Laws Of .com

Advertiser May be Held Vicariously Liable Under U.S. Can Spam Act

The U.S. District Court of Arizona has concluded that it is up to a jury to determine whether pornographic website operator Cyberheat, Inc. is vicariously liable for violative sexually explicit spam sent by its advertising affiliates. Citing unanswered material questions of fact regarding the relationship between Cyberheat and its affiliates, the court denied Cyberheat’s summary judgment motion to dismiss a claim for civil penalties under the CAN-SPAM Act. Specifically, the court determined that questions remained unanswered concerning what, if any, control or supervision Cyberheat exerted, or could or should have exerted, as well as what actions Cyberheat took upon receiving knowledge of violations and the reasonableness of its actions.

The Federal Trade Commission (FTC) is seeking civil penalties of up to $11,000.00 for each violation of the CAN-SPAM Act. The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 requires unsolicited commercial email to be labelled, to include instructions for opting out of further emails and to include the sender's physical address. Over 600 violative emails were sent by numerous Cyberheat affiliates. Though the terms and conditions in affiliate agreements forbade such activities, when Cyberheat received notice of affiliate violations, Cyberheat did not follow its own promise to terminate. FTC has obtained settlement payments totalling over $1.1M and undertakings against four other site operations.

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