Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
The U.S. Federal Trade Commission has told Bidz.com it will not face punishment under the Can-Spam Act. The agency was investigating whether the online retailer made it possible for consumers to unsubscribe to marketing e-mails as required by law.
Citing efforts by Bidz.com to honor consumers’ e-mail opt-out requests, the U.S. Federal Trade Commission’s Midwest Region says the jewelry e-retailer will not face punishment under the Can-Spam Act.
The agency says, however, that it will continue to monitor Bidz.com’s e-mail marketing practices and is not ruling out future FTC action. Companies found to be in violation of Can-Spam can receive fines of up to $16,000 for each violation.
The FTC started investigating Bidz, No. 71 in the Internet Retailer Top 500 Guide, in May 2009 for lack of compliance with the Can-Spam Act. The commission looked at the alleged failure of the retailer to honor opt-out requests by recipients of commercial e-mails sent by or on behalf of Bidz. In a letter to the retailer’s attorney earlier this month, the FTC said it found no reason to proceed with enforcement.
“Upon careful review of this matter, we have decided not to recommend enforcement action at this time,” C. Steven Baker, director of the FTC Midwest Region, said in a letter to Bidz.com’s attorney, David A. Zetoony, who works for the Washington, D.C. law firm of Bryan Cave LLP. “We note that, before being contacted by the FTC, Bidz.com implemented more stringent suppression list controls to facilitate honoring opt-out requests.”
Bidz.com CEO David Zinberg says the retailer has fully cooperated with the FTC and was pleased with its recent decision. “We take very seriously our and our marketing partners’ obligations relating to e-mail marketing,” he says. “This favorable result will allow us to concentrate on our core business.”
Baker, however, says the FTC will continue to keep abreast of the retailer’s marketing practices. “The Commission reserves the right to take such further action as the public interest may require,” he says.
Section 5(a)(3) of the Can-Spam Act requires that commercial e-mail messages contain a functioning return e-mail address or other Internet-based mechanisms that e-mail recipients can use to block commercial e-mails from the sender.
The FTC provides information about Can-Spam on its web site, FTC.gov, under the heading The Can-Spam Act: A Compliance Guide for Business.