Today I have an amusing story to tell you about a website (now defunct) called Jerk.Com.
The Jerk Business Model
Jerk had an “interesting” business model. Jerk set up a website with profiles of about 80 million people, supposedly created by users, then allowed to comments to be made directed at a person’s qualifications as a jerk.
There were a few problems with Jerk’s approach, not the least of which was that most of the user profiles were created by Jerk and not by its users.
Jerk harvested the information on over 73 million people from Facebook and itself created profiles for use on the Jerk website.
But Jerk wasn’t content to leave it at that. It went on to set up an arrangement whereby consumers whose profiles were posted on Jerk could pay Jerk $30 for a website subscription and then have access to premium features which included the ability to dispute the information posted about them on Jerk.
And finally, the Jerk website profile pages contained fields in which users could add comments about the “jerks” such as:
“Omg I hate this kid he’s such a loser,” and,
“Nobody in their right mind would love you … not even your parents love
Big Brother Is Watching
Although I’m sure a lot of internet trolls were totally amused by using Jerk to take cheap shots at people they didn’t like, the FTC was not amused.
In 2014 the FTC filed a complaint against Jerk.Com, for misleading consumers when it led consumers to believe:
that the content on Jerk.com had been created by other Jerk.com users, when in fact most of it had been harvested from Facebook; and by falsely leading consumers to believe that by paying for a Jerk.com membership, they could access “premium” features that could allow them to change their “Jerk” profile.
The FTC claimed that many users who paid the $30 membership to Jerk often got nothing in return.
The Jerk Defense
Jerk was obviously busted on creating most of the profiles itself, so Jerk agreed that if it had claimed all the profile pages were created by users, that would have been misleading. So, Jerk tried to defend itself by claiming that it never expressly claimed that all the profiles were user created.
The case made it to the United States Court of Appeals. That court noted that it is not just the express claims made by Jerk that matter. You must consider the “overall impression” left with consumers acting reasonably under the circumstances to determine if Jerk’s promotional material was misleading.
It gets worse (for Jerk). The Court went on to say that the FTC doesn’t have to show that all, or even a majority, of consumers found a particular claim was implied. If a significant minority of consumers are misled, that is sufficient.
And what if a claim is subject to two interpretations by consumers – one truthful and one misleading?
The rule is that if a claim conveys more than one meaning, only one of which is misleading, a seller is liable for misleading consumers even if non-misleading interpretations are possible.
Liability may be imposed if at least a significant minority of reasonable consumers would be likely to believe the misleading claim considering all the circumstances.
The FTC felt that Jerk’s references to its “millions” of users; its disclaimers that it could not be held liable for content because its content reflected the views of its users; and the “Post a Jerk” page inviting users to create profile pages created a net impression that implied Jerk.com contained wholly user generated content.
The FTC concluded, and the Court of Appeals agreed, that at least a significant minority of users could reasonably view Jerk.com as claiming its content was wholly user generated, which was not the case.
It is important to understand that this is true even though Jerk never expressly claimed that its content was entirely user created. The FTC read this into Jerk’s marketing efforts after considering the “overall impression” that Jerk users would be left with.
In effect, you must be able to read the minds of your consumers and decipher what the typical consumer will conclude after reading your marketing materials.
Putting aside all the legalese, what you can take away from the Jerk case and use to guide your own decisions about what you can say or imply in your marketing efforts is as follows:
- It is not just the claims you expressly make that are important
- Things you imply without saying outright can get you in trouble too
- If your claim, express or implied, is susceptible of two meanings, one of which is misleading, if a significant minority of your reasonable readers will believe the misleading meaning, the claim should not be made.
All the legal mumbo-jumbo can be confusing and hard to understand. Don’t worry about that. Here’s how you stay out of trouble with the FTC:
Don’t attempt to convey misleading information to consumers either by using direct statements or by implying things that are not truthful.