Adteractive was found guilty of not disclosing that consumers had to spend money in order to receive the the advertised prizes. The campaign lured users onto its websites with the prospect of receiving free gifts. The e-mails featured subject lines such as "Test and keep this Flat-Screen TV," "Test it – Keep it – Microsoft Xbox 360," or "Congratulations! Claim Your Choice of Sony, HP or Gateway Laptop."

However, before they could get the so-called “free gifts”, users first had to go through a series of ads for goods and services from third parties. After the ad wave was over, they were informed that they also had to "participate in" a series of third-party promotions such as taking out a car loan, subscribing to satellite television service, or applying for multiple credit cards.

According to the FTC, Adteractive’s failure to disclose such facts was deceptive in violation of the FTC Act, while the deceptive subject lines in Adteractive’s spam e-mails were a text book violation example of the federal CAN-SPAM Act.

The settlement terms state clear that Adteractive’s future spam must respect current legislation and the FTC will keep o monitoring eye on the company to make sure things go they way they should.

The settlement was approved by the Commission by a 4-1 vote, with Commissioner Jon Leibowitz being the only one critical on the chosen solution:

the civil penalty that Adteractive must pay is a downward departure from our other CAN-SPAM Act cases and is not adequate to deter violations in the future,” Leibowitz stated.

Our bet is that Leibowitz was thinking about the AOL spammer, who ended up in jail for 27 months, plus a $180,000 fine. He was sentenced early this month.