Industry Reaction Mixed to DNC Ruling

Industry reaction was mixed as it tried to understand the federal court ruling that effectively threw out the Federal Trade Commission’s national do-not-call list.

The ruling came in a lawsuit brought by the Direct Marketing Association, InfoCision Systems and other telemarketers who challenged the list, which is comprised of more than 50 million names and phone numbers of people who do not want to receive business solicitation calls.

The immediate impact of the ruling was not clear.

“The DMA and its fellow plaintiffs are grateful that the Federal District Court in Oklahoma City understood and upheld industry’s belief that the Federal Trade Commission (FTC) does not have authority to implement and enforce a national do-not-call list,” said president H. Robert Wientzen, in a statement. “The DMA, however, acknowledges the wishes of millions of U.S. consumers who have expressed their preferences not to receive telephone-marketing solicitations – as evidenced by the millions of phone numbers registered on the FTC list.”

The DMA said it will work with its attorneys, the FTC and the Federal Communications Commission over the coming days to evaluate the practical implications of the decision and its effects on marketers and consumers.

Other industry observers felt differently about the ruling.

“Not everybody in the industry is going to agree with me but I think this decision is going to exacerbate the situation,” said Marty Abrams, executive director of the Center for Information Policy Leadership at Hunton & Williams. “The do-not-call lists were what the public wanted.”

He said the industry is going to have to work harder to counteract its image of being rude and invasive of personal privacy and warned that legislation further restricting the use of personal data for marketing purposes is likely if the industry does not pay attention to the wishes of consumers.

FTC Chairman Timothy J. Muris was displeased with the decision.

“The U.S. District Court for the Western District of Oklahoma has ruled that the FTC exceeded its authority in creating the National Do Not Call Registry,” he said in a statement.

“This decision is clearly incorrect. We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls.”

According to news reports, U.S. District Judge Lee R. West sided in favor of the plaintiffs.

Although Congress gave the agency funding to run the list, it did not give the FTC specific authority to implement the list, West said. An administrative agency’s power to regulate in the public interest must “always be grounded in a valid grant of authority from Congress,” West said.

The telemarketing industry estimates that the do-not-call list could cut its business in half, costing it up to $50 billion in sales each year.

More than a dozen state with do-not-call lists plan to add their lists to the national registry this summer, the FTC said.

Telemarketers would have to check the list every three months to see who doesn’t want to be called. Those who call listed people could be fined up to $11,000 for each violation.