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. Mr. Hutchins started his career as a lawyer in Cheyenne, Wyoming. First gaining experience as a law clerk for the district court judges, Mr. Hutchins entered private practice with a Cheyenne firm focused on civil litigation, business law and some general practice law. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and the broad reach of municipal law. Mr. Hutchins returned to Cheyenne to represent the State of Wyoming in the national tobacco arbitration. While in that position, he developed the consumer protection unit for the Wyoming Attorney General's Office. He led over 120 investigations and enforcement actions in Wyoming and worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado. Mr. Hutchins relocated to Colorado in 2016 and founded Harmony Law. Mr. Hutchins has established Harmony Law in three principal areas of law. First, it is a general practice firm in the areas of business law, estate planning and family law. Secondly, it is a civil litigation firm, practicing law in state and federal courts throughout Wyoming and Colorado. Finally, it is one of the few firms in Wyoming or Colorado that focuses on consumer protection law.


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