash payment to be made by Zango. We understand that the FTC’s authority is limited to reclaiming ill-gotten profits, not to extracting penalties. But we think Zango’s profits to date far exceed the $3 million payment specified in the proposed settlement.

Available evidence suggests Zango’s company-to-date profits are substantial, probably beyond $3 million. As a threshold matter, Zango’s business is large: Zango claims to have 20 million active users at present (albeit with some “churn” as users manage to uninstall Zango’s software). Furthermore, Zango’s revenues are large: Zango recently told a reporter of daily revenues of $100,000 (i.e. $36 million per year), a slight increase from a 2003 report of $75,000 per day. With annual revenues on the order of $20 to $40 million, and with three years of operation to date, we find it inconceivable that Zango has made only $3 million of profit.

Zango’s prior statements and other companies’ records also both indicate that Zango’s profits exceed $3 million. A 2005 Forbes article confirms high profits at Zango, reporting “double-digit percentage growth in profits” — though without stating the baseline level of profits. But financial records from competing “adware” vendor Direct Revenue indicate a remarkable 75%+ profit margin: In 2004, DR earned $30 million of pre-tax profit on $38 million of revenue. Because Zango’s business is in many respects similar to DR, Zango’s profit margin is also likely to be substantial, albeit reduced from the 2004-era “adware” peak. Even if Zango’s profit margin were an order of magnitude lower, i.e. 7%, Zango would still have earned far more than $3 million profits over the past several years.

If Zango’s profits substantially exceed $3 million, as we think they do, the settlement’s payment is only a slap on the wrist. A tougher fine — such as full disgorgement of all company-to-date profits worldwide — would better send the message that Zango’s practices are and have been unacceptable.

Zango’s Statements and the Need for Enforcement

In its November 3 press release, Zango claims its reforms are already in place. “Every consumer downloading Zango’s desktop advertising software sees a fully and conspicuously disclosed, plain-language notice and consent process,” Zango’s press release proclaims. This claim is exactly contrary to the numerous examples we present above. Zango further claims that it “has met or exceeded the key notice and consent standards detailed in the FTC consent order since at least January 1, 2006” — again contrary to our findings that nonconsensual and deceptive installations remain ongoing.

From the FTC’s press release and from recent statements of FTC commissioners and staff, it appears the FTC intends to send a tough message to makers of advertising software. We commend the FTC’s goal. The proposed settlement, if appropriately enforced, might send such a message. But we worry the FTC will send exactly the opposite message if it allows Zango to claim compliance without actually doing what the proposed settlement requires.

As a first step, we endorse CDT’s suggestion that the FTC require Zango to retract its claim of compliance with the proposed settlement. Zango’s statement is false, and the FTC should not stand by while Zango mischaracterizes its behavior vis-a-vis the proposed settlement.

More broadly, we believe intensive ongoing monitoring will be required to assure that Zango actually complies with the settlement. We have spent 3+ years following Zango’s repeated promises of “reform,” and we have first-hand experience with the wide variety of techniques Zango and its partners have used to place software onto users’ PCs. Testing these methods requires more than black-letter contracts and agreements; it requires hands-on testing of actual infected PCs and the scores of diverse infection mechanisms Zango’s partners devise. To assure that Zango actually complies with the agreement, we think the FTC will need to allocate its investigatory resources accordingly. We’ve spent approximately 10 hours on the investigations leading to the results above, and we’ve uncovered these examples as well as various others. With dozens or hundreds of hours, we think we could find many more surviving Zango installations in violation of the proposed settlement’s requirements. We think the FTC ought to find these installations, or require that Zango do so, and then ought to see that the associated files are entirely removed from the web.

Update (December 8): Our follow-up comment to the FTC discusses additional concerns, further ongoing bad practices at Zango, and the special difficulty of enforcement in light of practices seemingly not prohibited by the proposed settlement.

Intermix Revisited

I recently had the honor of serving as an expert witness in The People of the State of California ex. rel. Rockard J. Delgadillo, Los Angeles City Attorney v. Intermix Media, Inc., Case No. BC343196 (L.A. Superior Court), litigation brought by the City Attorney of Los Angeles (on behalf of the people of California)against Intermix. Though Intermix is better known for creating MySpace, Intermix also made spyware that, among other effects, can become installed on users’ computers without their consent.

On Monday the parties announced a settlement under which Intermix will pay total monetary relief of $300,000 (including $125,000 of penalties, $50,000 in costs of investigation, and $125,000 in a contribution of computers to local non-profits). Intermix will also assure that third parties cease continued distribution of its software, among other injunctive relief. These penalties are in addition to Intermix’s 2005 $7.5 million settlement with the New York Attorney General.

In the course of this matter, I had occasion to examine my records of past Intermix installations. For example, within my records of installations I personally observed nearly two years ago, I found video evidence of Intermix becoming installed by SecondThought. By all indications, SecondThought’s exploit-based installers placed Intermix onto users’ computers without notice or consent.

Using web pages and installer files found on Archive.org, I also demonstrated that installations on Intermix’s own web sites were remarkably deficient. For example, some Intermix installations disclosed only a portion of the Intermix programs that would become installed, systematically failing to tell users about other programs they would receive if they went forward with installation. Most Intermix installations failed to affirmatively show users their license agreements, instead requiring users to affirmatively click to access the licenses; and in some instances, even when a user did click, the license was presented without scroll bars, such that even a determined user couldn’t read the full license. Furthermore, some Intermix installations claimed a home page change would occur only if a user chose that option (“you can choose to have your default start page reset”), when in fact that change occurred no matter what, without giving users any choice.

Remarkably, I also found evidence of ongoing Intermix installations, despite Intermix’s 2005 promise to “permanently discontinue distribution of its adware, redirect and toolbar programs.” For example, in my testing of October 2006 and again just yesterday, the Battling Bones screensaver (among various others) was still available on Screensavershot.com (a third-party site). Installing Battling Bones gives users Intermix’s Incredifind too. Even worse, this installation proceeds without any disclosure to the user of the Intermix software that would be installed. (Video proof. The installer’s EULA mentions various other programs to be installed, but it never mentions Intermix or the specific Intermix programs that in fact were installed.) Furthermore, I found dozens of “.CAB” installation files still on Intermix’s own web servers — particularly hard to reconcile with Intermix’s claim of having abandoned this business nearly two years months ago. Truly shutting down the business would have entailed deleting all such files from all servers controlled by Intermix.

I continue to think there’s substantial room for litigation against US-based spyware vendors. I continue to see nonconsensual and materially deceptive installations by numerous identifiable US spyware vendors. (For example, I posted a fresh Ask.com nonconsensual toolbar installation just last month. And I see more nonconsensual installations of other US-based vendors’ programs, day in and day out.) These vendors continue to cause substantial harm to the users who receive their unwanted software.


Technology news sites and forums have been abuzz over the FTC’s proposed settlement with Zango, whose advertising software has widely been installed without consent or without informed consent. I commend the FTC’s investigation, and the injunctive terms of the settlement (i.e. what Zango has to do) are appropriately tough. Oddly, Zango claims to have “met or exceeded the key notice and consent standards … since at least January 1, 2006.” I disagree. From what I’ve seen, Zango remains out of compliance to this day. I’m putting together appropriate screenshot and video proof.

Current Ask Toolbar Practices

Last year I documented Ask toolbars installing without consent as well as installing by targeting kids. Ask staff admitted both practices are unacceptable, and Ask promised to make them stop. Unfortunately, Ask has not succeeded.

In today’s post, I report notable current Ask practices. I show Ask ads running on kids sites and in various noxious spyware, specifically contrary to Ask’s prior promises. I document yet another installation of Ask’s toolbar that occurs without user notice or consent. I point out why Ask’s toolbar is inherently objectionable — especially its rearrangement of users’ browsers and its excessive pay-per-click ads to the effective exclusion of ordinary organic links. I compare Ask’s practices with its staff’s promises and with governing law — especially “deceptive door opener” FTC precedent, prohibiting misleading initial statements even where clarified by subsequent statements.

Details:

Current Practices of IAC/Ask Toolbars

Direct Revenue’s Dirty Documents

On Tuesday, the New York Attorney General filed suit against notorious spyware vendor Direct Revenue. In a detailed complaint, the NYAG alleged Direct Revenue surreptitiously installed spyware onto users’ computers and made its spyware exceptionally difficult to remove. The suit includes claims under New York’s General Business Law (prohibiting false advertising and deceptive business practices), New York’s Penal Law (prohibiting computer tampering), and New York’s common law prohibitions against trespass.

The NYAG’s complaint was accompanied by more than a thousand pages of exhibits and appendices. Some of these documents present the results of NYAG’s testing — narratives of misleading and nonconsensual installation, not unlike my own installation tests. But the NYAG also produced a treasure trove of documents: Internal Direct Revenue documents, records, and emails that present their strategy, intentions, and plans in great detail.

I have obtained these additional documents and posted them to a new page:

People of the State of New York v. Direct Revenue, LLC – Documents and Analysis

Some documents and findings of particular interest:

  • Revenues reported at $6.9 million in 2003, $39 million in 2004, $33 million in January-October 2005. 2004 expenses total only $13 million, for a profit margin of 66%.
  • Payments to Direct Revenue’s senior staff, totaling more than $27 million.
  • A list of distributors of Direct Revenue’s spyware, with the number of installations attributable to each.
  • Admission that Direct Revenue for a time sold a “majority” of its advertising through ad networks Traffic Marketplace and ValueClick.
  • Admission that Direct Revenue’s ads appear so frequently that they constitute “user abuse.” But reducing ad frequency lowers company revenues, so frequency stays high.
  • Admission that Direct Revenue previously tracked and transmited users’ GET and POST data — names, addresses, emails — and even sent this data to third parties Hitwise and Compete.com. Itemizes the specific personal information collected from online forms: first name, last name, e-mail address, street address, and zip code. Hitwise reports successfully analyzing and matching users’ IDs, genders, and phone numbers.
  • Instructs making Direct Revenue harder to remove, by deleting its entry from Control Panel’s Add/Remove Programs, because too many users were relying on that method to remove Direct Revenue.
  • Report of April-June 2005 payments from Yahoo, totaling more than $600,000 in those three months alone.
  • Installation by Direct Revenue of Ebates’ Moe Money Maker onto users’ computers.
  • Listing of Direct Revenue’s many names and shell companies, all used to confuse and deceive the public.
  • Complaints from Direct Revenue partners, such as Kazaa (which called Direct Revenue’s ads “purposefully confusing to the user”) and Integrated Search (which wanted Direct Revenue to include an uninstaller in Control Panel, as previously promised)
  • Threatening the Center for Democracy and Technology. Demanding revisions from CNET. Hiring an investigator to track anti-spyware researcher Webhelper, and planning tactics to intimidate him.
  • Claims I am “losing credibility in the industry” and calls me a “fanatic.”
  • Endorses NYAG’s suit against Intermix as an “important opportunity to draw a bright line between purveyors of spyware and legitimate behavioral marketing companies like Direct Revenue.”
  • Scores of complaints from users (1, 2, 3 , 4, 5, 6, 7, 8, 9) Direct Revenue staff call one complaining user an “idiot.”
  • Complaints from Direct Revenue’s investors get special handling. One investor worries that another member of his investment firm, former Secretary of the Treasury Bob Rubin, may learn of Direct Revenue’s practices.
  • Reports daily revenue per user at approximately $0.015 (one and one half cents per user per day). (Compare that revenue with the harm caused to users — the amount a typical user would be willing to pay not to have Direct Revenue installed.)

See also others’ analysis of the documents.

I still have a few more documents to post, and I’ll be uploading them later today.

Nonconsensual 180 Installations Continue, Despite 180’s "S3" Screen updated February 24, 2006

On Friday morning (February 17), I received a nonconsensual installation of 180solutions Zango software through a security exploit. I was browsing an ordinary commercial web site, when I got a popup from exitexchange.com (a major US ad network, with headquarters in Portland, Oregon) . The popup sent me to a third-party’s web site. (I’ll call that third party “X” for convenience. Details.) Then X ran a series of exploits to take control of my test PC, including using the widely-reported WMF exploit uncovered last month. Once X took control of my PC, X caused my computer to install and run 180solutions Zango software, among a dozen other programs. Notably, X fully installed 180’s Zango without me taking any action whatsoever — without me clicking “I agree,” “Yes,” “Finish,” or any other button of any kind. X installed 180’s Zango despite 180’s new “S3” protections, intended to block these nonconsensual installations.

Most aspects of this installation are remarkably standard. “Adware” installations through security exploits are all too common. And it’s not that unusual to see traffic flowing through an ad network — even a big US ad network.

But what’s newsworthy here is that 180solutions got installed, even though 180 last year told the world that these nonconsensual installations were impossible. Effective January 1, 2006, all 180solutions distributors were required to switch to 180’s “S3” installer. 180 claimed huge benefits from the new S3 system: 180’s October 2005 press release promised:

“The S3-enabled clients … mean[] 180solutions will own the entire experience from beginning to end on all installations of its products.”

180’s S3 Whitepaper (PDF) also falsely promises major benefits from S3:

“[I]nstallation cannot continue until the user gives consent.”

“Since the consent box comes directly from 180solutions, publishers are unable to turn it off.”

To the contrary, my video shows installation continuing even when a user does not consent. And my video shows a distributor faking a user’s click on the consent button.

See video of the nonconsensual installation of 180 Zango, including bypassing of the 180 S3 screen. (Note: Video has been edited to hide the identity of the installer at issue. Learn why. Within the video, yellow markup provides my comments and analysis.)

180’s S3 Technology and Its Design Flaws


180's S3 installation system180’s S3 installation system

Historically, 180’s installer programs have installed 180 software immediately, on the misguided assumption that 180’s distributors already obtained user consent. That approach is overly optimistic because 180’s distributors have no incentive to ask users’ permission: If distributors seek users’ permission, users might decline that unwanted offer, preventing distributors from getting paid by 180. So it comes as no surprise that many distributors have installed 180 without obtaining users’ consent. I have publicly posted at least five different videos showing such installations (1, 2, 3, 4, 5), and I have many more on file. Others have repeatedly found the same (1, 2, 3, 4, 5).

180’s S3 system seeks to address these nonconsensual installations by showing users a notice screen before 180solutions software installs onto their PCs. 180’s distributors are now supposed to run 180’s “stub” installer to display this notice screen; then users can choose whether or not to proceed. See example screen at right.

As a threshold matter, I don’t think 180’s S3 screen provides an accurate, truthful, complete disclosure of 180’s important effects. As I explained last month, the S3 screen oddly describes 180 only as showing “ads,” without mentioning that these ads appear in “pop-ups” — the essential characteristic reasonable users most need to know in order to decide whether they want 180’s software. The S3 screen also fails to describe the important privacy effects of installing 180’s software — that 180’s software will tell 180’s servers many of the sites users visit. The S3 screen does show a EULA — but it’s in an oddly-shaped box, and its text can’t be copied to the clipboard. Finally, the S3 screen labels its affirmative button “Finish” — even though the S3 screen is known to appear in circumstances where it is the first screen mentioning installation of 180’s software. A user cannot be asked to “finish” what he has not yet agreed to start; an “I agree” or “I accept” label would more clearly indicating the consent that the button is claimed to grant.

But beyond these important problems of wording and layout, the S3 installer also features a fundamental design flaw: Self-interested installers can easily bypass the S3 prompt. Installers can easily fake a click on the “Finish” button — just by simulating a single stroke of the “enter” key, or by simulating a click on a predictable button location. So faking a user’s consent is trivial — just a single Windows SendKeys API call.

Sure enough, my “X” installation reflects an installer using exactly these methods. In my video of X’s exploit-based installation of 180, the S3 notice was visible on screen for less than half a second — between 19.08 seconds and 19.57 seconds into the video. During that half-second, exploit-delivered software (installed on my test PC mere seconds before) pressed “Finish,” at which point 180 completed its installation, putting itself in my System Tray (next to the Windows clock), beginning to download its supplemental files, and beginning to monitor my web browsing.

180’s Bad Partners and 180’s Flawed Business Model

180 seems to intend its S3 installer to protect 180 and users from the untrustworthiness of 180’s distribution partners. 180 is right to think that S3 makes it somewhat harder for distributors to install 180 without getting users’ consent. But the increase in difficulty isn’t much — certainly not enough to deter any serious installer. Those who want to get paid for installing 180 will find that S3 presents at most a small speedbump; it’s hardly the airtight blockade 180’s press release claims.

For 180, the appropriate response to nonconsensual installations is not merely a small improvement in installer program design. Rather, 180 should rethink its entire distribution business model. 180 has repeatedly written about the “long tail” of distributors (1, 2, 3) — 180’s plan for thousands of different web sites installing 180’s software when users browse their materials, and thousands of different programs bundling 180. It’s an interesting vision, but in my view impractical and unwise. With so many distributors, 180 will be unable to assure that each distributor really does obtain consent — rather than cheating the system, as X did.

180’s October press release correctly describes the serious harms that occur when users receive many advertising programs. “A myriad of unwanted software … can often negatively impact system performance,” 180 admitted. But 180 then claimed that S3 would keep 180 out of such bundles. I disagree. According to my records, the installation at issue also installed Ad-w-a-r-e, Adservs, Integrated Search Technologies, Internet Optimizer, Media Tickets, New.net, Quicklinks, Surfsidekick, Tagasaurus, Targetsaver, Toolbar888, Ucmore, Webhancer, Web Nexus, WinFixer, and more. These many programs collectively bombarded my test PC with an incredible 730 registry keys, 1194 registry values, 461 files, and 43 file folders. Worse, the newly-installed programs caused 61 processes to run on my test PC, via 24 EXEs set to load each time I turned on my computer. The programs even added three different toolbars to my web browser. This overwhelming burden made it difficult even to inventory and track the programs’ additions and effects. So many co-bundled programs hardly satisfy the “prevent[ing] customers … from receiving a myriad of unwanted software” promise in 180’s press release.

Why “X” and an Obscured Video?

Long-time visitors to my web site may reasonably wonder: Why the markings in my screen-capture video? And why refer to the 180 distributor as “X,” rather than by its actual name and URL? After all, I’ve long provided video proof of my observations, and I’ve been naming names ever since my 2003 listing of advertisers using Gator (now Claria).

But I’ve run out of patience for being outside quality control staff for 180solutions. An episode last month was particularly instructive: Security company FaceTime found an AOL Instant Messenger worm that was installing 180solutions. 180’s response? After FaceTime reported the details, 180 trivialized the finding and issued a self-serving press release. Rather than admit that their software still becomes installed improperly, 180 danced around the issue and tried to use these wrongful installations to obtain a public relations benefit.

CDT‘s experience with 180 is similarly instructive. After two years of alerting 180solutions to its various bad practices, CDT recently ceased working with 180, instead electing to file a complaint with the FTC.

I too have decided no longer to share my work with 180solutions. As discussed in the preceding section, I have concluded that 180’s business model is fundamentally broken — that 180 cannot implement technology or enforcement to assure the proper installation of its software. Accordingly, just as CDT terminated its discussions with 180, I have resolved not to tell 180solutions which specific distributor was responsible for this installation.

Despite my decision not to work with 180 on resolving these installations, I will make my research available to those with a legitimate need to know. I expect to provide (and in some cases already have provided) this information to law enforcement officials considering action against 180solutions, to private attorneys in litigation against 180solutions, to members of the press seeking to verify my findings, and to other security researchers. Please contact me to request the original raw video file. As usual, I also retain full packet logs, raw screen-captures, registry change logs, filesystem change logs, HijackThis logs, Ad-Aware logs, and additional records.

Update (February 24): My Response to 180’s Press Release

180solutions has found and terminated the distributor I described above, which I’m now happy to reveal was crosskirknet.com. But what a road to get there! 180’s press release suggests 180 figured this all out within hours of my initial post. I’m convinced that that’s false. First, 180 terminated some other bad installer — only later realizing that the installer I found was someone different. Sunbelt has the details — how we figured out (and proved) that 180 hadn’t cut off this installer when 180 issued the press release saying they had. In a blog post, 180 now admits that we’re right and their press release was wrong. (Of course the right response to a false statement in a press release is a correction press release, not a mere blog post. Otherwise, many readers might get the press release, e.g. via the news wire, but never see the blog post.).

180’s press release claims that S3 “enabled the company to go back and re-message every user who received its software [from this nonconsensual installer] and provide them a one-click uninstall.” 180’s blog says the same: “We re-messaged each of [these] installs and provided … a one-click uninstall of our software.” In both documents, 180 writes in the past tense (“enabled”, “re-messaged”, “provided” ), seemingly indicating that these re-notifications have already occurred. But I have yet to receive any such prompt, despite substantial efforts to seek it out (e.g. by repeatedly restarting my test PC). I’ve also received many 180solutions ads on my infected test PC, despite 180’s claim that it “shut off all advertisements to all installs” from this distributor. So here too, I think 180’s statements are off-base. 180 may intend or aspire to provide renotifications, and 180 may intend to shut off ads. But by all indications, 180 hasn’t actually done so, at least not yet. I’ve confirmed my findings with Sunbelt; they haven’t seen this re-notification either, and they’re still getting ads too.

180’s press release quotes 180’s CEO as saying “No software is ever hack-proof.” I agree. But 180 has previously made public statements falsely indicating that its software is not susceptible to those who want to install 180 without consent. Recall 180’s S3 Whitepaper (PDF), explicitly stating “[I]nstallation cannot continue until the user gives consent” and “Publishers are unable to turn [the consent screen] off” (emphasis added). These are not claims of mere hopes or aspirations. No, 180 promised that installation “cannot” proceed without consent. But now that I’ve disproven 180’s claim, 180 tries to backpeddle and to weaken its unambiguous statement. The better approach would be to admit that 180’s prior promises went too far, and that 180’s software cannot actually deliver the benefits 180 previously described.

180’s press release concludes with a section 180 labels “a call for ‘responsible disclosure’.” Citing practice among those who find security vulnerabilities in widely-deployed software, 180 says researchers should tell 180 when they find nonconsensual installations of its software, rather than keep this information to themselves or provide it to law enforcement. I understand that 180 would like to receive this information, and I do follow responsible disclosure principles when I find software vulnerabilities. But responsible disclosure principles just don’t apply to records of nonconsensual installations.

Responsible disclosure principles seek to prevent hackers from taking advantage of newly-uncovered security vulnerabilities. If hackers learned about vulnerabilities before software vendors had time to prepare patches, users would face increased security risks, with few good options for protection. So responsible disclosure principles have a clear purpose and a clear benefit to users — which is why I followed these principles when I previously found vulnerabilities in widely-deployed software.

But what I uncovered, above, is not a security vulnerability. I didn’t find a new security hole, or a new way to take advantage of some existing hole. All I found was some bad guy who’s already using these methods — and who 180 has been prepared to pay for his efforts. There’s no heightened risk of harm to users from my reporting what’s already happening. Perhaps this particular bad actor got to continue his scheme for a few more days while 180 struggled to figure out who was responsible. But that’s the entire harm that resulted from my refusal to tell 180 what happened — that’s the usual, background, ongoing risk of harm; it’s not a heightened risk created by my disclosure itself. When I posted information about these nonconsensual 180 installs, I didn’t put users at special risk of any worm or exploit, in the way that responsible disclosure principles intend to prevent.

So where does this leave us? 180’s S3 system is still broken in all the ways I initially set out. 180’s press release made claims that can be shown to be false, as did 180’s prior statements of S3’s benefits, but 180 has not properly retracted its false statements. And 180’s analogies don’t add up. I’d still like to see 180 spend more time improving its practices, and less time on premature press releases and public relations.

Thanks to TechSmith for providing me with a complimentary license of its Camtasia Studio, the video annotation software I used to mark up my screen-capture video of this installation.