FTC Retains CAN-SPAM Act, As Ishacker image

The Federal Trade Commission recently announced that it is retaining the CAN-SPAM Act in its current form following a regulatory review of its provisions and request for public comment on three issues.

The first, whether to expand or contract the categories of messages that are treated as “transactional or relationship messages.”

The second, whether to shorten the time period for processing opt-out requests. The third, whether to specify additional activities or practices that constitute “aggravated” violations.

The Commission has now concluded that substantive modifications to the Act are not warranted.

Businesses that send commercial marketing emails bust ensure that they comply with the CAN-SPAM Act and state anti-SPAM legislation, such as California Business and Professional Code §17529.

What is the CAN-SPAM Act?

The Act became effective in 2004. It regulates the transmission of commercial email messages and authorizes the Federal Trade Commission to issue regulations concerning certain provisions of the Act. The federal CAN-SPAM Act provides rules for commercial email, gives recipients the right to have marketers stop emailing them and sets forth penalties for violations.

The Act covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites.

Business-to-business email is not exempted.

Each separate email in violation of the CAN-SPAM Act is subject to costly monetary penalties, and more than one person may be held responsible for violations.

For example, both the company whose product is promoted in the message and the company that originated the message may be legally responsible.

Email that makes misleading claims about products or services also may be subject to laws outlawing deceptive advertising, like Section 5 of the FTC Act. The CAN-SPAM Act has certain aggravated violations that may give rise to additional fines and legal consequences. Consult with an experienced email marketing and FTC defense lawyer to discuss preventative email marketing compliance strategies.

A Few of CAN-SPAM’s Requirements

For one, do not use false or misleading header information.

“From,” “To,” “Reply-To” and routing information – including the originating domain name and email address – must be accurate and identify the person or business who initiated the message.

Subject lines must accurately reflect the content of the message.

Messages should be identified as ads. There must be a clear and conspicuous disclosure that the message is an advertisement.

Recipients must be informed where you are located. Messages must include a valid physical postal address. FTC guidance states that this can a current street address, a post office box registered with the U.S. Postal Service, or a private mailbox registered with a commercial mail receiving agency established under Postal Service regulations.

Recipients must be informed how to opt-out of receiving future email. Messages must include a clear and conspicuous explanation of how the recipient can opt-out of receiving email in the future. Notices should be constructed in a way that is simple for an ordinary person to recognize, read and understand.

While creative use of type size, color, and location can improve clarity, refer to the FTC’s Dot Com Disclosure guidance. Provide a return email address or another easy Internet-based way to allow people to communicate their choice. FTC lawyers state that marketers may create a menu to allow a recipient to opt-out of certain types of messages, but they must include the option to stop all commercial messages from you. Ensure SPAM filters do not block these opt-out requests.

Opt-out requests must be honored promptly.

Any opt-out mechanism offered must be capable of being process opt-out requests for at least 30 days after you send your message. You must honor a recipient’s opt-out request within 10 business days.

No fees may be charged, nor may you require the recipient to give you any personally identifying information beyond an email address, or make the recipient take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request.

Once people have told you they do not want to receive more messages from you, you cannot sell or transfer their email addresses, even in the form of a mailing list. The only exception is that you may transfer the addresses to a company you have hired to help you comply with the CAN-SPAM Act.

Always monitor what others are doing on your behalf.

The CAN-SPAM Act makes clear that even if you hire another company to handle your email marketing, you cannot contract away your legal responsibility to comply with the law. Both the company whose product is promoted in the message and the company that actually sends the message may be held legally responsible.

Are You Covered?

Is the primary purpose of the message commercial?

Commercial content advertises or promotes a commercial product or service, including content on a website operated for a commercial purpose. Transactional or relationship content facilitates an already agreed-upon transaction or updates a customer about an ongoing transaction.

If the message contains only commercial content, its primary purpose is commercial and it must comply with the requirements of CAN-SPAM. If it contains only transactional or relationship content, its primary purpose is transactional or relationship. Of course, in that case, it may not contain false or misleading routing information, but is otherwise exempt from most provisions of the CAN-SPAM Act.

Generally speaking, the primary purpose of an email is transactional or relationship if it consists only of content that facilitates or confirms a commercial transaction that the recipient already has agreed to; gives warranty, recall, safety, or security information about a product or service; gives information about a change in terms or features or account balance information regarding a membership, subscription, account, loan or other ongoing commercial relationship; provides information about an employment relationship or employee benefits; or delivers goods or services as part of a transaction that the recipient already has agreed to.

If the message combines commercial content and transactional or relationship content, the primary purpose of the message is the deciding factor. If a recipient reasonably interpreting the subject line would likely conclude that the message contains an advertisement or promotion for a commercial product or service, or if the message’s transactional or relationship content does not appear mainly at the beginning of the message, the primary purpose of the message may be commercial.

When a message contains both kinds of content – commercial and transactional or relationship – if the subject line would lead the recipient to think it’s a commercial message, it may be a commercial message for CAN-SPAM purposes. Similarly, if the bulk of the transactional or relationship part of the message does not appear at the beginning, it may be a commercial message under the CAN-SPAM Act.

What is California Business and Professional Code §17529?

Advertiser and marketer that engage in email advertising campaigns must also be intimately familiar with various state anti-SPAM legislation, particularly California Business and Professional Code §17529.

California’s anti-SPAM legislation prohibits unsolicited commercial email sent to California email addresses, and UCE sent from California. Importantly, statute prohibits the sending of any commercial email advertisement from California or to a California electronic mail address that contains falsified, misrepresented or forged header information or which contains a subject line that a person knows would be likely to mislead a recipient about a material fact regarding the contents or subject matter of the message.

The California anti-SPAM statute is a fertile ground for email marketing litigation.

If you are interested in discussing compliance with email marketing regulations, or if you are the subject of email marketing litigation, please email the author at rnewman@hinchnewman.com

Attorney advertising. Informational purposes only. Not legal advice. Do not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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