TUCSON, Ariz. - Cyberheat has been ordered to pay a $413,000 civil penalty under a settlement reached with the Federal Trade Commission and the Department of Justice.
The settlement also requires Cyberheat to closely monitor its affiliates to ensure that they are complying with the law and bars the company from future violations of the CAN-SPAM Act and Adult Labeling Rule.
Cyberheat paid affiliates who used illegal email to drive customers to their websites.
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.
The settlement announced Tuesday ended litigation in Cyberheat's case, bringing the combined civil penalty in these cases to more than $1.6 million.
The CAN-SPAM Act and the FTC's Adult Labeling Rule require commercial senders of sexually explicit material to include "SEXUALLY EXPLICIT:" in the subject line of the email message and ensure that the initially viewable area of the message does not contain graphic sexual images. They also require unsolicited commercial email to provide a way to opt out of receiving future email and provide a postal address, among other requirements.
The FTC charged that Cyberheat affiliate marketers sent sexually explicit email messages that violated the Adult Labeling Rule, the requirement to provide a clear and conspicuous opt-out mechanism and the requirement to provide a postal address.
While Cyberheat did not send email directly to consumers, it operated an affiliate marketing program in which it paid others who used spam to drive traffic to Cyberheat's websites. The government's complaint alleged that under the CAN-SPAM Act, Cyberheat is liable for illegal spam sent by its affiliates.
The FTC voted 5-0 to accept the settlement.
The Department of Justice, which conducted the litigation at the request of the FTC, filed the proposed consent judgment Tuesday in the United States District Court for the District of Arizona. The proposed consent judgment is subject to court approval.
A statement from Cyberheat is forthcoming.
Â
