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Napster Founder John Fanning in Hot Water with FTC

It seems that the Napster Co-Founder, John Fanning, can’t seem to stay out of trouble.  Last week the FTC issued an order against him, and Jerk, LLC related to the operation of Jerk.com.  Jerk.com is a social media site that allows users to set up profiles for other individuals and then people can rate them as either ‘jerk’ or ‘not a jerk.’  The issue, according to the FTC, is that Jerk.com is using deceptive trade practices on the site.

The FTC complaint claimed that the site was falsely representing to consumers that that content that was published on jerk.com was user generated.  In reality, much of the content was harvested from Facebook.  They also said jerk falsely represented to consumers that if they signed up for the $30 membership, they would get extra benefits such as the option to dispute information, edit or delete profiles and more.  Finally, those who wished to formally dispute or challenge items on the site actually had to pay $25 just to email the customer service department.

According to the press release from the FTC:

The Federal Trade Commission charged the operators of the website “Jerk.com” with harvesting personal information from Facebook to create profiles labeling people a “Jerk” or “not a Jerk,” then falsely claiming that consumers could revise their online profiles by paying $30. According to the FTC’s complaint, between 2009 and 2013 the defendants, Jerk, LLC and the operator of the website, John Fanning, created Jerk.com profiles for more than 73 million people, including children.

According to the FTC’s complaint, Jerk.com profiles often appeared in search engine results when consumers searched for an individual’s name. Upon viewing their photos on Jerk.com, many believed that someone they knew had created their Jerk.com profile. Jerk reinforced this view by representing that users created all the content on Jerk.

But in reality, the defendants created the vast majority of the profiles by misusing personal information they improperly obtained through Facebook, the FTC alleged. They registered numerous websites with Facebook and then allegedly used Facebook’s application programming interfaces to download the names and photos of millions of Facebook users, which they in turn used to create nearly all the Jerk.com profiles.

In the order from the FTC, it was mandated that all of the personal and customer information that had been collected on the website be deleted.  The website is already defunct, but the information was still held by Jerk, LLC.

The FTC is clearly hoping to prevent the owners from selling this information to third parties.

In addition to this, the FTC stated that Fanning was to be personally liable for the deceptive trade practices of the site since he directly participated in and controlled the site.  As of this publication there has been no official response from Fanning or Jerk, LLC.

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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