According to the FTC, the defendants – a network of six corporations, one of them British, and five named individuals – use spam to sell access to on-line porn.
Four of the individuals control a network of corporations responsible for adult web sites, payment systems, and servers used to distribute and to sell sexually explicit content. The network also markets its sexually explicit content through an affiliate programme that pays commissions to third parties who drive traffic to the network's web sites.
"In all instances," says the complaint, "and there have been hundreds of thousands, defendants have violated the laws enforced by the FTC and barraged consumers with unwanted e-mail that consumers are powerless to prevent."
Filing suit on 3rd January, the FTC made its first use of rules brought in under the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the CAN-SPAM Act) to target sexually-orientated spam.
The rules require the warning "SEXUALLY-EXPLICIT:" to be included both in the subject line of any e-mail message that contains sexually oriented material, and in the electronic equivalent of a "brown paper wrapper" in the body of the message. They also allow action to be taken not just against spammers, but against those persons instructing the spammers.
According to the complaint, the defendants did not include the required warning in the subject line of their messages, or failed to exclude the sexually oriented material from the initially viewable content of the messages, in breach of the Adult Labelling Rule.
The defendants also failed to identify clearly all of their messages as advertisements, instead misrepresenting, in some instances, that their services were free. The complaint also says that consumers were unable to stop the unwanted e-mail messages because the defendants did not provide the required "opt-out" notice – another breach of the CAN-SPAM Act.
On 5th January the FTC was awarded a temporary injunction against the defendants by a federal court in Las Vegas, freezing the assets of the defendants and prohibiting them from engaging in the spamming operation. The FTC is now seeking a permanent injunction.