Life Online

In a case that surprised most of us in affiliate marketing, Impulse Media, an adult website company with an affiliate program, was not found to be responsible for unsolicited, sexually explicit e-mails sent out by its affiliates.

Taking aside the adult nature of the website and emails, the case came down to whether a company was responsible under the CAN-SPAM Act for the acts of its affiliates where such acts violated the terms and conditions set out between the company and its affiliates. The government set out in its pleadings that Impulse Media “induced” the spammers to send out the emails and was an “initiator” under CAN-SPAM. One interesting argument was that “because [Impulse Media’s] web sites [were] being advertised or promoted by such messages, [Impulse Media was] also a sender” as defined by CAN-SPAM. Most merchants and affiliates believe that the merchant is responsible in a case like this. In fact, other companies sued by the Federal Trade Commission at the same time as Impulse Media actually settled their cases.

Seattlepi.com reported that the defense argued that if only a small number of the affiliates engaged in the illegal actions, Impulse Media must not have been encouraging the actions. The president of Impulse stated in his Declaration that promotional materials were not intended to be used via e-mail. Obviously, the jury bought it. That or they couldn’t really understand affiliate marketing.

What I find most shocking about this case is that as a laywer, you are taught to look for the “sympathetic plaintiff.” That means when you file a case, you want the victim to look morally right and the defendant to look like a big bad guy. In the realm of spam, you won’t find a defendant that looks dirtier than someone who sends out sexually explicit pictures to unsuspecting email readers (as close as you get to “plaintiffs” in a case filed by the government). And yet that’s exactly what was at issue in this case. If a porn spamming merchant can’t be held responsible for its affiliates, who would?? Shawn Collins weighs in that this case allows advertisers to just claim ignorance while they turn their heads.

There are so many unanswered questions that come out of this case. How instrumental can Microsoft be in spam cases? Do merchants need to approve emails before affiliates send them out? What happens if affiliates who are banned continue to be allowed back into a program? If a merchant simply limits their campaigns to web and search, do they avoid liability if their links are sent by email? Or will this case turn out to be so fact specific that it will not have much precedential effect except in discouraging the FTC from going after merchants in the future? We’ll be watching.