ValueClick Under Federal Trade Commission Investigation

  |  May 21, 2007   |  Comments

The lead generation firm confirms it has received a letter from the FTC for possible CAN-SPAM act infringement.

Lead generation firm ValueClick has confirmed that the Federal Trade Commission (FTC) has notified the company it is being investigated for possible CAN-SPAM act violations concerning its lead generation practices.

The company made the announcement through a Form 8-K filing with the Security Exchange Commission and said it would comply with any government investigation of its practices.

"We continue to believe that we are compliant with all current state and federal regulations pertaining to our lead generation activities, and we intend to fully cooperate with the FTC in connection with their inquiry," John Ardis, vice president, corporate strategy for ValueClick, told ClickZ in an e-mail.

ValueClick also stated the investigation revolves around Web sites which promise consumers a free gift of substantial value, and how traffic is directed to those Web sites, particularly through e-mail.

The FTC confirmed the investigation into ValueClick, but a spokesperson declined to discuss the matter further.

Lead generation experts are predicting that ValueClick is most likely following the letter of the law regarding CAN-SPAM, but that the investigation into the company, and possibly other companies as well, is indicative of the industry's inability to successfully regulate itself to the satisfaction of end users.

"The online lead generation space has been watching itself, with people trying to find where users won't have too much backlash, basically making their own rules as long as they weren't breaking the law," said Daniel Felter, CEO of Opt-Intelligence, chairman of Online Lead Generation Association, and a ClickZ columnist. "And this might mean the government is coming down and saying [you] have the opportunity to do things right and you abused your leeway, and now we're going to tell you the way it's going to be and we're going to protect the consumers."

Some groups have called on the FTC to take action regarding lead generation practices before, and Felter said that in the end legislation may be unavoidable.

"We don't have the enforcement power; only the government does," said Felter. "We'd rather see the industry self-regulate, but we definitely applaud the enforcement action. Any enforcement by the government that will benefit consumers and the industry as a whole, we applaud that as an organization."

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