On September 25, 2019, the Federal Trade Commission (“FTC”) filed a Complaint against Match Group Inc. (“Match Group”), parent company of Match.com, seeking a permanent injunction and civil penalties. The FTC’s Complaint alleges that Match.com engaged in the use of deceptive marketing practices “to induce consumers to subscribe to Match.com and keep them subscribed,” and that these practices violated, among other laws, the Federal Trade Commission Act (“FTC Act”) and the Restore Online Shoppers’ Confidence Act (“ROSCA”).
Why is the FTC going after Match Group?
Match Group Leads a Growing Online Dating Industry
Online dating continues to be a rapidly expanding industry. In 2018, nearly 50 million adults in the United States reported engaging with online dating sites/apps at one point or another. With more than 1,500 dating apps, the industry generated $3 billion in revenue in 2018 alone. Within this industry, Match Group is the clear leader. Match Group controls approximately 25% of the online dating market, offering such popular services as Tinder, OKCupid, Plenty of Fish, and Match.com. With respect to Match.com specifically, the primary driver of revenue is user subscriptions. When a subscription is paid, that subscriber can create a profile and is granted access to messaging tools on the platform. Non-subscribers to Match.com can still create a user profile, but cannot either access messages sent to them or send messages themselves.
Match.com’s Alleged Deceptive Marketing Practices
The FTC’s complaint alleges that Match.com has engaged in deceptive marketing practices in violation of the FTC Act and ROSCA by:
- Allowing fake communications regarding love interest to drive subscriptions. The FTC contends that Match.com allowed communications from illegitimate or fraudulent accounts to generate deceptive advertisements and sell subscriptions, exposing consumers to certain scams. Such scams include:
- “Romance scams,” where a perpetrator poses as a potential suitor, establishes trust, and persuades the person to give or loan money;
- “Phishing scams” aimed at stealing a consumer’s personal information;
- Promoting dubious or unlawful products/services;
- “Extortion scams,” in which a perpetrator induces a consumer to send compromising videos or photos and then threatens to send them to family and friends unless the consumer pays.
Specifically, according to the Complaint, when an illegitimate account messaged a non-subscriber, the non-subscriber was notified via an email communication from Match.com. To view the content of that message, the non-subscriber was told that she/he needed to subscribe to Match.com. However, Match.com would seldom disclose that the message possibly came from a fraudulent account. On the contrary, Match.com’s email alert typically represented that the message was sent from a legitimate account. The FTC alleges that between June 2016 and May 2018, Match.com received nearly 500,000 new subscriptions within 24 hours of non-subscribers receiving messages from fraudulent accounts.
- Knowingly exposing consumers to scams. The FTC alleges that com knowingly exposed consumers to fraud from accounts that it knew were likely engaging in fraud. Match.com often screens users that send communications through the site/app in order to identify accounts that may be perpetrating scams. However, between 2013 and 2018, the complaint explains that Match.com delivered email communications from fraud-flagged accounts to non-subscribers while withholding them from subscribers. Despite its ability to protect its customers, Match.com did not extend these protections to non-subscribers. According to the FTC, between June 2016 and May 2018, Match.com delivered approximately 4 million messages to non-subscribers that would have otherwise been flagged as fraudulent.
- Misleading “guarantee” programs. Until mid-2019, Match.com guaranteed a free 6-month subscription renewal if the subscriber failed to “meet someone special.” However, the FTC contends that many of the requirements for redeeming the guarantee were either purposefully inconspicuous – such as acceptance of the “Guarantee Extension” within seven days – or deceptive. For those who successfully navigated these program requirements, consumers needed to answer a question to proceed: “Did you meet anyone during your 6-month guarantee program?” Because many consumers technically met other people during this time, but not “someone special,” they would answer “yes.” Answering “yes” disqualified them from receiving the guarantee.
- Purposefully confusing customers regarding cancellation. Subscriptions for Match.com are automatically renewed until they are cancelled. In order to cancel, a subscriber must locate the Cancel Subscription hyperlink and cancellation tab, input her/his password, click through two pages of survey questions, until the subscriber reaches the cancellation confirmation page. com executives admitted that the process was “convoluted and confusing” and that it takes “up to 7 or 8 clicks . . . to turn off subscriptions if you can ever figure out how to do it.”
- Terminating accounts of users after billing disputes. Given the above deceptive marketing practices, consumers often disputed their Match.com bills. However, when Match.com prevailed in those disputes, it often terminated the applicable consumers’ access to their Match.com account or services, despite having months left on their subscriptions.
Repercussions for Online Dating Sites
Given the growing market for online dating, this suit may have far-reaching implications for the other 1,500 platforms in the space. If successful, the FTC will effectively put these companies on notice that employing deceptive marketing practices and policies to take advantage of consumers looking for love will be scrutinized and the perpetrators held accountable under the FTC Act and ROSCA.