FTC Issues Final Rule on CAN-SPAM

The FTC issued its Final Rule concerning certain aspects of the CAN-SPAM Act May 12, 2008. The Final Rule: (a) allows multiple marketers to designate an otherwise legally qualified entity as the single “sender” for purposes of compliance. The sender still must comply with the opt out, identification and other requirements of the Act, but no longer must be the entity that controls all the content or determines all the email addresses to which the message will be sent. In practice, this means only the designated sender (not the other marketers) needs to honor opt-out requests, and only the designated sender needs to have a physical address in the message; (b) prohibits conditioning an opt-out request on paying a fee or providing some personal information other than an email address; (c) allows senders to use a P.O. Box as the physical address if they have accurately registered the P.O. Box with the United States Postal Service; and (d) defines the word “person” to include business entities. As part of its ruling, the FTC also refused to change the amount of time (10 business days) a sender has to comply with an opt out request from an email recipient, and also rejected putting any time limits on how long an opt-out request from a recipient would remain valid and in effect.

As part of the ruling, the FTC did spend time discussing some other areas of the CAN-SPAM Act, most notably clarifying its earlier pronouncements regarding so-called “forward-to-a-friend” emails. There are basically two versions of this activity. In the first, the “forwarder” gets a commercial email message and simply forwards it to another person, while in the second, the seller has a web page that allows visitors to give the email addresses of other persons to whom the seller should send an email. In each case, the question is whether the seller induced or procured the email that is forwarded. In other words, was there a payment, some consideration, or some other inducement that led one person to initiate or procure an email to another? The FTC has expanded on its previous definition of “inducement,” noting it doesn’t have to be explicit statements or action, but inducement may be implied or couched in terms of an offer to pay, exchange web traffic, referrals or other forms of direct or indirect consideration. Simply asking a consumer to forward an email is probably not enough, in itself, to get you in trouble, but promotions that don’t stop there should obtain legal guidance before assuming they don’t have to worry. The FTC’s discussion also makes it clear that consideration will be considered present, even if the amount is small: a coupon, entry in a sweepstakes, offering a discount—all qualify. If you are found to have induced the forwarding of messages, you will be both the “initiator” and the “sender” of the forwarded email—required to comply with CANSPAM obligations to provide a working opt out and preventing the message from further forwarding to someone else who may have previously opted out.

That said, if you have a website with a purely automated process whereby visitors, without any prodding, solicitation, payment, consideration or other inducement, can simply arrange to have emails forwarded to others AND once the forward is complete, the website doesn’t keep the email addresses of those others (for marketing or other purposes)—the FTC characterizes that as “routine conveyance,” exempt from liability under CAN-SPAM. Need help navigating the web? Call Rimon.