FTC Proposes Rule Clarifications for CAN-SPAM
The Federal Trade Commission (FTC) issued a notice of proposed rulemaking and request for comments on a variety of issues relating to CAN-SPAM. This alert highlights some of these proposals, as well as other FTC initiatives contained in the notice. (Comments are due June 27, 2005; information about submitting comments is available at http://www.ftc.gov/opa/2005/05/canspamfrn.htm.)
Opt-out Requirements and Emails with Multiple Advertisers
The FTC proposed modifying the definition of “sender” to make it clear which advertiser must honor opt-out requests, provide an opt-out mechanism, and provide a physical address when there are multiple advertisers in a single commercial email. (This proposed rule is similar but not identical to the FTC’s recent staff opinion letter on multiple advertisers and emails sent to those who have opted-in to receive such emails, which was the topic of our April 2005 Alert.)
In order for a single advertiser to be considered the sender and therefore be responsible for honoring opt-out requests, providing an opt-out mechanism, and providing a physical address when there are multiple advertisers, such advertiser must
(a) Advertise or promote its own goods or services (i.e., the sender cannot be a list broker or other third-party who is involved in sending the commercial email but does not advertise in the email), and
(b) Initiate the commercial email (i.e., transmit the email or hire someone to transmit the email), and
(c) Do at least one of the following things:
(i) Control the content of the email, or
(ii) Determine the distribution list for the email, or
(iii) Be identified in the “from” line as the sender.
The sender need not do all three things listed in (c), but no other advertiser may do any of them if it does not want to be considered a “sender”. If no single advertiser satisfies 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.
Separate Lines of Business and Affiliates
The FTC also proposed that “sender” be modified to make it clear that when an entity’s separate line of business or division initiates a commercial email to advertise its own goods or services and identifies itself as a separate line of business or division, then the separate line of business or division (rather than the parent company) will be considered the sender.
The FTC also stated that advertisers who contract with others to send emails on their behalf will be considered the sender. This includes arrangements where affiliates are induced to send commercial email on behalf of a seller to drive traffic to the seller’s web site, and the affiliates are paid based on the number of individuals who ultimately purchase the seller’s products or visit the seller’s web site through referral from the affiliate. In addition, an advertiser is responsible for commercial email advertising its goods or services that is sent by affiliates or third-parties even when the advertiser does not have control over such affiliate or third-party. However, the FTC is seeking comment on whether there should be a “safe harbor” for advertisers in this situation.
Time to Process Opt-out Requests, Fees to Opt-out, and P.O. Boxes
The FTC proposed that the time in which a sender must process an opt-out request be shortened from 10 business days to 3 business days. The FTC also proposed 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. The FTC also proposed allowing P.O. boxes and private mailboxes (including a commercial mail drop) as valid physical postal addresses.
Forward-to-a-Friend Email Campaigns
In the notice, the FTC also stated its opinion on forward-to-a-friend email campaigns. A primary concern has been whether advertisers must scrub their email lists with the addresses that someone else provides for the forward-to-a-friend campaign and whether advertisers must otherwise ensure that the forwarded emails are CAN-SPAM compliant. 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. Consideration includes rewards, coupons, discounts, payments or extra sweepstakes entries.
Even if there is no consideration, an advertiser will be responsible for complying with CAN-SPAM if the advertiser 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 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.
Regarding other issues discussed in the FTC notice, the FTC declined to modify the definition of transactional or relationship message, proposed a definition of “person” to make it clear it includes businesses and not just individuals, provided some guidance about what an accurate “from” line should contain, declined to propose that an opt-out expires at some future time, and declined to propose changes to aggravated violations.
This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.