FTC Calling for Comments on Proposed CAN-SPAM Rules

By Ronald G. London
[May 2005]

On May 12, 2005 the Federal Trade Commission published a notice in the Federal Register seeking public comment on proposed new rules implementing the CAN-SPAM Act (the “Act”). The Notice follows an advance notice period that generated over 13,500 comments.

The proposed rules cover the following primary topics:

• Reduction of the amount of time for senders to honor an opt-out request
• Clarification of steps necessary to submit valid opt-out request
• Definition of “person” under the Act
• Modification of the definition of “sender” where multiple parties are involved
• Clarification of scope of definition of "valid physical postal addresses"

Substantive Changes

Under the proposed rules, the sender of a commercial email will have just three days to honor opt-out requests, rather than the current 10 days. This is a significant change to the rules and, if adopted, will require many senders of commercial email to adopt new practices in order to comply.

The proposed rules would also clarify that commercial email senders are not permitted to require recipients to take any steps beyond sending a reply e-mail or visiting a single Internet webpage, in order to submit a valid opt-out request. This means that a recipient cannot be forced to pay a fee or provide information (other than an e-mail address and opt-out preference).

Definitional Proposals

The term “person” is currently not defined in the Act, although its use therein is ubiquitous. The proposed definition states that a “person” includes “any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.” The phrase “valid physical postal address” is also undefined in the current Act, and although this term might appear straightforward, the Commission is proposing that a definition be added that would include both United States Post Office boxes as well as private mailboxes established pursuant to United States Postal Service regulations.

The most significant definitional change being proposed by the Commission is a modification to the definition of “sender” to address single emails containing advertisements from multiple parties, for purposes of determining which party or parties must comply with the Act’s opt-out provisions. The rule change would clarify that where one party fits the definition of “sender” in the Act and either controls the email’s content, determines the email addresses to which the email is sent, or is identified in the "from'' line as the sender, then only that party will be considered the sender. However, where no single party among the multiple parties whose advertisements appear in the email controls the content, determines the addressees, or is identified in the “from” line, all of the parties will be considered “senders” and therefore responsible for complying with the opt-out procedures.

Other Clarifications

One concern addressed by the Commission in the Notice but not the subject of any proposed rule is "forward-to-a-friend" email marketing, where recipients are asked to forward commercial emails to persons on their own contact list. The Commission states that the email marketer must comply with CAN-SPAM opt-out and disclosure requirements only if that marketer intentionally pays, provides consideration to, or otherwise induces another to forward the e-mail.

Finally, the Commission also addresses emails that do not fall under the Act’s prohibitions because they are either related to a specific transaction or because they are in connection with an ongoing commercial relationship between the sender and recipient. In the Notice, the Commission declines to specify how many follow-up emails a sender may transmit and avoid some of them being deemed commercial, and instead states that a reasonableness standard will apply.

The complete text of the Notice is available at the FTC’s website, www.ftc.gov. For information relating to the last round of rulemaking, please see our previous advisory, "FTC Issues Final CAN-SPAM Rule On Definition of “Commercial” Email Messages."

Legal rules and technologies change rapidly and profoundly, making it increasingly difficult for companies to successfully navigate the laws and obligations in the privacy and security arena. DWT is taking an active part in identifying and addressing potential legal issues that may affect our clients.

June 27, 2005 is the deadline for public comment on the proposed new rules and clarifications of the existing rules set forth in the Notice. If you are interested in submitting comments, or have further questions about the proposed rules, please direct any such inquiries to:

Author: Ronald G. London Washington, D.C. (202) 508-6635 RonnieLondon@dwt.com

Other DWT contacts:
Kraig Baker, Seattle, (206) 628-7619, KraigBaker@dwt.com
Thomas R. Burke, San Francisco, (415) 276-6552, ThomasBurke@dwt.com
Robert J. Driscoll, New York, (212) 603-6445, RobertDriscoll@dwt.com

This Advisory is a publication of the Privacy and Security Group of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent privacy and security developments. 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 © 2005, Davis Wright Tremaine LLP.

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