Founder Liable for Deceiving Its Users

 (CN) — The First Circuit upheld a deceptive practices charge against the operator of for harvesting personal information from Facebook to create personal profiles.

     John Fanning founded Jerk LLC in 2009, which operated until 2014. styled itself a reputation management website and “anti-social network,” where users could vote on whether someone was a “Jerk” or “not a Jerk,” and post anonymous reviews about other people.

     By 2010, had 85 million profile pages, but relatively few users. Jerk created the vast majority of profiles by using a computer program to grab names and photos from Facebook.

     The website stated that individuals could only “resolve disputes” regarding the content on their profile pages if they were a paid for a $30 membership.

     The Federal Trade Commission found Fanning personally liable in 2014 for misrepresenting the source of Jerk’s content as user-generated, and the benefits of membership.

     The First Circuit affirmed Fanning’s liability Monday.

     “Even if never expressly represented that its profile pages were created exclusively by users, it never expressly stated how the pages were created,” Judge Juan Torruella said, writing for the three-judge panel. “Reasonable consumers could conclude other users created their profile pages.”

     The commission cited user complaints showing that consumers purchased memberships from based on concerns that someone they knew had created their profile page, and it would be seen by others.

     However, Torruella said the commission’s order requiring Fanning to keep the commission informed of his future business affiliations is overbroad.

     “The Commission conceded that this provision would ostensibly require Fanning to report if he was a waiter at a restaurant,” Torruella said.

     This provision should only apply if Fanning is employed in a business where he might potentially replicate’s deceptive practices, the opinion said.

     The court upheld reporting requirements mandating that Fanning notify the commission of any complaints against him related to any website or online service for five years.

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