FTC Says Sites Are Responsible for Actions of Affiliates

WASHINGTON — A settlement has been reached in the case of several adult companies and their affiliates that were charged in January with violations of the Can-Spam Act. In settling the case, the Federal Trade Commission has sent a warning to affiliate program operators to make sure that they closely monitor the email activities of their affiliates.

According to a press release issued today by the FTC, the defendants have paid a combined $621,000 to settle charges that their practices violated federal laws. The FTC pointed out that the settlement did not constitute an admission of guilt by the defendants.

While an affiliate sent most of the emails that brought the action against the companies, the FTC reiterated that under the Can-Spam Act, all programs being promoted by the affiliate were held responsible for the emails.

In addition to levying fines against the defendants, the court’s settlement order requires that they include in all commercial emails a working opt-out mechanism, notice that the emails are advertisements and a physical postal address.

Of particular interest is an affiliate monitoring requirement that said the defendants — and presumably all affiliate program operators going forward — must collect certain required information about email campaigns, as well as identification information about the affiliates, before they can begin a campaign. Once e-mails are sent, the defendants are required to survey new subscribers to their sites to make sure affiliates are following the rules set forth in the order.

Defendants in the case included Las Vegas-based companies Global Net Solutions, Open Space Enterprises, Reflected Networks and Southlake Group, as well as London-based Global Net Ventures and Latvia-based corporation Wedlake. Also named in the suit were Dustin Hamilton, an officer of GNS, director of GNV and officer of Reflected Networks; Tobin Banks, a director of Open Space; Gregory Hamilton, an officer and director of Southlake; Philip Doroff, an officer of Reflected Networks; and Paul Rose, an independent operator who allegedly sent several email messages promoting the GNS defendants’ websites.

The FTC had charged that the emails violated the Can-Spam Act and the FTC’s Adult Labeling Rule by failing to include the required label for sexually explicit content; displaying sexually explicit content in the email itself; using misleading header information; using misleading subject lines; failing to include the required opt-out notice; failing to have a functioning opt-out mechanism; failing to identify emails as advertisements or solicitations; and failing to provide a valid physical postal address.

The stipulated order was entered in the U.S. District Court for the District of Nevada on August 5. The default judgment was entered September 8.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Adult Networking Platform SpicyGigs.com Launches

SpicyGigs, a new adult industry networking platform, has officially launched.

Pineapple Support to Host 'Cream Pie Challenge' Fundraiser

Pineapple Support is hosting its Cream Pie Challenge through August to raise funds for mental health services for industry performers.

Kyrgyzstan President Signs Measure Outlawing Internet Porn

President Sadyr Japarov of Kyrgyzstan on Tuesday signed into law legislation outlawing online adult content in the country.

NC Legislature Overrides Veto of Extreme Anti-Adult Industry Bill

The North Carolina state legislature on Tuesday voted to override Gov. Josh Stein’s veto of a bill imposing regulations that industry observers have warned could push adult websites and platforms to ban most creators and content.

Report: VPN Downloads Soar in UK Following Age Verification Deadline

Virtual private network apps, which can be used to circumvent geo-specific age verification requirements, are topping Apple App Store downloads in the U.K. in the wake of new Online Safety Act rules, the BBC is reporting.

Strike 3 Holdings Sues Meta for Pirating Vixen Media Group Content to Train AI

Vixen Media Group owner Strike 3 Holdings filed suit in federal court this week, accusing Facebook parent company Meta of copyright infringement and alleging that Meta has extensively pirated VMG content to train its artificial intelligence models.

Pineapple Support, Streamate to Host 'Navigating Grief and Loss' Support Group

Pineapple Support and Streamate are hosting a free online support group to help performers cope with grief and loss.

Friday is Final AV Compliance Deadline in UK

Friday, July 25 marks U.K. media regulator Ofcom’s deadline for user-to-user services such as tube, cam and fan sites to implement its requisite “highly effective age assurance” measures for preventing minors from viewing adult content.

AEBN Publishes Popular Searches for May, June

AEBN has released the top search terms for the months of May and June from its straight and gay theaters in all 50 states and the District of Columbia.

Ofcom Releases Transparency Reporting Guidelines

Ofcom, the U.K. media regulator, has made public its official guidance detailing how online service providers — including adult sites — will be required to publish annual transparency reports on their efforts to protect children from online harms.

Show More