CAN-SPAM ACT RULEMAKING

Transcription

1 CAN-SPAM ACT RULEMAKING Rachel E. Matteo-Boehm Piper Rudnick LLP 333 Market Street, Suite 3200 San Francisco, California v1

2 CAN-SPAM Act Rulemaking IAPP/TRUSTe Symposium June 10, 2004 Rachel Matteo-Boehm E-Commerce & Privacy Group Piper Rudnick LLP 1 CAN-SPAM Act of 2003 (S. 877) The CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act), Senate Bill 877, took effect on January 1, The Act largely preempts state spam laws, including the much more onerous California opt-in law that otherwise would have taken effect on the same date 2 CAN-SPAM Highlights Applies to both business-to-consumer and business-to-business communications Applies to all "commercial electronic mail messages," not just unsolicited advertising All "commercial electronic mail messages" must include opt-out information, physical postal address of sender, and indication that is an advertisement or solicitation Exception for transactional or relationship messages 10 business days to honor opt-out requests 3 1

3 CAN-SPAM Highlights, cont'd Requires labeling of sexually oriented Prohibitions against false and misleading header information and subject lines Prohibitions against hacking; fraudulent and abusive transmission practices Prohibitions against address harvesting Wireless protections 4 CAN-SPAM Highlights cont d Enforcement by Federal Trade Commission as unfair or deceptive trade practice; other federal and state agencies (e.g., FDIC, SEC, state insurance authority) given enforcement authority over entities subject to their jurisdiction State officials (principally state AGs) have enforcement authority in federal court Actual or statutory damages Statutory damages are $250 per , with a cap of $2 million ($6 million for knowing and willful violations, or aggravated violations) Attorneys fees 5 CAN-SPAM Highlights cont d ISPs may obtain actual or statutory damages against a violator who uses their system Statutory damages are $25/$100 per , with a cap of $1 million $3 million for knowing & willful violations, or aggravated violations Attorneys fees Criminal penalties for hacking; fraudulent and abusive transmission practices 6 2

4 Preemption Preempts laws expressly regulating the use of to send electronic messages Preserves state spam laws to the extent they prohibit falsity or deception in commercial e- mail Does not preempt state laws: Not specific to , such as trespass, contract and/or tort law State fraud or computer crime laws 7 Rulemakings, Reports & Studies FTC regulations re labeling of sexually oriented s (completed) FTC report to Congress on a National Do Not E- Mail Registry (underway) FTC regulations setting forth relevant criteria for determining "primary purpose" of an (underway) Possible amendments by FTC to "transactional/relationship" exemption (underway) 8 Rulemakings, Reports & Studies, Cont'd Possible changes by FTC to 10-day time frame for honoring opt-out requests (underway) FTC may designate additional activities or practices as "aggravated violations" (underway) FTC report to Congress on a bounty system for rewarding those who supply information re violations of the Act (underway) 9 3

5 Rulemakings, Reports & Studies, Cont'd Additional FTC implementing regulations (underway) FTC required to report to Congress on a plan for requiring commercial to be identified by an "ADV" or similar subject line label (underway) FCC to issue regulations to "protect wireless consumers from unwanted mobile service communications" (underway) 10 Sexually Oriented s FTC rulemaking completed Effective May 19, 2004, commercial messages that contain sexually oriented material must include the warning "SEXUALLY- EXPLICIT:" in the subject line of the 11 Do Not Registry FTC not required to implement a registry FTC is required, in a report to Congress, to set forth a plan and timetable for establishing a nationwide do-not- registry FTC consideration underway; report due no later than 6 months after S. 877 enactment 12 4

6 "Primary Purpose" Criteria CAN-SPAM requirements apply to all "commercial messages" A commercial e- mail message = "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service." FTC required to issue regulations "defining the relevant criteria to facilitate the determination of the primary purpose" of an message 13 FTC consideration underway; regulations must be issued no later than 12 months after S. 877 enactment "Primary Purpose" Criteria Rulemaking -- Issues s that have more than one purpose: how to determine whether advertisement/promotion of a product or service is the 's "primary purpose" Situations where commercial aspect of provides support for non-commercial content (i.e., electronic newsletters with advertising) Should the sender's identity make a difference in determining the "primary purpose" of an ? 14 Transactional/Relationship Exception "Transactional or relationship" s are not "commercial s." Since most of the Act's substantive provisions apply only to "commercial messages," messages falling within the "transactional or relationship" category are largely exempt from the Act FTC has discretion to expand or contract the definition of messages that fall within the "transactional or relationship" category. FTC consideration underway; no due date 15 5

7 A "transactional or relationship" message is: An message, the primary purpose of which is: to facilitate, complete, or confirm a commercial transaction that recipient has previously agreed to enter into with sender to provide warranty information, product recall information, or safety or security information with respect to a commercial product or service used or purchased by the recipient to provide certain notifications regarding a subscription, membership, account, loan, or comparable ongoing commercial relationship involving ongoing purchase or use by recipient of products or services offered by sender to provide information regarding an employment relationship or related benefit plan to deliver goods or services, including updates/upgrades 16 Transactional/Relationship Rulemaking -- Issues Are the terms used in current "transactional or relationship" categories clear? Should those categories be modified or elaborated? Some transactional or relationship messages may also advertise or promote a commercial product or service. In such a case, is the "primary purpose" of the message relevant, and what criteria should be used to determine the primary purpose of these messages? Should such messages be considered "transactional or relationship"? 17 Time For Honoring Opt-OutOut CAN-SPAM Act currently provides 10 business days for honoring opt-out requests FTC has authority to modify the 10-day period if it determines a different period is reasonable, taking into account the burdens on senders of and the interests of recipients FTC consideration underway; no due date 18 6

8 Opt-out Period -- Issues What procedures are required to remove an e- mail address from a sender's directory or lists? What costs are associated with such removal? What factors prevent deletion of an address in a time period shorter than 10 business days? How do the size and structure of the sender's business affect its ability to timely honor an optout request? 19 Designation of Additional "Aggravated Violations" Act identifies certain categories of activities as "aggravated violations" that are subject to additional penalties. FTC has authority to specify additional activities or practices that would be considered "aggravated violations" FTC consideration underway; no due date 20 Bounty System FTC required to report to Congress on a system for rewarding those who supply information re violations of the Act FTC consideration underway; report due within 9 months of S. 877 enactment 21 7

9 Additional FTC Regulations FTC has discretionary authority to issue additional regulations to implement the Act. The FTC asked for comments on several other aspects of the CAN-SPAM Act, including: Who is the "sender" of an ? Forward-to-a-friend campaigns Is a P.O. Box a "valid physical address"? FTC consideration underway; no due date 22 ADV Labeling Report FTC required to report to Congress on plan for requiring commercial messages to include the "ADV" or a comparable identifier in the subject line Report to explain any concerns causing recommendation against such a plan FTC consideration underway; report required within 18 months of S. 877 enactment 23 Wireless FCC to issue rules to protect consumers from unwanted mobile service communications Mobile commercial messages are messages transmitted directly to a wireless device FCC must define rules that will provide subscribers to commercial mobile services with ability to avoid receiving mobile service commercial messages FCC consideration underway; comments and reply comments filed; rules due within 270 days of S. 877 enactment 24 8

10 For more information contact: Piper Rudnick E-Commerce and Privacy Group Washington Office Ron Plesser, Esq. Jim Halpert, Esq San Francisco Office Rachel Matteo-Boehm, Esq