Loeb & Loeb's Terri Seligman explains the potential changes to the federal law and its impact on email marketers.
President Bush enacted the first federal law to regulate commercial email -- the Controlling the Assault of Non-Solicited Pornography and Marketing Act, also known as CAN-SPAM -- in late 2003. The Federal Trade Commission (FTC) was granted the authority to issue rules to implement the new law. So far, the FTC has provided rules relating to labels for sexually explicit material and criteria for determining which emails qualify as commercial email.
In May, the FTC issued a notice that proposes some significant changes to CAN-SPAM rules, and an interpretation of CAN-SPAM relating to forward-to-a-friend email programs.
Opt-out Response Time
Probably the most significant change is the FTC’s proposal to shorten the time -- from 10 business days to three business days -- in which a sender must process an opt-out request. CAN-SPAM prohibits a sender from sending commercial email to someone who has submitted an opt-out request, but the sender has 10 business days after it receives the opt-out request in which to stop sending commercial email. The FTC’s stated concern is that some companies will continue to send unwanted commercial email to the recipient during those 10 business days.
The FTC also noted that technology now exists that updates suppression lists almost instantaneously so companies do not need 10 business days to update their opt-out lists. Most advertisers and marketing companies that submitted comments to the FTC urged the FTC to lengthen the response time, arguing that 10 business days is not sufficient for companies that must synchronize multiple email databases, forward opt-out requests to third parties or manually process opt-out requests. However, the FTC is proposing the three-day response time and is seeking comments on this proposal.
Multiple Advertisers
Another proposed change relates to commercial emails that contain ads from more than one advertiser. CAN-SPAM requires, among other things, that each sender of commercial email provide notice of an opt-out mechanism, honor opt-out requests and provide a physical postal address. When an email contains ads from multiple sellers, it can be burdensome for each advertiser to provide an opt-out mechanism and respond to opt-out requests. So the FTC has proposed that if a commercial email contains ads from multiple sellers, a single advertiser can be deemed the “sender” and therefore be the only one who must comply with the opt-out requirements. To be deemed the only sender, the advertiser must advertise its own goods or services in the email and must initiate, or hire someone to initiate, the transmission of the email.
In addition, the sender must do at least one of the following: (1) control the content of the email; (2) determine the distribution list, and/or (3) be identified in the “from” line as the sender. The sender need not do all three things, but no other advertiser may do any of them if it does not want to be considered a “sender.” If no single advertiser can satisfy the necessary requirements, then all advertisers who initiated the email will be considered senders and must therefore provide an opt-out mechanism, honor an opt-out request and provide a physical address.
Opt-out Fees and P.O. Boxes
The FTC also proposes making it clear that a sender cannot require a recipient to pay a fee, provide personal information other than an email address or complete some task other than reply to an email or visit a web page in order to complete an opt-out request. And the FTC proposes allowing P.O. boxes and private mailboxes (including a commercial mail drop) as valid physical postal addresses.
Forward-to-a-Friend Email Campaigns
Forward-to-a-friend email campaigns are a popular way for advertisers to get their ads before more potential customers. There are several types of forward-to-a-friend campaigns, but typically they involve a feature in an email or on a web page that allows an individual to enter someone else’s email address to which an email will be sent. The main question is whether advertisers have to scrub their email lists with the addresses that someone else provides for the forward-to-a-friend campaign and whether advertisers must ensure that the forwarded emails are CAN-SPAM compliant in all other regards.
The FTC stated that whether or not the forwarded email is subject to CAN-SPAM depends on whether there was consideration or inducement for the individual to forward the email. For example, if an advertiser provides incentives, such as money, rewards, coupons, discounts or extra sweepstakes entries to the referrer, the advertiser would be regarded as having provided consideration for the transmission of the email and would have to comply with CAN-SPAM requirements for the forwarded email.
Even without providing consideration, an advertiser would have to comply with CAN-SPAM if it induced the recipient to forward the email. An example of inducement would be "Tell-a-Friend -- Help spread the word by forwarding this message to friends! To share this message with a friend or colleague, click the 'Forward to a Friend’ button." However, the FTC said that a web page that has a “Click here to forward” feature that allows someone to forward a message or link to someone else (and that does not provide any encouragement to do so) would not be considered an inducement.
The FTC’s notice also discussed the definition of transactional and relationship message, the definition of “person," expiration dates for opt-out requests, liability for commercial email sent by affiliates and aggravated violations. The FTC is accepting comments until June 27, 2005; you can find information about submitting comments here.
CAN-SPAM is a relatively new law that is still being interpreted by the FTC and the courts. Nonetheless, the FTC and at least one state attorney general have already initiated enforcement actions under CAN-SPAM. Marketers should therefore be sure to stay up to date on all CAN-SPAM developments.
Terri Seligman is a partner in the Advertising and Promotions Law Group at Loeb & Loeb LLP. Read full bio. Jill Westmoreland, an attorney at the firm, assisted with this article.