WASHINGTON — The Federal Trade Commission's move this week to formally charge the operators of Jerk.com with alleged deceptive trade practices involving improperly obtained profiles signals the beginning of a new focus for the agency.
The FTC said in a federal complaint that Jerk.com misled users when it claimed the content on the site had been created by users. In fact, regulators said, most of the site’s content was harvested from Facebook.
For the online adult industry, news of the FTC's charges against Jerk.com could put a cautionary spin on practices made by certain sectors, particularly the dating space.
"I think that this is a test run for the FTC and the beginning of what could easily be more to come as business model’s like Jerk.com’s affect consumer confidence," said Jason Tucker, a longtime adult industry observer who operates BattleshipStance.com, an intellectual property management company.
"I believe that there are a fair number of dating sites with purchased databases littered with fake profiles," Tucker told XBIZ. "If you are running one of these sites, it is time to clean house."
Jerk.com profiles included ways for site users to: vote on whether a person was a “jerk” or not; enter personal information about the individual; and post comments about the person.
The site, operated by Napster cofounder John Fanning, also incorporated a section so that people could pay $30 to revise their online profiles.
"It appears that Jerk.com breeds fear, have questionable billing practices, condone extortion, and injure legitimate sites," Tucker said. "Sites that conduct business like this only hurt the online industry at large. This was a topic at the recent Phoenix Forum, dating sites could be next on the FTC hit list."
Adult industry attorney Lawrence Walters of Walters Law Group said he wasn't surprised of the charges levied against Jerk.com's operators because he's noticed that the FTC is becoming much more active in pursuing deceptive trade practices claims against social-networking website operators.
This week's Jerk.com complaint only confirms that the FTC is focused on enforcing policies and federal law designed to stop consumers from being cheated, he said.
"The alleged violations by Jerk.com are reminiscent of the ‘revenge porn’ scam, where nude photos are posted with identifying information, but can be removed for a fee," Walters told XBIZ. "This is just a new take on the old extortion racket, and the authorities have wised up to the practice."
Walters said that he's aware that the FTC is looking closely at the misuse of profiles on social-networking sites, in general, because the FTC announced its belief that practice of creating fake, host-generated, or "virtual" user profiles on dating sites is deceptive and unfair.
"So dating sites — whether mainstream or adult — have been put on notice of the FTC’s view of this business practice," Walters said. "The key to any of these trade practices issues is disclosure, and the more transparent the website operator is in telling the customer how it operates, the less likely it will attract the attention of the FTC. A problem results when social networking sites use, or misuse, profiles in a way that misleads users as to their true nature without conspicuous disclosure.
"While the allegations against Jerk.com appear to involve a fairly obvious scam, the legal issues with dating site profiles are less clear. Since some dating sites share profiles, license profiles, and generate their own profiles, extreme care should be taken to become aware of the FTC’s policies, rulings and positions regarding the legality of these practices."
An evidentiary hearing on charges against Jerk.com is scheduled to begin before an administrative law judge at the FTC on Jan. 27.
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