• FTC Defines Spam: "I know It When I See It"
  • August 25, 2004
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • Taking a page from Justice Potter Stewart's famous comment about obscenity, the Federal Trade Commission has defined spam as being in the eye of the beholder.

    As the main enforcer of the federal CAN-SPAM Act, the FTC is required by Congress to define the criteria for determining the primary purpose of an e-mail. If the primary purpose is commercial, the e-mail is subject to the new law, which went into effect January 1, 2004.

    In a notice of proposed rulemaking published August 13, FTC proposed three criteria for different types of messages. All three are based on a single principle: "Determining the primary purpose of an e-mail message must focus on what the message's recipient would reasonably interpret the primary purpose to be."

    The criteria are supposed to help e-mail senders and CAN-SPAM enforcers to distinguish between messages that are completely commercial and those that are primarily commercial even though they contain other content. If the recipient is likely to conclude from either the subject line or the body of the message that it is primarily a commercial solicitation, then it is.

    The FTC said that the standard is firmly rooted in the Commission's traditional approach to advertising: "Marketers have long been under an obligation to evaluate their advertising material from the reasonable consumer's perspective."

    The FTC is accepting public comment on the proposed rules through September 13. The deadline for final definitions is December 16.

    Pursuant to its mandate under the Act, the agency already has rejected the idea of a no-spam list similar to the popular Do-Not-Call list for telemarketers. The Commission also promulgated final rules for labeling sexually explicit spam, requiring senders to include the warning "SEXUALLY-EXPLICIT-CONTENT:" in the subject line.

    CAN-SPAM prohibits unsolicited commercial e-mail from using misleading subject lines or phony "from" addresses, and requires them to include a valid postal address and a working e-mail address for opting out of future messages.

    Significance: The industry will probably push for a more bright line test because if adopted, the FTC's proposed definitions will be sure to generate a lot of uncertainty about what defines a commercial e-mail. Despite the FTC's assurances that marketers are accustomed to evaluating their ads from the perspective of a reasonable consumer, from a factual standpoint, there is little precedent or guidance in the case law discussing the nature of commercial e-mails.