A U.S. Federal Court of Appeals has upheld a summary decision by the Federal Trade Commission ("FTC") which ruled that the founder of the website Jerk.com was liable for misrepresentations regarding the source of the website’s content and the benefits of membership. Founded in 2009, Jerk.com was a self-proclaimed reputation management website featuring profiles of individuals that allowed users to vote on whether someone was a “jerk” or “not a jerk”, and displayed the total number of votes received. Many of these profiles also had a photo of the profiled person.
According to the FTC's Opinion, Jerk.com falsely claimed that the profile pages were “user generated” rather than pre-populated by the company. Although the site never actually stated that its profiles were user-submitted, the Court decided that the language employed by the site would lead reasonable consumers to believe this is the case. The Court also affirmed the FTC’s findings that the benefits advertised by the website for end-users (reputation management and dispute their profile pages) were misleading.
This case is part of a wider regulatory scrutiny focusing on misrepresentation in respect of content and sponsored content (see our March Client Update in this regard). The decision demonstrates the importance for content platforms and websites to carefully assess users' potential inferences from a webpage and the overall net impression of the website, in order to avoid misleading advertising and content providing.