A Brief Respite

As this issue went to press, President Bush signed the nation’s first federal anti-spam law — and that loud popping noise you hear is direct marketers uncorking their champagne bottles.

There is real cause for celebration. Can Spam pre-empts state laws, the strictest of which — California’s — marketers worried could have crippled e-mail marketing programs and allowed consumers to sue any e-mail sender they chose.

E-mail marketers will be choking on their bubbly, though, when they realize that the law is not going to stop spammers, nor relieve the e-mail delivery problems that plague DMers’ daily operations.

“The law is a relief, but not a panacea,” said Matt Blumberg, CEO of Return Path, which offers a service to help get e-mail through the servers.

“The big fight in 2004 will be how do I get my e-mail delivered,” added Ken Hirschman, vice president and general counsel at e-mail service provider Digital Impact.

Ben Isaacson, privacy and compliance leader at database firm Experian, agrees. “It’s status quo with deliverability,” he said.

Internet service providers, which have enforcement power under Can Spam, will be under more pressure to crack down on spammers. They will need to increase resources to work with the Federal Trade Commission and the state attorneys general.

“There’s no way to stop them with the law,” said Pat Faley Kachura, vice president of ethics and consumer affairs at the Direct Marketing Association. But with all the attorneys general following the same standard, the chance is greater of catching spammers and penalizing them harshly.

“When we see spammers being led away in handcuffs on the evening news, it will make a difference,” said Faley Kachura.

No experts claim that Can Spam is anything more than a start. Still, it will take a bit of work to bring DMers into compliance, they insist.

“I’ve heard from a number of companies that it’s just an opt-out bill and they’ll have their e-mail person look at it,” Isaacson said. “Every marketer should have their legal counsel review this law.”

(See box at right for details on the law’s provisions and penalties.)

What to focus on?

First of all, put a system in place to be sure your company is obeying Can Spam, said Faley Kachura.

The bill regulates all commercial e-mail and requires that it must include clear and conspicuous notice, somewhere in the message, that the e-mail is an advertisement or a solicitation. Sexually explicit material must be labeled.

One exception is transactional or relationship messages, such as bank statements or change in service notices, Hirschman said. The other exception is any e-mail that has a primary purpose other than the advertisement or promotion of a product or service, like an e-mail newsletter.

“You should set up a system that figures out who at your company decides whether an e-mail is commercial or transactional,” said Faley Kachura.

“It’s really important to train all your employees in what this law means and to document the process of carrying it out,” she added.

What are Experian’s clients most concerned about? Opt outs and suppression maintenance, Isaacson said.

The law requires that each message include an opt-out mechanism and that unsubscribe requests are honored within 10 days.

If a marketer rents e-mail lists, someone must ensure that the list vendor has offered the appropriate opt-out to people on the list and that the names were not harvested or acquired through dictionary attacks, Faley Kachura added.

In its list of Can Spam guidelines for marketers, Return Path warns: “You are responsible for ensuring that the list provider or e-mail sender is complying with the law.”

The bill also mandates that the Federal Trade Commission report to Congress with a plan to implement a national do-not-e-mail list this year that’s similar to the federal do-not-call list.

If the list becomes reality, “Spammers are salivating at the thought of getting their hands on it,” Hirschman said. “The list will disappear overseas in an instant and become the standard list for spamming operations worldwide.”

But there’s another issue. A federal no-spam list would make it difficult for marketers to build their lists with opt-out e-mail.

The possibility of a do-not-e-mail list should jolt such marketers into raising their standards. “Regardless of the legalities…opt-in e-mail marketing is significantly more effective than opt-out marketing,” according to Return Path.

“The law makes sure that businesses are straightforward and giving consumers a choice whether or not they receive e-mail,” Faley Kachura said.

Meanwhile, she noted, the DMA, which is against the no-spam clause, is working to influence the FTC’s regulatory efforts. “We are involved with the FTC on a daily basis,” she said.

If Can Spam is just a start and isn’t going to stop spammers anyway, what will? And, more to the point, how are e-marketers going to push their e-mail through filters this year?

In a word: technology. All the major ISPs are developing registry identity systems, and the e-mail service providers’ industry group Network Advertising Initiative is progressing on Project Lumos. The NAI project would provide a registration for legitimate e-mail senders and subject them to a performance-rating system.

“Can Spam would provide the legal teeth” to back up these efforts,” said Hirschman, who is a member of NAI.

CAN SPAM’S PROVISIONS INCLUDE:

• A requirement that e-mail senders add an opt-out mechanism to their messages. This opt-out provision must be honored within 10 days. It also must be active for a minimum of 30 days after sending the e-mail.

• A prohibition on false and deceptive headers and subject lines, so senders can be identified.

• A requirement that the physical address of the sender be displayed.

• A requirement that a message features a clear announcement, somewhere in the e-mail, that the e-mail is an advertisement or solicitation. An exception is granted if the sender already has the consumer’s permission to send them e-mail.

• A requirement that the Federal Trade Commission will report to Congress a plan to implement a do-not-spam list similar to the federal do-not-call list. If the list is approved, the FTC would implement it.

• A requirement that the FTC write rules for mandatory labeling of pornographic messages.

• A requirement that the FTC study mandatory labeling for unsolicited e-mail generally, and to study the efficacy of possible financial rewards for tech-savvy citizens to help track down hard-to-find spammers.

PENALTIES AND ENFORCEMENT INCLUDE:

• Enforcement by the Federal Trade Commission, state attorneys general and Internet service providers, with the potential for multimillion-dollar judgments.

• A tripling of monetary damages imposed on spammers who use techniques such as harvesting or dictionary attacks to glean e-mail addresses.

• Several tiers of penalties, ranging up to five years in prison for several common spamming practices, such as: hacking into someone else’s computer to send bulk spam; using open relays to send bulk spam with the intent to deceive; falsifying header information; registering five or more e-mail accounts using false registration information and using these accounts to send bulk spam; and sending bulk spam from someone else’s Internet protocol address.