• State of the Fight Against Spam: Does California Have the Answer?
  • October 23, 2003 | Author: Mark G. McCreary
  • Law Firm: Fox Rothschild LLP - Philadelphia Office
  • Every person with an e-mail account faces the same daily struggle: unsolicited e-mail. Also known as "spam", these unwanted e-mails often outnumber legitimate messages received from colleagues, family and friends. Discussions about the spam epidemic occur every day at water coolers, in boardrooms and in legislatures across the nation. Despite an almost universal disdain, the amount of spam increases with each passing day.

    Astounding Impact on Business, ISPs and the Average User
    A recent Radicati Group study projected that companies will spend an additional $20.5 million in 2003 on computer servers to handle spam. Even more shocking is Ferris Research's estimate in 2002 that spam costs US corporations $8.9 billion in lost productivity. Simply put, the volume of spam that reaches users' inboxes is astounding. AOL reports that it blocks approximately 2.4 million spam messages per day. AOL and MSN each report that 80% of all e-mail sent to their servers is spam. MessageLabs reports that 55% of all e-mail in May 2003 was spam, while the Radicati Group estimates that 70% of all e-mail will be spam by 2007. USA Today estimated in May 2003 that two trillion spam messages will be sent in 2003, eclipsing the number of pieces of mail delivered by the United States Postal Service in 2002 - 100 times over.

    The increase in spam has caused corporate America to react drastically. According to the Radicati Group, 52% of companies surveyed indicated that the reduction of spam is their top priority, while only 30% of the same respondents identified improving security as a priority. It is estimated that the amount of money spent on anti-spam products and services will rise from $652 million in 2003 to $2.4 billion in 2007. However, experts agree that no filter or software has been developed to stop the creative and tricky spammer.

    The costs to Internet service providers (who bear the brunt of processing all of this spam) have grown exponentially with the volume of spam. For example, one notorious spammer sent over 825 million spam messages to users through Earthlink's servers, costing Earthlink one million dollars in bandwidth costs alone. In June 2003, Microsoft fought back against spammers and filed 15 lawsuits against alleged spammers under the laws of the State of Washington. Microsoft claims that the defendants sent over two million spam messages to Hotmail and MSN e-mail users.

    E-mail users are concerned with lost time, offensive content and (perceived) violations of privacy associated with spam. A December 2002 Harris Poll revealed that 74% of adult Internet users favored "making mass spamming illegal". A February 2003 poll by Public Opinion Strategies revealed that 88% of respondents want legislation to reduce spam. However, 68% of the respondents in the same poll do not believe that legislation alone will curb the volume of spam.

    State and Federal Efforts
    Surprisingly, the most significant steps to reduce spam seem to be on the legislative front. The House Subcommittee on Commerce, Trade and Consumer Protection approved a measure called the International Consumer Protection Act on September 24, 2003, but there currently is no U.S. federal anti-spam law in effect. The United Kingdom and Australia have passed legislation to curb the volume of spam. State legislators have discovered that their constituents demand new laws that reduce the volume of spam. Currently 36 states have passed laws designed to reduce the amount of spam. Astoundingly, the Federal Trade Commission reports that 70% of spam is illegal under one or more states' laws. Ironically, many people believe that potential federal legislation would pre-empt and "take the teeth out of" many existing state laws, and do not favor a federal approach.

    California's Current Anti-Spam Legislation
    No state law has created as much discussion and as much hope for those in favor of making spam illegal as has California's new anti-spam law. Scheduled to take effect on January 1, 2004, California's new anti-spam legislation is an amended, consumer-oriented version of California's existing anti-spam legislation. California's current anti-spam legislation takes the "opt-out" approach. The current anti-spam legislation prohibits an individual or business conducting business in the State of California from e-mailing a message consisting of unsolicited advertising material, unless that sender previously establishes and maintained a toll-free telephone number or e-mail address that a recipient may contact in order to be excluded from further unsolicited e-mail. Additionally, the current anti-spam legislation (1) requires that the foregoing toll-free telephone number and e-mail address be included in all e-mail advertisements, (2) prohibits further unsolicited advertising material from being sent to any person who has requested not to receive them, and (3) requires that e-mail advertisements contain a heading of "ADV:" or "ADV:ADLT." A violation of the foregoing requirements is a misdemeanor under the current law.

    California's New Anti-Spam Legislation
    The author of the new California anti-spam legislation, Senator Kevin Murray, told the Associated Process that "[t]here are no loopholes, no way of getting around [the new law]". Specifically, the new law takes the "opt-in" approach, which is similar to British anti-spam legislation. Generally speaking, the new law prohibits an individual or business located in California from initiating or advertising in unsolicited commercial e-mail advertisements. The new law prohibits an individual or business not located in California from initiating or advertising in unsolicited commercial e-mail advertisements sent to a California e-mail address. Additionally, the new law also prohibits an individual or business from collecting e-mail addresses or registering multiple e-mail addresses for the purpose of sending unsolicited commercial e-mail advertisements from California or to a California e-mail address, and from sending a commercial e-mail advertisement containing certain falsified, misrepresented, obscured or misleading information.

    Because the new California law is "opt-in", if the recipient has "provided direct consent to receive advertisements from the advertiser" or the recipient has "a preexisting or current business relationship" with the advertiser, the law does not prohibit that communication. A "preexisting or current business relationship" means "that the recipient has made an inquiry and has provided his or her e-mail address, or has made an application, purchase, or transaction...regarding products or services offered by the advertiser". The new law also requires that users be allowed to opt-out at any time.

    Senator Murray told the Los Angeles Times on October 8th of 2003 that "[w]e think [the new law] is going to be the toughest bill in the nation. The beauty of this is, you go after the advertisers. They are fineable and attachable." Some commentators believe that the burden to segregate California e-mail addresses from other e-mail addresses will be extremely difficult, if not impossible. Others believe that investigations by legitimate marketers to determine if an e-mail address is a California e-mail address will lead to reduced privacy as more personal information is uncovered. No matter the actual effect, violations of the new California law could lead to substantial monetary damages. The recipient of a commercial e-mail advertisement transmitted in violation of the new law, the electronic mail service provider or the Attorney General of the State of California is authorized to bring an action to recover actual damages and authorizes those parties to recover liquidated damages of $1,000 per transmitted message, up to One Million Dollars per incident. Furthermore, the law provides for an award of reasonable attorney's fees and costs to a prevailing plaintiff.

    Former California Governor Gray Davis said in a statement that "California is sending a clear message to Internet spammers: we will not allow you to litter the information superhighway with e-mail trash". The new anti-spam legislation is not the only step taken by the legislature of California to protect its citizens' privacy. In July 2003, the California legislature passed a law requiring a business with California residents as customers to notify its customers if any information is stolen that could lead to identity theft. The foregoing law has implications well outside of California and is expected to result in many businesses treating all of their customers as if they are residents of California. In late September 2003, the California legislature also passed a law requiring that the purchasers of automobiles that incorporate a "black box" (a device that records information on how the car is being driven prior to an automobile accident) sign a consent acknowledging that the information collected by the "black box" can be used only if there is a court order, with the owner's consent or for medical or safety research.

    Challenges to California's Anti-Spam Legislation
    Good intentions aside, many critics feel that the new California law has inherent flaws. Some believe that there is not a sufficient definition of what type of e-mail is covered. Other critics cite the expected reluctance of other states to extradite offenders to California on a mere civil charge. (Virginia's anti-spam legislation imposes criminal penalties and can lead to forfeiture of assets.) While there may be many critics of the new law, the Constitutional hurdles that will surely be raised will be its greatest obstacles.

    The first Constitutional challenge likely will be under the dormant commerce clause of the United States Constitution. Namely, the new California law may violate the exclusive right of the Federal government to regulate commerce "...among the several states...". The argument that the new California law conflicts with the ban on laws that interfere with interstate commerce is worthy of an article of its own, and will only be identified here as a legal hurdle to the new California law.

    Another Constitutional challenge that likely will be raised is that the new California law violates that First Amendment of the United States Constitution. While some legal experts have predicted that the new California law will survive such a challenge based upon prior holdings that commercial speech is less protected than private speech, which is not to say that there is no merit to the argument. Those who believe that the new law violates the First Amendment would argue that, while the speech at issue may be commercial in nature, that speech should still be afforded a degree of protection that rises to (at least) the level afforded to other forms of unsolicited advertising. Namely, they would argue that deleting an e-mail with the click of the mouse is no more burdensome or obtrusive than throwing away traditional (paper) "junk mail". The position that outlawing a form of commercial speech merely because it is commercial speech is circular and a bald attempt by legislators to appease soccer moms and NASCAR dads (i.e., their constituents) who are tired of receiving Viagra advertisements and pornography solicitations. These opponents believe that advertisers should be free to advertise, to engage in the very commerce and freedom that makes America what it is. In their view, if recipients do not wish to receive such spam, salvation is but a click away.

    The Future of Anti-Spam Legislation
    While the effect and fate of the new California anti-spam legislation is not entirely clear, most will agree that it is paving the way for the future of anti-spam legislation. Whether states will mimic the new California anti-spam legislation, or federal legislation will pre-empt California's anti-business approach, it is clear that efforts to curb the amount of spam will continue. In the meantime, legitimate advertisers will find compliance with the California anti-spam legislation difficult (if not impossible), while spammers will find their activities largely unaffected and will continue their evasive tactics.

    States with Spam Laws
    Alaska, Arizona, Arkansas, California, Colorado,
    Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa,
    Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota,
    Missouri, Nevada, New Mexico, North Carolina, North
    Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
    Island, South Dakota, Tennessee, Texas, Utah, Virginia,
    Washington, West Virginia, Wisconsin, Wyoming