If you remember a few months back, Zango (aka 180Solutions and Hotbar) came under a lot of flak when they started aggressively pursuing lawsuits and sending out “notices” to many people. They ended up having the tables turned on them, with lots of bad press and eventually an investigation by the FTC. Those have recently come to a close, and now Zango is being forced to pay a huge $3 Million fine to compensate for “illegally obtained profits”. On top of that, they are being required to change their business model in how they allow their software to be distributed:
According to the terms of the settlement announced Friday, Zango's principals--co-founders Keith Smith and Daniel Todd--must pay $3 million to cover illegally obtained profits. Additionally, the company must adhere to FTC regulations that bar it from loading programs onto customers' computers and monitoring them without their consent. The programs also must include a feature that allows customers to uninstall the software easily.
The FTC's claim was nothing surprising. They said that Zango was using security vulnerabilities to force secret installs on people's computers of various software. While Zango maintained the entire time that it was “rogue” third party distributors, the FTC was not swayed.
Now we must wonder if this will actually have any effect on their business. When your primary method of distribution is exploiting security holes and preventing uninstalls, how exactly do you convince people that you are the good guys?