LAS VEGAS, NV – In a press release issued Tuesday, the Federal Trade Commission (FTC) announced that it has arrived at a proposed settlement with the adult internet company TJ Web Productions, stemming from charges against TJ Web in July 2005 asserting that the company had violated the CAN-SPAM Act.Under the proposed settlement, TJ Web, which owns and operates the Adult Pay Master affiliate program, will pay a civil penalty of $465,000, is “permanently restrained and enjoined” from violating either the CAN-SPAM Act or the Adult Labeling Rule, and must comply with a detailed set of compliance monitoring and reporting provisions designed to ensure compliance on the part of both the company and its marketing affiliates.
The FTC agreement with TJ Web is currently a “stipulated final order;” according to the press release issued today, “(A) stipulated final order requires approval by the court and has the force of law when signed by the judge.”
The language of the proposed settlement is nearly identical to that of similar agreements the FTC entered into with adult companies BangBros.com, MD Media, APC Entertainment, Pure Marketing Solutions, and Internet Matrix Technologies.
According to a copy of the proposed settlement posted to the FTC website, TJ Web is required to collect, maintain, and report a wide variety of data from its affiliates in furtherance of complying with the terms of the settlement.
In the section of the proposed settlement entitled “Monitoring By Defendant For Compliance,” the agreement lays out specific guidelines for the future operation of TJ Web’s affiliate program, including requirements that each prospective participant in the program supply “first and last name, physical address, country, telephone number, email address, date of birth, and bank account information… Defendant shall also require from that prospective participant the first and last name, physical address, country, telephone number, email address, and date of birth for the natural person(s) who owns, manages, or controls that prospective participant.”
The agreement further requires that each prospective participant in TJ Web’s affiliate program be provided with a copy of the FTC settlement agreement (or a summary agreed upon by the FTC and counsel for TJ Web), and that TJ Web obtain from each prospective affiliate an “express agreement to comply with this Order and the CAN-SPAM Act.” The agreement in question must be signed and dated, although an “electronic signature” suffices, “provided that the signature would comply with the signature requirements of the Electronic Signatures in Global and National Commerce Act.”
Under the terms of the proposed settlement, TJ Web is also required to “promptly and fully investigate, any information received by Defendant regarding a commercial email message that promotes Defendant’s web site(s)… complaints received from consumers, Internet Service Providers, the Commission or other law enforcement agencies, to determine whether such commercial email message violates a contractual provision of Defendant’s affiliate program, the CAN-SPAM Act, the Adult Labeling Rule, or any provision of this order.”
The settlement also mandates that TJ Web require each new subscriber to any of its websites to “identify the manner in which they were directed to Defendant’s web sites.” If a subscriber indicates that they were referred to the site via a commercial email message, TJ Web is to likewise “promptly and fully investigate” to determine if the email in question was sent in violation of “a contractual provision of the Defendant’s affiliate program, the CAN-SPAM Act, the Adult Labeling Rule” or any provision of TJ Web’s settlement with the FTC.
In addition to the monitoring requirements set forth in the proposed settlement, TJ Web’s agreement with the FTC also contains a variety of “reporting” provisions
Among the terms of the “compliance reporting” section of the settlement is a requirement that, within “One hundred eighty (180) days after the date of entry of this Order, Defendant shall provide a written report to the FTC, sworn to under penalty of perjury, setting forth in detail the manner and form in which the Defendant has complied and is complying with this Order.”
The report in question must include a “list that identifies every person who is marketing or promoting, through commercial email messages, any goods or services of Defendant,” since the entry of the order, as well as a “list of all domain names and web page addresses Defendant has registered or used.”
TJ Web’s settlement with the FTC also requires that the company maintain a detailed set of records demonstrating compliance with the agreement, including a provision that requires records “that reflect, for every written or oral consumer complaint or refund request received by Defendant: (I) the consumer’s name, address, and telephone number; (2) the written complaint or request, if any; (3) the basis of the complaint or request; (4) the nature and result of any investigation conducted concerning the complaint or request; (5) each response and the date of such response to the complaint or request; (6)any final resolution of the complaint or request, and the date of such resolution; and (7) in the event of a denial of any resolution, the reason for the denial.”
In paying its civil penalty, TJ Web must make an “initial payment” of $50,000 within 30 days of the date of entry of the order, after which the company will pay the $415,000 balance in 12 quarterly installments of a little over $34,500.
As noted by the FTC in their press release, the stipulated final judgment does “not constitute an admission by the defendant of a law violation.” Under the agreement, however, TJ Web waives “all rights to appeal or otherwise challenge or contest the validity of” the order.
For more information on the FTC action regarding TJ Web, including the full text of the both the original complaint entered against TJ Web and the proposed settlement, refer to the information posted to the FTC website here: http://www.ftc.gov/os/caselist/0523047/0523047.htm
