FTC Brings First Action Resulting from Information-Sharing Powers Under U.S. SAFE WEB Act

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The FTC has filed an action in the federal district court in Chicago seeking to block alleged spam containing false and unsubstantiated claims for hoodia weight-loss products and human growth hormone anti-aging products. The defendants--a marketing company and the company’s principals, as well as a Web site operator--were also charged with violating the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act). The case might sound like a routine FTC enforcement action; however, what makes this case of particular interest is the fact that it is the first action brought by the agency using the U.S. SAFE WEB Act to share information with foreign partners.

Neither the FTC complaint nor the corresponding press release provided detail on the information shared; however the FTC release said that the international enterprise, with defendants in the United States, Canada, and Australia, used spammers to drive traffic to Web sites selling two kinds of pills—one that was supposed to contain hoodia gordonii and cause significant weight loss—and another that was supposed to be a “natural human growth hormone enhancer” that would dramatically reverse the aging process. The FTC’s spam database received over 175,000 spam messages sent on behalf of the operation, according to the agency.

The agency also contends that the defendants violated the CAN-SPAM Act by initiating commercial e-mails that contained false “from” addresses and deceptive subject lines and failing to provide an opt-out link or physical postal address.

U.S. SAFE WEB Act

The U.S. SAFE WEB Act, which was signed into law on December 22, 2006, made a number of amendments and additions to the FTC Act in order to assist the agency in fighting illegal spam, spyware, and cross-border fraud and deception. It allows the FTC to share confidential information and investigative resources with foreign law enforcement officials in consumer protection cases. It confirms the FTC's remedial authority in cross-border cases on behalf of U.S. victims.

LAP-CNSA Meeting

FTC Chair Deborah Platt Majoras announced the action at an international meeting of government authorities and private industry about spam, spyware, and other online threats, held on October 10 in Arlington, Virginia. The meeting was the first time members of the London Action Plan (LAP) and the European Union’s Contact Network of Spam Authorities (CNSA) have come together in the United States. The LAP, created in 2004, is a global network of industry representatives and law enforcement agencies involved in the fight against spam, phishing, and other online threats. The CNSA, which the European Commission created in the same year, is a network of spam enforcement authorities from EU Member States.


Details of Federal Trade Commission v. Spear Systems, Inc., et al., Civil Action No.: 07C-5597; FTC File No.: 072-3050, appear on the FTC’s Web site.