FTC vs. Girls Gone Wild

Last week in class, one of my more energetic students asked me about this case, brought while I was at the FTC.  It involved what we call "negative option advertising," which means that after you purchase one video, more video's keep arriving until you "opt out."

The FTC charged that Girls Gone Wild made this very difficult to do which resulted in more sales than the customer really wanted.

The FTC contended that the defendants’ advertising did not tell consumers how the continuity programs operated, failed to obtain consumers’ express consent to be enrolled, and did not give consumers an effective means to cancel their memberships once they were enrolled. 

The rationale for enforcement is market failure due to not enough information--that is, if the consumer had the information, he would have never ordered the videos.