Wednesday, December 12, 2007

Web Site Operator Agrees to Settle FTC Charges Based on Sexually-Explicit Pop-Up Ads

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

The operator of a Web site that touts itself as "the World's Largest Sex & Swingers Personal Community" has agreed to settle FTC charges that it engaged in unfair practices by foisting unsolicited sexually-explicit marketing materials—including, but not limited to, online pop-up advertisements—on unwitting consumers.

According to the FTC, the Web site operator and its affiliates used pop-up ads to drive traffic to Web sites that offer consumers the opportunity to access other members’ sexually-oriented personal files, photographs, and Web cam videos, as well as a live video chat site. The agency alleged that the practice of displaying graphic pop-up ads without consumer consent was unfair in violation of Sec. 5 of the FTC Act.

Under the terms of a proposed consent decree, awaiting approval in the federal district court in San Jose, California, the Web site operator would be prohibited from displaying sexually-explicit online ads to consumers who are not seeking out sexually-explicit content.

The proposed consent decree would require the defendant to take steps to ensure that its affiliates comply with the restriction and would require the defendant to end its relationship with any affiliates who do not comply. It also would require the defendant to establish an Internet-based mechanism for consumers to submit complaints. The proposed settlement would impose bookkeeping and record-keeping requirements that would allow the Commission to monitor compliance.

The complaint and stipulated final order for a permanent injunction is FTC v. Various, Inc., FTC File No. 072-3000, December 6, 2007. Further details appear at CCH Trade Regulation Reporter ¶16,083 and here on FTC web site.

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