FTC Shuts Down Las Vegas Porn Operation for Spam

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The Federal Trade Commission said yesterday that it temporarily shut down a Las Vegas pornography operation that sent hundreds of thousands of sexually explicit e-mail messages. This is the first case of federal spam laws being used against sex marketers.


The operation, which ran up to 20 Web sites, did not properly label its e-mail with a "SEXUALLY-EXPLICIT:" tag and violated several other aspects of a year-old anti-spam law, the FTC said. According to the FTC, six businesses and five men have had their assets temporarily frozen by a Las Vegas federal court and are prohibited from sending any deceptive spam as the case proceeds.


The defendants included explicit content in their messages, did not label them properly, did not label them as advertisements and did not provide a way for consumers to stop getting them, all violations of the CAN-SPAM Act, the FTC said.


The FTC's complaint names: Global Net Solutions, Las Vegas; Global Net Ventures Ltd., London; Wedlake Ltd., allegedly based in Riga, Latvia; Open Space Enterprises Inc., Las Vegas; Southlake Group Inc., Las Vegas; WTFRC Inc., doing business as Reflected Networks Inc., Las Vegas; Dustin Hamilton; Tobin Banks; Gregory Hamilton; Philip Doroff; and Paul Rose.


The case marks the first FTC action against adult-oriented spammers under the CAN-SPAM Act's requirement that sexually explicit commercial e-mail include the words "SEXUALLY-EXPLICIT" in the subject line. The FTC has described the requirement as "the electronic equivalent of a brown paper wrapper" used for pornographic magazines delivered by postal mail.


Despite citing the labeling rule in its case, the FTC charged the defendants with violating numerous CAN-SPAM requirements, including false transmission information; deceptive subject lines; no working unsubscribe function; and no physical address. The CAN-SPAM Act allows for harsher penalties against sexually explicit unsolicited commercial e-mail.


Pornography has lost its place as the most prominent spam message, according to AOL's 2004 spam roundup. The Internet's largest e-mail provider reported that pornography spam, while still prevalent, was joined by an increasing number of messages tied to identity theft scams.


Brian Morrissey covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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