FTC Spam Settlement Includes Tough Affiliate Rules
Four people operating adult Web sites and an affiliate e-mail marketer for those sits have paid $621,000 to settle a Federal Trade commission (FTC) spamming complaint. Operating restrictions included as part of the settlement reinforce the FTC’s view that companies may be held responsible for the actions of their affiliates.
The defendants control a network of businesses that operate pornographic Web sites; the affiliate marketed access to that content on their behalf via e-mail. The FTC filed suit in January 2005, charging that the marketing e-mail violated the Can-Spam Act and the Adult Labeling Rule by failing to label adult material, using misleading header information and subject lines, and not providing an opt-out notice.
The settlement, affirmed last week by a U.S. District Court in Nevada, requires the porn Web sites to monitor their affiliates to make sure they comply with the law. The companies will have to keep detailed records on their affiliate marketers, obtaining a name, address and working phone number for affiliates and sub-affiliates that market their content. They must also collect information about any e-mail campaigns planned on their behalf. Affiliates must certify how they obtained the e-mail addresses on their lists, one week before launching any e-mail campaign for the companies
Once the e-mail messages are sent, the defendants are required to sample new Web subscribers to make sure the affiliates are complying with the settlement order. The defendant Web companies are also required to establish a system to gather and respond to consumer complaints.
“The settlement will bar future violations and will require the marketers to monitor their affiliates to assure they are complying with federal laws, as well,” the FTC noted in a statement. “While the affiliate sent many of the e-mails that allegedly violated federal law, under the CAN-SPAM Act all of the defendants are responsible for the e-mails, including the defendants who paid others to send the e-mails on their behalf.”
