By: Lawrence G. Walters, Esq.

Walters Law Group

www.FirstAmendment.com

Introduction:

As the live web cam business continues to surge in popularity, more attention will be focused on operators and performers by law enforcement and other government agencies. The best time to consider operational risks and develop best practices is before notification of an investigation or formal inquiry.  The following best practices are submitted for consideration by both performers and web cam site operators.  Some are legally mandated, and others are designed to mitigate legal exposure.

For Web Cam Site Operators:

1. Formalize All Agreements:  This means careful attention to detail when it comes to things like the site’s web cam performance agreement, online user terms, payment/refund policies, privacy policies, and termination policies. Contracts with all vendors, advertisers, and service providers should be reduced to writing as well.  Too often, operators use inapplicable legal forms, or fail to memorialize agreements at all. Such practice is a lawsuit waiting to happen, with nobody benefitting but the lawyers.
2. Protect Intellectual Property:  Ultimately, a live web cam operator’s brand, and other proprietary or intellectual property, will become the most valuable business assets.  Thinking through intellectual property protection strategies at an early stage is essential.  Changing a brand name after years of successful operation, because of a previously-unknown trademark conflict, can be devastating and result in a huge waste of marketing resources.  Failure to protect intellectual property such as live video display source code, and other copyrightable material, can leave an operator without legitimate options in the event of infringement down the road.  The relatively small cost of registering copyrights and trademarks can pay huge dividends in the future.
3. Thoroughly Vet All Promotional Material:  Whether it’s promotional claims made on a join page, affiliate marketing material, or a twitter post, all marketing material should be reviewed by the operator’s attorneys or legal compliance personnel.  The Federal Trade Commission, along with the state Attorneys General, actively enforce consumer protection laws against website operators.  As the promoted site, the operator may be legally responsible for any questionable or ‘unfair’ trade practices conducted by third party affiliates or advertisers.  Given the increased popularity of live web cam sites, consumer protection agencies (and even private lawyers) are taking an increasingly active role in making sure the site’s customers are not deceived or unfairly pressured into spending money on the site’s services. The FTC’s .Com Disclosures Guide, http://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-revises-online-advertising-disclosure-guidelines/130312dotcomdisclosures.pdf, is a good place to start for operators seeking guidance on required disclosures in the consumer protection realm.
4. Implement Ant-Human Trafficking Standards:  Identification of human trafficking victims has become a significant priority with state and federal law enforcement. Any provider of erotic entertainment services should consider a variety of options designed to reduce any potential claims of facilitating human trafficking.  Website operators might consider training programs offered by recognized experts, such as the Polaris Project, designed to identify and assist victims of human trafficking.  Implementation of robust age and consent verification policies is an important piece of the puzzle to deal with this issue.  Finally, publication of notices and resources for human trafficking victims is likewise advisable.
5. Performer Conduct Oversight: Enforcing performance standards on thousands of models broadcasting at any given moment might seem like an insurmountable task for any cam site operator.  While monitoring every performance is not feasible, random auditing performer compliance with acceptable use policies is necessary and advisable.  Importantly, any legal violation by a performer has the potential to bring liability on the operation as a whole.  Thus, some degree of supervision and enforcement is essential, both by the operator directly, and by fellow performers through abuse complaints.  The first step is making sure that performers know what the operator’s standards are, through clear communication of policies and consequences for violation.  Routine enforcement of performer conduct standards may be important evidence in the event of an alleged legal violation premised on a model’s actions or communications.

For Web Cam Performers:

1. Know What You Own:  In addition to your revenue share, do you have any rights in the performance, any recordings, or your online persona?  Often disputes arise due to lack of clarity in what the performer owns or controls, in connection with the website broadcasts.  Monetizing your character or trade name in the future may be difficult if careful attention to ownership details is not addressed prior to performing.
2. Comply With Age-Verification Laws: Whether it’s Section 2257 records in the United States, or age-of-consent laws in other countries, make sure you have tendered or generated any necessary age-related paperwork, and maintain those records in the proper format.  Section 2257 imposes specific requirements on all ‘producers’ of sexually explicit depictions, and many operators require full 2257 compliance by their performers, regardless of location.  Notably, the performer is usually ‘self-producing’ the erotic content, and is therefore primarily responsible for ensuring that applicable age-verification laws are followed.
3. Consider Local Laws:  Often ignored are local licensing and permitting laws that may govern the production of a live broadcast, or modeling session.  While the state of the law is evolving on the applicability of such obligations to the production of online content, proper advice should be obtained prior to engaging in the first broadcast. Each nation has a different level of tolerance for erotic productions, which should be taken into account as well.
4. Incorporation & Tax Issues:  A web cam model can generate as much or more revenue than a licensed professional.  Yet many performers fail to consider basic business issues such as corporate structuring and tax planning.  A bit of advice on these issues can result in substantial protection of personal assets and maximum tax savings.
5. Personal Marketing:  Devices such as social networks can provide potent marketing strategies for driving traffic to a performer’s web cam feed or site.  Yet promotional statements made through these informal channels can generate significant liability, if mistakes are made. Just as website operators must be cautious with promotional claims made on the site, performers are held to the same standard when advertising their erotic broadcasting services. Educating yourself on basic trade practice regulation can avoid costly legal problems in the future.

Conclusion:

The relationship between performer and site operator takes many forms, and industry standards are still evolving.  This provides both parties the unique opportunity to craft the transaction in the way that permits both parties a reasonable opportunity to succeed, while properly allocating the relevant legal risks.

 

Lawrence G. Walters, Esq., heads up Walters Law Group, and has represented the interests of the adult Internet industry for over 20 years.  His practice includes a unique focus on the needs of those involved with the live web cam field.  Larry can be reached at 800.530.8137 or larry[at]firstamendment[dot]com.