The US Federal Trade Commission (FTC) is claiming victory after the US Court of Appeals upheld a verdict it won over reputation site Jerk.com.
The court ruled that John Fanning, the former Napster CEO and chairman, deceived customers about data collection and membership benefits of Jerk.com, a social networking/smear website that was shut down in 2014.
The FTC had charged Jerk.com with misrepresentation, alleging that the site pulled information from other social networking sites and used that data to create a "jerk" page on their own site.
Users were then told that someone had set up the profile in an effort to defame them and that the only way to remove the information was to purchase a membership that gave them control over the page.
The FTC said in a summary decision that the site was misrepresenting the source of its data by claiming another individual had created the pages it was generating itself, and lying to customers about the benefits of purchasing the membership packages.
Fanning had appealed the decision to the First Circuit Court of Appeals, who by and large sided with the FTC [PDF] and upheld the finding of liability against Fanning.
"This ruling makes it clear that the defendant's misrepresentations in this case were harmful to consumers," FTC consumer protection bureau director Jessica Rich proclaimed.
"We are pleased with the ruling, and will closely monitor the defendant's compliance with the order, as we do in all our cases."
The Appeals Court ruling was not a clean sweep for the FTC, however. The court did conclude that some of the conditions the commission put on Fanning in its summary decision were "overboard" and should be vacated.
Specifically, the court struck down personal monitoring provisions placed on Fanning himself, finding that the FTC has no grounds to order the Jerk founder to tell officials about each and every job he holds. ®