Five of the firms have settled with the FTC, agreeing to pay a
combined fine of $1.159 million, while legal actions have been
filed against the remaining three companies, seeking civil
penalties and a permanent bar on the illegal marketing.
“This x-rated email is electronic flashing,” said Lydia Parnes,
Director of the Bureau of Consumer Protection. “It exposes kids and
other unwary consumers to graphic sexual content, and it is
unwanted, offensive, and illegal.”
“The Adult Labeling Rule was designed to
protect consumers who don’t want to be exposed to random assaults
of sexual material and others, like kids, for whom it is
inappropriate. It’s the law, and we intend to enforce it,” she
added.
The FTC’s Adult Labeling Rule was brought in under the
Controlling the Assault of Non-Solicited Pornography and Marketing
Act (the CAN-SPAM Act) to target sexually orientated spam. The Rule
requires the warning "SEXUALLY-EXPLICIT:" to be included both in
the subject line of any email message that contains sexually
oriented material, and in the electronic equivalent of a "brown
paper wrapper" in the body of the message.
The Rule and the Act also require that unsolicited commercial
email contain an opportunity for consumers to opt-out of receiving
future email and provide a postal address, among other things.
According to the FTC, the companies sent sexually explicit email
messages that breached the Adult Labeling Rule requirements and did
not provide a clear opt-out mechanism or postal address.
The defendants did not send email directly to consumers; rather,
they operated affiliate marketing programmes in which they paid
others to send spam on their behalf. Under the CAN-SPAM Act, the
defendants are liable for the illegal spam sent by their affiliates
because the defendants “initiated” the email by paying others to
send it on their behalf.
Five of the firms have agreed settlements with the FTC, barring
future violations of the Act and the Rule. The settlements also
require that the defendants closely monitor the practices of their
affiliate marketers to ensure that they are not violating the
law.
BangBros.com, based in Florida, will pay $650,000 in civil
penalties; MD Media, a Michigan corporation, will pay $238,743; APC
Entertainment, a Florida corporation, will pay $220,000; and Pure
Marketing Solutions, another Florida company, and Internet Matrix
Technology of Louisiana, will together pay $50,000. The settlements
contain record-keeping provisions to allow the FTC to monitor the
defendants’ compliance with the orders.
In addition to the settlements, at the request of the FTC, the
Department of Justice has filed a lawsuit against TJ Web
Productions, a Nevada company; Cyberheat, an Arizona Corporation;
and Impulse Media, a Washington corporation.
The FTC said that Microsoft provided technical assistance in the
investigation of the cases.
