In April of 2008, it came as quite a shock to the affiliate community when eBay filed a civil suit against Shawn Hogan, Brian Dunning and Todd Dunning – best known to the SEO community as the owners of the Digital Point forums.
But, it was originally just a civil matter. No matter how scummy cookie stuffing was and no matter how many program terms it was against by affiliate merchants and networks – it wasn’t deemed illegal. Until now.
On June 24, 2010, indictments were handed down by a California grand jury against Shawn Hogan (link) and Brian Dunning (link) following an investigation by the FBI Cyber Crimes Department. The defendants face up to twenty years in prison if convicted.
Kellie Stevens from ReveNews does a fantastic job of laying out the details of those indictments. I was amazed merely by the fact that a grand jury was even able to “grasp” what they were handing out indictments for. Kellie summed it up beautifully in her post:
“For me, one striking point with the indictments is that the FBI and a grand jury were evidently able to grasp technical aspects of affiliate marketing and tracking, and ultimately arrived at the conclusion that the tactics were criminal in nature.”
The rest of the world is catching up with us. They’re becoming so Internet literate that “regular folks” are starting to understand the “way things work” in regards to e-commerce and Internet marketing.
And it might mean that a lot of practices that are currently simply deemed against “terms or service” or showcasing a lack of common morals or fair play may soon also be deemed illegal. (Please note, I am not claiming any of the below to actually BE illegal or crimes… I’m simply stating food for thought.)
- Will arbitragers cloaking their websites to imitate real websites – unknown to the owners of those imitated websites – to get around AdWords quality scores soon be considered to be committing identity theft or counterfeiting?
- Will companies like Merchant Circle soon be considered to be committing fraud by not openly stating to consumers that they allow business owners to delete negative reviews about their businesses?
- Will companies like Rip Off Report be considered to be committing blackmail by being willing to alter negative information about a company – but only for a fee?
- Will the sneaky designer/webmaster that puts hidden links on a client site to benefit their own sites or sites of those who have paid them – without telling the website owner whose site they’re hiding the links on – soon be considered to be an embezzler?
- Will owning and operating twenty Twitter accounts all pretending to be breathing, living individuals recommending information, websites and merchants that are really bots be considered fraudulent?
- Will pumping PPC traffic into a website in order to inflate traffic numbers to sell it – without informing the buyer the traffic is coming from PPC – become a new type of securities fraud rather than simply a lack of due diligence by the buyer?
As regular people, law enforcement and the judicial system become more educated and familiar with the net, it will help them to understand the basics behind Internet marketing. Where they once roamed blindly, they might now be able to identify that acts of a digital nature – ie the webmaster entrusted with a website who then steals link juice from that website by selling hidden links without informing the website owner – could potentially be crimes.
The indictments against Shawn Hogan and Brian Dunning – to me – are more than a single case and a legal precedent potentially being set for cookie stuffing. It signals that the wild west days of marketing on the web may soon come to a close.
Oh, and that we can likely expect multiple crime shows to do a really bad episode on the topic where their Internet “experts” excitedly talk about “website hits.” [headdesk]