California Spam Bill Turns Up Heat on Advertisers

The California legislature passed a stringent anti-spam bill last week that bans unsolicited commercial e-mails and gives state residents the right to sue violators for up to $1 million in damages.

The bill, SB 186, now awaits action by Gov. Gray Davis, whose signature would make the state’s anti-spam legislation among the toughest in the nation. Under California law, Davis has until Oct. 11 to sign the bill, although the turmoil over the recall vote, slated for Oct. 7, could make action come sooner.

Introduced by state Sen. Kevin Murray, the measure bans unsolicited commercial e-mail unless the sender has a business relationship with the receiver. It covers e-mail either sent from California or to California residents. Those receiving unsolicited e-mail have the right to sue for $1,000 per message, up to $1 million.

Trevor Hughes, executive director of the National Advertising Initiative’s e-mail service provider coalition, said the bill would end up in more lawsuits, not less spam.

“The public policy here is we’re trying to reduce spam,” he said. “The filter we should look at is whether we reduce spam. My sense is this won’t. It’s just going to limit and hinder an otherwise growing and robust industry” of legitimate e-mail marketers.

Hughes said the right of consumers to sue was particularly troublesome in light of the experience of Utah, which has a similar provision. There, a single law firm has resulted in more than a thousand suits against e-mail marketers with litigants hoping for a quick settlement, Hughes said.

“We’re worried that California will become Utah on steroids,” he said. “We’re worried the private cause of action will be abused by plaintiffs’ attorneys.”

A further worry for some is that Murray’s bill also targets the advertisers instead of just the senders.

“There is a need to regulate the advertisers who use spam, as well as the actual spammers, because the actual spammers can be difficult to track down due to some return addresses that show up on the display as ‘unknown’ and many others being obvious fakes and they are often located offshore,” the bill reads. “The true beneficiaries of spam are the advertisers who benefit from the marketing derived from the advertisements.”

Quinn Jalli, an executive with e-mail management company MindShare Design who advised legislators on the bill, said it was unrealistic to put such a burden (and legal liability) on advertisers.

“The bottom line is we all know the person who pushes send button should know that whoever they’re sending to is an opt-in recipient,” said “The advertiser is not always the one pushing the send button.”

The bill requires that all commercial e-mail solicitations contain a valid unsubscribe link or a toll-free number for removal from the mailing list.

It also departs from other spam bills that allow businesses to avoid penalties by showing an unsolicited e-mail was a mistake. SB 186 fines businesses $100 per mistaken e-mail up to $100,000.

The California bill would build on the current California anti-spam bill, which requires commercial e-mail to carry “ADV” or “ADV:ADLT.” California is one of 35 states with anti-spam measures on the books; Congress is debating a number of spam bills this fall.

“Our real hope is in federal legislation,” Jalli said. “This law is just emblematic of what our industry faces nationwide.”