FTC Seeks Comment on Additional CAN-SPAM Rules

Latest proposed rules would, among other things, reduce the time to honor “opt out” requests from ten business days to three business days.

The CAN-SPAM Act of 2004 (the Act) was an attempt by the U.S. Congress to respond to, and provide a regulatory format for, the increasing amounts of unsolicited commercial e-mail flooding American e-mail boxes. In previous Client Alerts, we have explained how the Act, in conjunction with regulations issued by the Federal Trade Commission (FTC), regulates commercial e-mail:

• If an e-mail, as interpreted by a reasonable recipient, contains only commercial content, that e-mail must also contain (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 from the sender; and (3) a valid physical postal address of the sender.

• E-mails with both commercial and transactional content must also contain the above elements if, as interpreted by a reasonable recipient, the primary purpose of the e-mail is commercial. Key in the analysis here is the subject line of the e-mail and the placement of the transactional content in the body of the e-mail. The primary purpose of an e-mail is transactional even if it contains commercial content if the subject line would be interpreted by a reasonable recipient as transactional in nature and the transactional content of the e-mail is placed before the commercial content in the body of the e-mail.

• If an e-mail is purely commercial, or its primary purpose is commercial, the Act requires a functioning return e-mail address or similar Internet-based mechanism for recipients to “opt out” of receiving future commercial e-mail messages. Once the recipient has opted out, the Act prohibits the sender, or anyone acting on the sender’s behalf, from initiating a commercial e-mail to such a recipient more than ten business days after the recipient has opted out.

We would now like to update you on a new proposed rulemaking initiative issued by the FTC on May 12, 2005, that affects several aspects of the Act. First, The FTC proposes to change the time during which a sender must honor a recipient’s “opt out” request from ten business days to three business days. The FTC notes that current technology allows for processing such opt-out requests much more quickly than the current ten-business day time frame, and that a shorter compliance period will increase the privacy of e-mail recipients.

The FTC also proposes language to clarify the fact that an “opt out” request should not require the recipient to pay a fee, provide any additional information beyond the recipient’s email address and opt out preferences, or take any steps beyond sending a reply e-mail or visiting a web page to opt out. This is intended to stop e-mail marketers from using the opt out mechanism to collect information about recipients, to subject recipients to sales pitches before completing an opt out request, and to charge recipients a fee before honoring an opt out request.

The FTC also proposes to expand the definition of “sender” as used in the Act. The Act defines “sender” as a person who initiates an email and whose product, service or Internet website is advertised or promoted by the e-mail. The proposed addition to the definition speaks to the situation in which more than one person’s products or services are advertised or promoted in a single e-mail. In this situation, each person whose products or services are advertised or promoted shall fall into the definition of sender, except that there will be only one sender if only one person meets the Act’s definition of sender and falls into one (or more) of the following categories: (1) the person controls the content of such message; (2) the person determines the electronic e-mail addresses to which such message is sent; or (3) the person is identified in the “from” line as the sender of the message. The FTC intended these changes to clarify the fact that the Act’s definition of sender does not apply to entities that only provide a list of names or transmit a commercial e-mail message on behalf of those whose products or services are advertised in the e-mail.

The FTC also proposes to add a definition of “person” as used in the Act. Under the proposed change to the Act, the term person will be defined as an individual, group, unincorporated association, limited or general partnership, corporation, or other business entity. The FTC believes that making it clear that the term “person” is broadly construed, and not limited solely to a natural person, will advance the implementation of the Act.

Finally, the proposed changes to the Act also broaden the scope of “valid physical postal address” to include Post Office boxes and private mailboxes duly registered pursuant to the regulations of the United States Postal Service.

Beyond proposed changes to the Act, the FTC considers clarifying the application of the Act to “from” lines and a “forward to a friend” marketing campaign. In order to provide clarification on what constitutes an accurate “from” line, the FTC specifies that as long as (1) the “from” line has not been altered or concealed in a manner that would impair the ability of an ISP or a law enforcement agency to identify, locate, or respond to the person who initiated the message; and (2) the “from” line accurately identifies any person who initiated the message, the “from” line is not deceptive. In addition, the FTC encourages the sender to consider whether the subject line would confuse a reasonable recipient.

The FTC also considers whether the Act applies in a “forward to a friend” marketing campaign in which a recipient of a company’s message forwards that message to someone else. The FTC believes that the Act would only apply to the forwarded message if the sender has affirmatively acted or made an explicit statement that is designed to urge another to forward the message. Making available the means for forwarding an e-mail, such as a Web-based “click here to forward” mechanism would not likely rise to the level of this intentional inducement because this is “routine conveyance.” But, if a seller offers payment or other consideration to website visitors to use a forwarding mechanism to send commercial e-mail, that seller must make sure those forwarded messages comply with the Act.

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The FTC is seeking comment from the public on all of the points discussed above. All comments must be received by June 27, 2005. If you would like to submit comments, please contact Cynthia Larose (cjlarose@mintz.com) at 617-348-1732 or any other Mintz Levin attorney with whom you work.

Copyright © 2005 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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