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There is an item in Direct Magazine, “What the Cyberheat Settlement Means to You,” about a recent $400,000-plus settlement between online pornographer Cyberheat and the Federal Trade Commission.
The long and short is that Cyberheat and the FTC settled on the monetary penalty and some new restrictions on their affiliate program after Cyberheat affiliates violated Can-Spam.
Besides agreeing to pay the relatively small amount of $413,000, Cyberheat also agreed 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.
Besides being highly restrictive to Cyberheat’s affiliate program, this settlement also places more responsibility on marketers overall to monitor their affiliates for spamming, according to Hughes.
Two things here - one, it is great to see that Can-Spam was used to penalize, however nominally for such a lucrative business, Cyberheat.
But two, is that really so “highly restrictive”?
Back when Can-Spam came into being, I was managing the ClubMom affiliate program and we immediately implemented a very similar list for affiliates sending email, and we got set up with UnsubCentral to manage suppression list distribution.
People are still allowing affiliates to spam four years later and this is all they get? Come on, FTC - hit them harder!
8 responses so far ↓
1 Anne P. Mitchell, Esq. // Mar 12, 2008 at 10:35 am
Shawn,
As the person who primarily authored the language of CAN-SPAM’s affiliate clause (officially referred to as the McCain Amendment, as it was his office that added it to CAN-SPAM), I agree with you 100%. I’m so glad to see it being used, but that amendment has teeth - I wish they’d use them to bite!
We here at ISIPP refer to that portion of CAN-SPAM as the ‘vendor / sender’ clause, because it puts the vendor (the entity whose product is being hawked by affiliates, or who otherwise stands to *gain* by the actions of the affilliates) just as much on the hook as the senders (the affliates).
[Trivia: It may interest you to know that we wrote that amendment with a particular affiliate program in mind - one that used to be particularly egregious - I won't mention any names, but they have been around forever, hawk 'high end' coffee, and their name rhymes with Zevalia.]
But my primary unhappiness with it is that the Federal legislators , in their infinite wisdom (sarcasm here), reserved the McCain amendment portion of CAN-SPAM for use *only* by the FTC, other Federal agencies , and state attorney generals, even though much of CAN-SPAM can be used by ISPs (and even savvy server-owning individuals who know how to meet the definition of service provider under which CAN-SPAM operates) to sue spammers.
The one aspect with the best chance of success, and they take it away from those who not only have the greatest interest in seeing these rogue affiliates brought to justice (i.e. the victims of the spam, such as the ISPs and their users), but those who have the time and inclination to actually do the research, figure out who the affiliates are, and file the lawsuits.
Of course, *all* that said, you *never* get to *really* hit them where it hurts. When I was CEO over at Habeas, we sued an anonymous affiliate - successfully - by first going after the affiliate program manager, and squeezing them until they gave up the affilate. But, of course, we spent tens of thousands of dollars, and never saw a dime back from the judgement.
Finally, if any of your own affiliates or readers would like a complimentary copy of our “CAN-SPAM and You: Emailing Under the Law”, just have them drop me a line, and be sure they say that you sent them. You know that I have only the highest regard for you, Shawn - you’re one of the good guys!
Anne
Anne P. Mitchell, Esq
CEO/President
Institute for Spam and Internet Public Policy
http://www.ISIPP.com/
Professor of Law, Lincoln Law School of SJ
Author, “The Email Deliverability Handbook”
2 Aaron at FullTiltBlogging.com // Mar 12, 2008 at 11:43 am
Shawn,
Great commentary on the decision.
How do you see the future of the affiliate manager/affiliates relationship changing? It seems to me most of the affiliate programs I am a part of pretty much don’t do any type of supervision until they get a complaint, despite their cries to “limit affiliate spam.”
What do you think?
3 Shawn Collins // Mar 12, 2008 at 11:53 am
Thanks a lot, Anne - interesting back story information there.
4 Shawn Collins // Mar 12, 2008 at 11:56 am
Hi Aaron -
It sort of amazes me that the affiliate manager/affiliate relationships have yet to change in a lot of instances.
As Anne mentioned above, “I’m so glad to see it being used, but that amendment has teeth - I wish they’d use them to bite! ”
I agree and I imagine that companies who aren’t proactive about adherence to Can-Spam are acting in that way, because they figure they will make as much money as they can until they are slapped on the wrist.
5 Aaron at FullTiltBlogging.com // Mar 12, 2008 at 12:29 pm
Thanks for the quick reply.
Back when CAN-SPAM was implemented I sent a PDF to all my affiliates about how easy it is to be CAN-SPAM compliant. Still I worried about what might happen if they didn’t comply, many of them were newbies operating on bad information.
Eventually I sold my business and now I let other people handle my affiliate program.
6 Shawn Collins // Mar 12, 2008 at 12:58 pm
If anybody is looking for the ClubMom affiliate email agreement from back then, I’ve located it and thrown it up on my server to download.
7 Anne P. Mitchell, Esq. // Mar 12, 2008 at 1:03 pm
Ooh..I didn’t know that you could do links like that - Sean - I hope you don’t mind!… our “CAN-SPAM and You” ebook is at:
http://isipp.com/publications.php
Again, if you are coming from Shawn’s forum, drop us a line, and we’ll comp you a copy.
Anne
Anne P. Mitchell, Esq
CEO/President
Institute for Spam and Internet Public Policy
http://www.ISIPP.com/
Professor of Law, Lincoln Law School of SJ
Author, “The Email Deliverability Handbook”
8 People in Seattle Love Affiliate Porno Spam | Affiliate Marketing Blog by Shawn Collins // Mar 26, 2008 at 9:30 am
[...] by e-mail.Just a couple weeks ago, there was a $400,000-plus settlement between online pornographer Cyberheat and the Federal Trade Commission over CAN-SPAM violations. But the FTC lost a similar case this past Monday, according to Direct [...]
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