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March 25th, 2008, 03:23 PM #1Stunner: FTC Loses Affiliate Marketing Case
A jury in Seattle Monday ruled that a pornography marketer was not responsible for spam sent by some affiliates, handing the Federal Trade Commission a stunning defeat.
The jury in U.S. District Court in Seattle unanimously determined in a civil proceeding that Impulse Media Group Inc. was not responsible for hundreds of unsolicited, sexually explicit commercial e-mails sent by some of its affiliates to bring traffic to its sites.
The case, brought under the Can Spam Act, hinged on whether Impulse “initiated” the spam sent by its affiliates.
Impulse Media’s lawyers cited the company’s anti-spam policies and said it terminated relationships with affiliates who broke its rules.
The government argued that affiliates weren’t required to read the agreement and that those who were terminated were able to sign back up.
The FTC brought the case against Impulse Media in 2005. The commission also brought other cases against companies for alleged spamming by their affiliates. Those companies settled.
Earlier this month Cyberheat settled a similar case with the FTC. The porn marketer agree to pay $413,000 and abide by some pretty tight restrictions on its affiliate marketing program including to:
*Contractually require its affiliates to identify any subaffiliates they intend to use.
*Provide each affiliate a copy of the FTC’s order.
*Get a written agreement from each affiliate to comply with the order and the Can Spam Act.
*Contractually require each affiliate that intends to use e-mail marketing to provide Cyberheat the e-mail address from which the campaign will be sent, the subject line, the dates the e-mail will be sent, the e-mail addresses to which the e-mail will be sent, and a certification regarding how the addresses were gathered, all at least seven days before the campaign.
*Review each affiliate’s e-mail campaign for compliance with the Can Spam Act at least three days before the campaign and certify in writing it has done so.
*Require each consumer who signs up for Cyberheat’s services to indicate how they heard of the company. If they heard of it through e-mail, Cyberheat has agreed to monitor the affiliate that sent the e-mail for compliance with Can Spam.
The Cyberheat case was seen by experts as an example of the FTC being increasingly skeptical of marketers claiming they aren’t aware of affiliate spamming.
However, at least one expert believes the Impulse Media ruling may cause the government to be more careful about the cases it brings.
“I think it will be less likely for plaintiffs and the government to bring spam cases based on affiliate conduct unless there’s actually substantial evidence to back up the fact that the marketer knew about the affiliates’ violations,” said Seattle lawyer and Spamnotes blogger Venkat Balasubramani, according to the Seattle Post-Intelligencer.
March 26th, 2008, 12:15 AM #2
- Join Date
- January 18th, 2005
Unless you wrote the story bob, you are stealing someone else's content by posting the complete story here with no link to the source. That sucks.
March 26th, 2008, 11:21 AM #3
"Contractually require its affiliates to identify any subaffiliates they intend to use."
Hmmm, reminds me of some questions I asked of a network recently...
Real transparency, short of the mandate above, is nothing but a cheap, tawdry lie.
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