FTC Approves New Rules Under the CAN-SPAM Act

In a long expected move, the FTC has approved four new rules under the CAN-SPAM Act of 2003. While I normally wouldn’t bore you with the minutiae of an FTC announcement, this one is important enough to our industry that I’ve copied their release in full below.

“The Federal Trade Commission has approved four new rule provisions under the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM or the Act). The provisions are intended to clarify the Act’s requirements. The provisions and the Commission’s Statement of Basis and Purpose (SBP) will be published in the Federal Register shortly.
The new rule provisions address four topics: (1) an e-mail recipient cannot be required to pay a fee, provide information other than his or her e-mail address and opt-out preferences, or take any steps other than sending a reply e-mail message or visiting a single Internet Web page to opt out of receiving future e-mail from a sender; (2) the definition of “sender” was modified to make it easier to determine which of multiple parties advertising in a single e-mail message is responsible for complying with the Act’s opt-out requirements; (3) a “sender” of commercial e-mail can include an accurately-registered post office box or private mailbox established under United States Postal Service regulations to satisfy the Act’s requirement that a commercial e-mail display a “valid physical postal address”; and (4) a definition of the term “person” was added to clarify that CAN-SPAM’s obligations are not limited to natural persons.

In addition, the SBP accompanying the final rule also addresses a number of topics that are not the subject of any new rule provisions. These include: CAN-SPAM’s definition of “transactional or relationship message”; the Commission’s decision not to alter the length of time a “sender” of commercial e-mail has to honor an opt-out request; the Commission’s determination not to designate additional “aggravated violations” under the Act; and the Commission’s views on how CAN-SPAM applies to forward-to-a-“friend” e-mail marketing campaigns, in which someone either receives a commercial e-mail message and forwards the e-mail to another person, or uses a Web-based mechanism to forward a link to or copy of a Web page to another person. The SBP explains that, as a general matter, if the seller offers something of value in exchange for forwarding a commercial message, the seller must comply with the Act’s requirements, such as honoring opt-out requests.

The new rule provisions and SBP are a follow-up to a Notice of Proposed Rulemaking (NPRM) and Advance Notice of Proposed Rulemaking (ANPR) on these and other CAN-SPAM topics that the Commission published on May 12, 2005 and March 11, 2004, respectively. The Commission received 152 comments and suggestions on the NPRM and 13,517 comments and suggestions on the ANPR from representatives of a broad spectrum of the online commerce industry, trade associations, individual consumers, and consumer and privacy advocates. The new rule provisions and SBP are based on these comments and suggestions as well as the Commission’s law enforcement experience.

The Commission vote to approve the Federal Register Notice was 4-0.” (http://www.ftc.gov/opa/2008/05/canspam.shtm)

So what’s it all mean to you, in layman’s terms?

1. Contrary to what many believed they would do, the FTC did not shorten the time frame for honoring opt-outs. For the foreseeable future it will remain at ten (10) days.

2. The FTC limited acceptable opt-out procedures to simple, one step operations, requiring no more than the user supply his or her email address and preference.
3. The FTC modified the definition of “sender” to make it easier to determine which party is responsible for complying with the Act’s opt-out provisions.
4. The FTC specifically allowed the use of a USPS PO Box, or private mailbox service as meeting the “valid physical address” requirement. (Thank goodness the legal folks won’t have to negotiate this point anymore.)

5. The definition of “person” was expanded to clarify that the Act’s provisions apply to companies as well as individuals.

These are the most important points affecting our industry. However, the Commission’s Statement of Basis and Purpose will be published in the Federal Register in the next several weeks. It will provide a lot more guidance on what the FTC was thinking when it promulgated these new rules. When those are available, I’ll review them, and let you know if there is anything additional in there providing important guidance to our industry.

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Come back to the iLegal column every week as we get specific about the rules, regulations, laws and trends that affect the online advertising industry. Each week we discuss important legal issues, talk about how to avoid the pitfalls, and cover the breaking legal and regulatory advertising industry news.

Legal Disclaimer: Information conveyed in this column is provided for informational purposes only and does not constitute legal advice. These materials do not necessarily reflect the opinions of Digital Moses, and is not guaranteed to be complete, correct, or up-to-date. The column is provided for "information purposes" only and should not be relied upon as "legal advice." This information is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this column without seeking the advice of an attorney.

Mark Meckler is the General Counsel for UniqueLeads.com, Inc., and Unique Lists, Inc. Mark is the Vice Chair of the eCommerce and Technology Committee of the Association of Corporate Counsel, and is a member of the International Association of Privacy Professionals. www.UniqueLeads.com

Copyright 2008 Mark J. Meckler