Those that help faciliate deceptive marketing can also be held liable

Posted by Clyde Hutchins | Oct 10, 2016 | 0 Comments

On September 23rd, 2016, the U.S. Court of Appeals for the Second Circuit affirmed a lower court ruling that LeadClick Media, LLC is liable for assisting third party affiliate marketers in the deceptive marketing of a weight-loss supplement. LeadClick recruited affiliate marketers that utilized fake news sites to direct online consumers to a weight-loss supplement website. LeadClick knew that the sites were fake and assisted in creating content on the sites. LeadClick also purchased advertising space from legitimate online news sites and used it for the fake news sites.

This is the first decision by a court of appeals holding that an affiliate marketing group could be liable for the deceptive acts of third party affiliate marketers. In making its ruling, the Court held, "that under the FTC Act, a defendant may be held liable for engaging in deceptive practices or acts if, with knowledge of the deception, it either directly participates in a deceptive scheme or has the authority to control the deceptive content at issue." This ruling extinguishes the otherwise clear division between the affiliate marketing group and the affiliate marketers when the affiliate marketing group is involved in the deceptive marketing.

The name of the case is: FTC v. LeadClick Media, LLC

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Prior to opening Harmony Law, Mr. Hutchins worked in the Wyoming Attorney General's Office for several years where he developed a strong consumer protection enforcement unit. In that position he led over 120 investigations and enforcement actions under the Consumer Protection Act. He worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado, on consumer protection matters. Mr. Hutchins is also a contributing author to Consumer Protection Law Developments, Second Edition. Previous to his work in the Attorney General's Office, Mr. Hutchins was in private practice in Anchorage, Alaska where he was the chief litigator for a firm. Mr. Hutchins represented municipalities on various matters. Mr. Hutchins provided counsel to businesses and investment advisors regarding compliance with securities laws. He was also a bond lawyer and worked on municipal financing matters. Prior to that, Mr. Hutchins practiced civil litigation with a law firm in Cheyenne, Wyoming. Mr. Hutchins devotes his spare time to his family, traveling and enjoying the great outdoors.


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