• Court Rules that the CAN-SPAM Act Applies to Facebook
  • June 15, 2011 | Authors: Louis J. Levy; S. Jenell Trigg
  • Law Firm: Lerman Senter PLLC - Washington Office
  • In a unique case of first impression, a federal court ruled that the transmission of Facebook pages bearing materially false or materially misleading advertising to Facebook contacts constituted an electronic mail message in violation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”).  The court’s expansive definition of what represents an electronic mail message raises significant issues for communications and media companies that use Facebook and other social media platforms for advertising and other promotional purposes.

    This ruling came in review of a motion to dismiss filed by MaxBounty, Inc. in its dispute with Facebook. Facebook, Inc. v. MaxBounty, Inc. (Case No. CV-10-4712-JF, N.D. Cal., March 28, 2011).  Ordinarily, there is no private right of action for violations under the CAN-SPAM Act; however, the Act excludes Internet Service Providers (“ISP”) from such prohibitions.  Facebook is an ISP and can bring lawsuits to protect its network and operations.  MaxBounty is an advertising and marketing company that uses a network of online publishers to drive traffic to websites of third party advertisers.  In its complaint, Facebook alleged that MaxBounty used a network of affiliates to create numerous “fake” Facebook pages that displayed a commercial message urging users to take advantage of a “limited time offer” to receive gift cards or other merchandise.  Interested users then began a registration process that required them to become a “fan” of the page, invite all of the users’ Facebook friends to join the page, and complete additional registration requirements.  At the end of this process, users were directed to a website managed by MaxBounty, which in turn redirected them to a third party commercial website.

    Facebook argued that the creation of these “fake” Facebook pages, and their subsequent distribution to a user’s “wall,” “news feed,” the home page of a user’s friends, or a Facebook inbox or external email address, constituted delivery of an electronic mail message.  The CAN-SPAM Act defines an “electronic mail message” as a “destination commonly expressed as a string of characters, consisting of a unique user name or mailbox and a reference to an Internet domain name (commonly referred to as a “domain part”), whether or not displayed, to which an electronic mail message can be sent or delivered.”  MaxBounty argued that this definition applied solely to traditional email messages - i.e., messages sent directly to a user’s electronic mail box - and that, as a consequence, MaxBounty’s actions did not violate the CAN-SPAM Act.

    The court disagreed.  In particular, the court noted that users were instructed to “effect transmission” of the Facebook pages at issue to all of their Facebook friends.  These transmissions, wrote the court, “required at least some routing activity on [the] part of Facebook,” and “any routing necessarily implicates issues regarding volume and traffic utilization of infrastructure issues which CAN-SPAM seeks to address.”  The court concluded that the communications involving the transmission of the Facebook pages was an “electronic message” for purposes of the CAN-SPAM Act and MaxBounty’s motion to dismiss the CAN-SPAM Act claim was denied.

    Although the substantive case is still pending, the court’s decision to interpret broadly the definition of an “electronic mail message” means that any company that uses a social media platform to promote itself must closely monitor its advertising and marketing practices, as well as the practices of the online advertisers it works with, to ensure that neither violates the CAN-SPAM Act by transmitting a commercial or transaction/relationship electronic mail message that contains, or is accompanied by, header information that is materially false or materially misleading.  It is not clear whether other CAN-SPAM Act requirements, including requirements for electronic mail sent to a mobile device, extend to all parts of a social networking platform, or if it does, how those requirements would be implemented.  For example, the CAN-SPAM Act requires that every commercial electronic message disclose that it is an advertising message and include a functioning opt-out mechanism.  However, implementing such disclosures and opt-out mechanisms in other social networking platform areas may be problematic except for messages transmitted to a Facebook inbox or external email address.  Therefore, all companies need to assess carefully the ways in which they utilize social media platforms to avoid liability under the CAN-SPAM Act or other related statutes.