[co-author: Stephanie Kozol]*
The Federal Trade Commission (FTC) and the Utah Department of Commerce’s Division of Consumer Protection (Division), represented by the Office of the Utah Attorney General (AG), recently announced a proposed consent order with Aylo, the company that owns and operates pornography websites, including Pornhub.com and Redtube.com. The proposed consent order includes the implementation of a compliance program and a $5 million penalty.
Pursuant to the complaint, the FTC and the Division allege that Aylo distributed child sexual abuse material (CSAM) and nonconsensual material (NCM) in violation of the FTC Act and the Utah Consumer Sales Protection Act (UCSP). Specifically, the FTC and Division claim that Aylo’s distribution and failure to police CSAM and NCM on its sites constitute deceptive and unfair acts or practices in violation of the FTC Act, and deceptive and unconscionable acts or practices in violation of the UCSP. The FTC also alleged that Aylo made false or misleading representations regarding users’ data security, constituting a deceptive act or practice in violation of the FTC Act.
The proposed consent order requires Aylo to implement a CSAM and NCM prevention program as well as a system to verify that individuals appearing in photos or videos are adults who have consented to the conduct and its publication. The proposed consent order also requires any content uploaded prior to the implementation of the prevention program to be removed until age and consent have been verified. Aylo must also implement a comprehensive privacy and information security program to address data security issues identified by the FTC.
In addition to the injunctive relief, the proposed consent order imposes a total of $15 million in civil penalties to be paid to the Division, $10 million of which may be avoided by the company if it maintains compliance with the provisions of the proposed consent order.
This action exemplifies the increased regulatory scrutiny on explicit online material, with a particular focus on CSAM and NCM, and demonstrates the broad applicability of consumer protection acts like the FTC Act and state analogs. Regulators expect content providers and publishers to closely police this activity or subject themselves to penalties such as those imposed on Aylo. The sheer amount of content most providers are expected to monitor does not make compliance simple or easy. Consultation with counsel at the earliest stage of any internal or external investigation can ensure compliance and mitigate the cost of litigation or the imposition of sanctions.
*Senior Government Relations Manager
