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FTC Issues Final CAN-SPAM Rule On Definition of “Commercial” Email Messages

By Robert J. Driscoll
[December 2004]

On December 16, 2004, the Federal Trade Commission (FTC) issued final regulations concerning the criteria to determine whether the “primary purpose” of an email is “commercial.” Because most of the provisions of the CAN-SPAM Act (the “Act”) — such as the requirement that an email message include an opt-out opportunity and disclose the sender’s valid physical postal address — apply only to messages whose primary purpose is commercial, these regulations will be of great importance to electronic marketers and others who communicate with customers by email.

As expected, the regulations confirm that an email message consisting solely of an advertisement or promotion for a commercial product or service will be deemed “commercial.” The regulations also provide that a message containing only “transactional or relationship” content (generally, information relating to a prior transaction) will not be deemed “commercial” and therefore will be exempt from most requirements of the Act. The most significant clarification concerns what the FTC refers to as “dual purpose” messages. Under the new regulations, a message containing both advertising and promotional content and transactional information generally will be deemed commercial if the advertising and promotional content dominates the subject line, or the transaction is not referenced at the beginning of the message. Messages that contain both advertising and promotional content and other non-transactional content, such as news, generally will be deemed commercial if the advertising and promotional content dominates the subject line or body of the message.

The specific criteria, as set forth in the new regulations, are as follows:

• If an email message “consists exclusively of the commercial advertisement or promotion of a commercial product or service,” then the primary purpose of the message will be deemed to be commercial;
  
  
• If an email message “contains both the commercial advertisement or promotion of a commercial product or service [and] transactional or relationship content” (which is defined separately and generally encompasses email messages containing information concerning a previously agreed-upon transaction or a product or service purchased by the recipient), the “primary purpose” of the message will be deemed to be commercial if either (i) a recipient reasonably interpreting the subject line of the message “would likely conclude that the message contains the commercial advertisement or promotion of a commercial product or service,” or (ii) the message’s transactional or relationship content “does not appear, in whole or substantial part, at the beginning of the body of the message”;
  
  
• If an email message “contains both the commercial advertisement or promotion of a commercial product or service [and] other content that is not transactional or relationship content” (such as news), the primary purpose of the message will be deemed to be commercial if either (i) a recipient reasonably interpreting the subject line of the message “would likely conclude that the message contains the commercial advertisement or promotion of a commercial product or service,” or (ii) a recipient reasonably interpreting the body of the message “would likely conclude that the primary purpose of the message is the commercial advertisement or promotion of a commercial product or service,” taking into account the placement of the commercial content within the message as a whole and the proportion of the message dedicated to commercial content; and
  
  
• If an email message contains only “transactional or relationship” content, the message will be deemed to have a “transactional or relationship” primary purpose (and thus will be exempt from most requirements of the Act).

The regulations are responsive to a Congressional directive, contained in the Act, that the FTC define the relevant criteria for determining the primary purpose of an email message. They follow a Notice of Proposed Rulemaking on this topic issued by the FTC in August 2004 and a subsequent period of public comment. The complete text of the regulations, which will take effect on February 18, 2005, is available at the FTC’s website, www.ftc.gov.

For more information, please contact:

Robert J. Driscoll New York, New York (212) 603-6445 RobertDriscoll@dwt.com

This Advisory is a publication of the Advertising & Marketing Law Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in advertising & marketing law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Copyright © 2004, Davis Wright Tremaine LLP.

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