FTC Slaps AdultFriendFinder For Porn Pop-ups

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Daily Crunch: Pac Funds Edition

Adult dating site AdultFriendFinder, rumored to have been acquired in November for $1 billion is on the wrong side of the Federal Trade Commission (FTC) with a settlement that restricts AdultFriendFinder’s promotional activities.

The FTC said in a statement that AdultFriendFinder affiliates used pop-up ads to drive traffic to the site, and exposed consumers, including children to sexual explicit images when search for terms including “flowers,” “travel,” and “vacations.” More seriously the FTC alleged that the ads were also distributed with spyware and adware.

The FTC found that “the practice of displaying graphic pop-up ads without consumer consent was unfair, and violated the FTC Act;” essentially saying that porn pop-ups are illegal.

AdultFriendFinder agreed to a settlement with the FTC which sees the company admitting no guilt in return for not displaying sexually explicit ads to consumers unless they’re looking for that sort of content (or are already on an adult site) and to cease using pop-ups. AdultFriendFinder must also force affiliates to comply with the settlement or terminate them should they not comply. The last point is the interesting one because AdultFriendFinder has one of the bigger affiliate programs online, and would certainly have the largest affiliate program of any dating company; affiliate promotion is their bread and butter and if suddenly affiliates left the program or were restricted in ways that dramatically reduced clickthrus to AdultFriendFinder, the $1 billion sales price starts to look a little high; perhaps the later rumored price of $300 million at 3x EBITDA was such a low multiple because they saw this coming?

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