• All E-Mail Advertisers Must Review and Abide by New Federal Anti-Spam Law
  • January 16, 2004
  • Law Firm: Rutan & Tucker, LLP - Costa Mesa Office
  • The new federal law prohibits the sending of "spam" -- commercial e-mail messages -- if a recipient has requested that such messages not be sent. A "commercial e-mail message" is defined in the law as "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose)." The term does not include a "transactional or business relationship" e-mail message, the primary purpose of which is to facilitate, complete or confirm a commercial transaction or provide information such as warranty or service updates in regard to an ongoing commercial relationship involving the recipient.

    Under the new law all commercial e-mail messages must now include:

    (1) "clear and conspicuous" identification that the message is an advertisement or solicitation;

    (2) "clear and conspicuous" notice of the opportunity to decline to receive further commercial e-mail messages through a reply e-mail message or other Internet-based mechanism, such as an "unsubscribe" return e-mail process or other "opt-out" mechanism, which must be available for not less than 30 days after the commercial e-mail message was sent; and

    (3) the valid physical postal address of the sender. If the recipient responds to the e-mail message indicating that he or she does not wish to receive any more commercial e-mail messages, the sender must cease the transmission of any further commercial e-mail messages within 10 business days after the receipt of such response.

    The new law requires that header, subject line and sender identification information of commercial e-mail messages and e-mails containing a transactional or business relationship message not be materially false or misleading. Mandatory labeling of e-mail messages using specific designations, such as "ADV" for advertising, may be required by regulations to be issued by the Federal Trade Commission under the law sometime within the next 18 months. The law also prohibits automated collection of e-mail addresses from the Internet (also known as "address harvesting") under false pretenses and generating e-mail addresses using an automated process that combines names, letters or numbers into numerous permutations.

    The law excepts ads sent to those who have made an inquiry or consented to receive the message in response to a "clear and conspicuous" request for such consent and who have provided their e-mail address for the purpose of receiving commercial e-mail messages from the sender. The law also does not apply to those who merely provide routine e-mail conveyance services, such as Internet service providers (ISPs) or operators of telecom systems used by a spammer, unless the ISP or carrier knowingly participates in the sending of the unsolicited ads (e.g. by making available software intended to facilitate spamming).

    The new federal law also criminalizes various deceptive spamming practices, such as using someone else's computer system to send bulk spam, using false information to register for multiple e-mail accounts from which to send bulk spam, using false header information, sending multiple e-mail messages with the intent to deceive or mislead recipients as to the origin of the message, and sending bulk spam from someone else's Internet protocol address. In addition to civil penalties, the new law includes criminal provisions of up to five years in prison for spammers who engage in such deceptive practices.

    Although Internet access service providers may sue under the new law, it does not provide for a private right of action by recipients of spam. The new law sets a maximum civil penalty of $2 million, but also provides for treble damage awards for knowing and willful violations of the law and for certain specified "aggravating" violations of the law.

    Also significant in the law is the inclusion of a directive to the FTC to establish a plan for a federal "do-not-spam" list similar to their "do-not-call" registry. However, the FTC has indicated that it opposes the idea because such a list could not be properly secured, and the law gives the FTC six months to show Congress why such a list would not work.

    Although the federal anti-spam law pre-empts existing state anti-spam laws, including the recently enacted California anti-spam law, it still permits states to establish tougher penalties for spammers under their anti-fraud laws. The new law also does not affect the adoption, implementation or enforcement by Internet access providers of any policy declining to transmit, route, relay, handle or store certain types of e-mail messages.

    In the face of this new federal law, businesses and individuals who use e-mail to contact existing or potential customers need to review their practices and policies. Pending new FTC regulations or court cases to clarify the terms and concepts of the new law, there are several steps advertisers need to take immediately:

    (1) Where possible, advertisers should not merely rely on an implied consent arising out of prior e-mail communications, but should have specific confirmation from each recipient that he or she desires to receive e-mail advertisements from the sender.

    (2) The header and subject line of each commercial e-mail should clearly indicate the nature of the communication as an advertisement or solicitation.

    (3) Even where a pre-existing business relationship with the client exists and/or an affirmative consent to contact the client by e-mail has already been established, the e-mail must include an "opt-out" clause in the e-mail message that contains the valid physical address of the sender and an e-mail reply procedure (such as an "unsubscribe" hyperlink in the e-mail) whereby the recipient can notify the sender that he or she does not want to receive any further commercial e-mail messages.

    (4) If a third party service provider is transmitting commercial e-mail messages and/or has obtained or generated any recipient list for an advertiser, the advertiser should obtain confirmation from the third party that the transmission of such messages and/or the collection or generation of the recipient list is in full compliance with the CAN-SPAM Act of 2003.

    Failure to comply with the requirements of the new federal anti-spam law could result in significant monetary judgments and criminal prosecution against the advertiser and sender of any such commercial e-mail ads.