What Does Can Spam Really Mean?

The Can Spam Act is very close to becoming law, and marketers don’t feel ready. They may be willing to do what it takes to comply, but the law has left things a bit blurry.

To answer some of their questions, the International Association of Privacy Professionals sponsored a conference call Wednesday. Brian Huseman, staff attorney for the FTC’s Bureau of Consumer Protection, Nicole Wong, a partner in the San Francisco law firm of Perkins Coie LLP, and Ken Hirschman, general counsel for e-mail service provider Digital Impact, addressed an audience of marketers, service providers, attorneys and privacy professionals.

FTC attorney Huseman laid out the basic ground rules under the Can Spam Act: No false or misleading header information, obligatory opt-out method, clear identification of the e-mail as an ad and of the advertiser sending it, and a valid postal address. But the devil is in the details, clearly, as the marketers posed hypothetical question after question, some of which stumped the panelists.

In fact, the FTC has a year to study and make a final ruling on the definition of “commercial electronic mail message,” the Legislature’s term for a marketing e-mail. It has 18 months to come up with a plan to label e-mail advertisements. The FTC will also look at the much-protested ten-day limit imposed on marketers for removing from their lists consumers who have opted out.

While Digital Impact’s Hirschman pointed out that ten days is a short time for marketers with several divisions or product lines, the FTC’s Huseman said, “From the information we have now, it may be too long in many instances and not provide enough protection to consumers.”

“People will have to be really careful with their unsubscribes,” Hirschman said. He pointed out that consumers believe they’re opting out of mailings from a particular advertiser, not from a list rental house. Therefore, unsubscribes that come to the list provider now will have to be transmitted back to the advertiser, in Hirschman’s opinion. “Furthermore,” he said, “once an advertiser puts a user on a suppression list, all future campaigns will have to be run through that filter.”

Perkins Coie LLP’s Wong said she didn’t believe Can Spam requires e-mail marketers to report opt-out requests to the advertiser, but she thinks it will become an industry standard. “Advertisers will demand it as a practical matter,” she said. “The need to be able to maintain clean suppression lists by both advertiser and third party sender will have to get worked out.”

Hirschman pointed out several grey areas in the legislation. He called the viral marketing issue a head-scratcher. “A fair reading,” he said, “is if you are inducing an individual to forward the e-mail to a third party, you’ll probably have to run that forwarded e-mail through your filter first, and also give the ultimate recipient the opportunity to unsubscribe.”

Attorney Wong said companies that use e-mail to communicate with customers should immediately implement policies that comply with the Act. List acquirers, she said, should make sure that all names are more than ten days old and require list providers to warrant the names weren’t harvested illegally.

Harvesting is still another tricky issue. Huseman said that the practice of “scraping” e-mail addresses from Websites without owners’ knowledge isn’t illegal itself. It only becomes so when combined with another no-no, such as a deceptive subject header.

It’s clear that marketers are still confused. The nitpickiness of some questions was based on a real fear that the law is open to too much interpretation. If a customer asks me to stop sending the newsletter, can I still e-mail their bill? Is a pre-checked box on a form enough pre-informed consent? If two advertisers team up on an offer, do both of them need consent? Do they need separate opt-out mechanisms within the e-mail? What about two different business units at the same company? What about a wholesaler that requires retailers to advertise their goods? The panelists didn’t have answers for all the questions, but Huseman said that the federal rules for telemarketing would guide the FTC’s thinking.

Marketers should be ready on January 2, 2004, Huseman said. He could not say whether or not the FTC would immediately bring cases against violations, but he said, “I would encourage everyone to make whatever mechanisms and changes they can as soon as possible.” The clock is ticking.

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