Government slaps $413,000 fine on adult Website e-mail operation

X-rated Web site operator Cyberheat today felt the slap of the FTC and the Department of Justice by agreeing to pay a $413,000 civil penalty for paying partners who used illegal e-mail to drive customers to its Web sites. 

While Cyberheat did not send e-mail directly to consumers, they operated an “affiliate marketing” program in which they paid others who used spam to drive traffic to Cyberheat’s Web sites. The government’s complaint alleged that under the CAN-SPAM Act, the defendant is liable for the illegal spam sent by its affiliates because the defendant induced them to send it by offering to pay those who successfully attracted subscriber to its Web sites. 

In 2005, the FTC cracked down on seven companies that illegally exposed unwitting consumers, including children, to graphic sexual content, in violation of federal laws. Five of those cases were previously settled and included: BangBros.com Inc., paid $650,000 in civil penalties; MD Media, paid $238,743; APC Entertainment, Inc., paid $220,000; and Pure Marketing Solutions, LLC, and Internet Matrix Technology together paid $50,000. The settlements contain record-keeping provisions to allow the FTC to monitor the defendants’ compliance with the orders.  

The settlement announced today with Cyberheat, ends the litigation in that case, and brings the total combined civil penalty amount in these cases to over $1.6 million, the FTC said.

 The FTC’s Adult Labeling Rule and the CAN-SPAM Act require commercial e-mailers of sexually-explicit material to use the phrase “SEXUALLY EXPLICIT: ” in the subject line of the e-mail message and to ensure that the initially viewable area of the message does not contain graphic sexual images.

The Rule and the Act also require that unsolicited commercial e-mail contain an opportunity for consumers to opt out of receiving future e-mail and provide a postal address, among other things. The FTC charged that the affiliate marketers sent sexually-explicit e-mail messages that: violated the Adult Labeling Rule requirements;  volated the requirement to provide a clear and conspicuous opt-out mechanism; and violated the requirement to provide a postal address. 

 The FTC recently settled federal charges against AdultFriendFinder.com saying the organization can no longer pelt unwitting consumers with sexually explicit pop-up ads.  AdultFriendFinder.com, which touts itself as “The World’s Largest Sex & Swingers Personal Community,” and its affiliates use pop-up ads to drive traffic to its Web sites.

Some of the ads have included graphic depictions of sexual behavior, exposing consumers, including children, to sexually explicit images. Such ads were displayed to consumers who were searching online using terms such as “flowers,” “travel,” and “vacations.” In some cases, defendant’s sexually explicit ads were distributed using spyware and adware.   

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