WWW- The parent company of AdultFriendFinder.com and a handful of other adult web sites has been sanctioned—sort of—by the Federal Trade Commission for serving up pornographic pop-up ads.

AdultFriendFinder, which bills itself as the “The World’s Largest Sex & Swinger Personals Community,” and other properties owned by Various, Inc., were targeted by the FTC for using spyware to serve up X-rated ads to unwitting web surfers.

According to the FTC, the ads were served up when users performed online searches for terms as innocuous as “flowers,” “travel,” and “vacation.” The FTC also says that some of the ads were also served up to children.

Various, Inc. has admitted no wrongdoing in the consent decree with the FTC. As part of the settlement, the company has agreed to change its marketing practices. Pornographic ads will no longer be served unless users have specifically consented to them.

Various, Inc. will also post a form online through which consumers can register complaints about any advertising they might see, and the company has agreed to keep detailed records so that the FTC can monitor compliance with the decree.

What Various, Inc. won’t have to do is pay any sort of fine. As a first-time violator, the company is exempt from paying any fines because federal law only allows the FTC to levy financial penalties on the second offense—and then only when it can show that consumers have suffered economic harm or a company has profited from serving up spyware. As a result, Various and other offenders can walk away from a first offense with little more than a slap on the wrist.

As the federal agency with primary authority for combating spyware, the FTC no doubt has a lot on its plate. The Commission has been lobbying Congress for expanded powers, including the ability to levy massive fines and even jail offenders, but Congress has yet to act. Last June, the House passed a bill that would raise the penalties for spyware purveyors, but the Senate has yet to take action on it.

As it currently stands, the restrictions placed on the FTC are tantamount to telling spammers and fraudsters “Go ahead, push the limits; you get one ‘get out of jail free’ card anyway.” Perhaps AdultFriendFinder.com has learned their lesson regardless, but the FTC should be able to punish companies when they are clearly in the wrong, first time offense or not.