Stay Compliant and Protect Your Reputation

“Stay Compliant and Protect Your Reputation” Evolution of U.S. email marketing law & survival tactics

Presenter: Kavon Adli, Esq. www.TheInternetLawGroup.com

NOTE: The information in this presentation is intended for discussion purposes only and is not intended as legal advice. Content may include unverified student researchAuthorities and opinions are strictly fact and jurisdiction-dependent and should not be applied to any situation or relied upon for any purpose without independent analysis by a licensed attorney

CAN-SPAM Act of 2003 basics

Email messages must not include false/misleading header info Commercial (i.e., non-transactional, non-relationship) email

messages must: be identified as an advertisement or solicitation and contain

warnings on sexually oriented materials (unless affirmative consent has been obtained)

include a valid physical postal address provide clear and conspicuous notice to recipients of their right

to opt-out of future emailings provide recipients with a valid return email address or other opt-

out mechanism not include a misleading subject heading

Consequences of Non-Compliance (non-exclusive):

• Government prosecutions/fines/investigations

• Lawsuits by private parties • IAS action including having access revoked

• Reputational harms

CAN-SPAM Monetary DamagesFederal – $10,000 max/unfair or deceptive act

State – Actual Loss or Statutory Damages$250 max/violation up to $2 million*

IAS – Actual Loss or Statutory Damages$25 max/violation of most requirements

$100 max/violation of false or misleading headers prohibition up to $1 million

All plaintiffs – Attorney fees and costs (at court’s discretion)

Civil Investigative Demands (or “CIDs”):

Investigative tools increasingly used by the Federal Trade Commission and state agencies to explore suspected email marketing law violations to determine if enforcement action is warranted.

Be prepared –

• Have comprehensive written compliance policies in place.

• Enforce them consistently.

Marketing Relationshipsand

Commercial Email Liability

2 main categories (underCAN-SPAM):

• “sender”• “initiator” and

“procurer” (sub-category

of initiator)

Definition of “Sender”:The term “sender” when used with respect to a commercial electronic mail message, means a person who initiates such a message and whose product, service, or Internet web site is advertised or promoted by the message. 15 USC §7702(16)(A) (emphasis added).

Definition of “Initiate”: The term "initiate", when used with respect to a commercial email message, means to originate or transmit such message or to intentionally pay or provide other consideration to, or procure the initiation or transmission of such message, but shall not include actions that constitute routine conveyance of such message. For purposes of this paragraph, more than one person may be considered to have initiated a message. 15 USC §7702(9) (emphasis added).

3 main categories of participants (non-legal):

• advertiser• emailer • intermediary

(affiliate networks or agencies)

Relationships between categories

Categories of Categoriesparticipants (bus- (underiness/non-legal): CAN-SPAM):

- advertiser - “sender”- emailer - “initiator” and - intermediary “procurer”

(affiliate networks (sub-category or agencies) of “initiator”)

“Initiate”: [T]o originate or transmit…[a commercial email] message or to intentionally pay or provide other consideration to, or induce, another person to initiate such a message on one’s behalf, but shall not include actions that constitute routine conveyance of such message. For purposes of this paragraph, more than one person may be considered to have initiated a message.

15 USC §7702(9) as modified by §7702(13) [def’n of procure] shown in italics (emphasis added).

Initiator knowledge requirement for IAS actions:

The term “procure” when used with respect to the initiation of a commercial electronic mail message, means intentionally to pay or provide other consideration to, or induce, another person to initiate such a message on one’s behalf with actual knowledge, or by consciously avoiding knowing, whether such person is engaging, or will engage, in a pattern or practice that violates this Act.

§7702(13) (as modified by §7706(g)(2) in bold/italics).

To whom does the requirement to honor opt-out requests within 10 business days apply:

1. the advertiser?2. the email marketer?3. both advertiser and email

marketer?

Best-practice compliance tip:

Include an opt-out link for the third-party email marketer in addition to the required opt-out link for the advertiser.


If you provide separate opt-out links for the third-party email marketer and advertiser, label each opt-out link in a manner that makes clear which is which.


Consider including a “Report Spam or Abuse” telephone number on your unsubscribe page.

(advertisers especially)


Process opt-outs quickly and make sure your advertisers do as well.


Implement technological solutions to CAN-SPAM compliance where appropriate.

Q: Can advertiser’s requirement to honor consumer opt-out requests impose liability on the third-party email marketer or list manager?

“If a recipient makes a request…not to receive some or any commercial electronic mail messages from such sender, then it is unlawful…for any person acting on behalf of the sender to initiate the transmission…with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message falls within the scope of the request.”

15 USC §7704(a)(4) (emphasis added).

“If a recipient opts out then it is unlawful for any person acting on behalf of the sender, or any other person who knows that the recipient has made such a request, to sell, lease, exchange, or otherwise transfer or release the electronic mail address of the recipient (including through any transaction or other transfer involving mailing lists bearing the electronic mail address of the recipient) for any purpose other than compliance with this Act or other provision of law.”

15 USC §7704(a)(4)(A)(iv) (emphasis added).

“If a recipient opts out then it is unlawful for any person acting on behalf of the sender to assist in initiating the transmission to the recipient, through the provision or selection of addresses to which the message will be sent, of a commercial email message with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message would violate §7704(a)(4)(A)(i) or §7704(a)(4)(A)(ii).”

15 USC §7704(a)(4)(A)(iii) (emphasis added).

CAN-SPAM ACT PATTERN & PRACTICE REQUIREMENTS CHART

STATUTORY VIOLATION

Participants to Which Liability Attaches Under the Act

Pat & prac required for FEDERAL GOV action?

Pat & prac reqd for STATE GOV actn?

Pat & prac reqd for non-procuremt IAS action?

Requires separate (or primary) violation?

Warning labels on sexually oriented emails requirement. §7704(d). Initiator (inclds sender*) NO NO NO NOFalse or misleading header. §7704(a)(1)(A - C). Initiator (inclds sender*) NO NO NO NODeceptive subject headings. §7704(a)(2). Initiator (inclds sender*) NO NO YES NOInclusion of return email address or opt-out mechanism. §7704(a)(3). Initiator (inclds sender*) NO YES YES NOFailure to honor opt-out requests. §7704(a)(4)(A)(i-iv). Sender and others NO YES YES NOInclusion of identifier, opt-out notice, and physical address. §7704(a)(5). Initiator (inclds sender*) NO YES YES NOEmail harvesting and dictionary attacks. §7704(b)(1). Initiator or assistor NO NO NO YESAutomated creation of multiple electronic mail accounts. §7704(b)(2). Anyone involved NO NO NO YESRelay or transmission through unauthorized access. §7704(b)(3). Anyone involved NO NO NO YES* Cannot be liable as a sender without also being an initiator

CAN-SPAM ACT MENTAL STATE REQUIREMENTS CHART

STATUTORY VIOLATION

Participants to Which Liability Attaches Under the Act

State of Mind Requirement Specific to Subsection

Mental State req'd for GOV injunctn?

State $ Damages Mental State Reqd?

Email harvesting and dictionary attacks. §7704(b)(1).

Initiator or assistor Actual knowledge, or knowledge fairly implied NO NO

Deceptive subject headings. §7704(a)(2).

Initiator (includes sender*)

Actual knowledge, or knowledge fairly implied NO NO

Failure to honor opt-out requests (initiator or list manager). §7704(a)(4)(A)(ii-iii).

Acting on behalf of sender who initiates or selects addresses

Actual knowledge, or knowledge fairly implied on basis of obj circs NO NO

False or misleading header (relayed through another computer in order to disguise origin). §7704(a)(1)(C).


KnowinglyNO NO

Relay or transmission through unauthorized access. §7704(b)(3).

Anyone involved KnowinglyNO NO

Failure to honor opt-out requests (by sale, lease, exchange, transfer or release of address). §7704(a)(4)(A)(iv).

Sender or any person who transfers or releases address

Knowledge that the recipient has made such a request NO NO

False or misleading header (email, domain or IP obtained through false pretenses, & "from" line materially false/misleading). §7704(a)(1)(A-B).


NoneYES YES

Inclusion of return email address or opt-out mechanism. §7704(a)(3).


NoneYES YES

Failure to honor opt-out requests. Sender None YES YESInclusion of identifier, opt-out notice, and physical address. §7704(a)(5).


NoneYES YES

Automated creation of multiple electronic mail accts. Anyone involved None YES YESWarning labels on sexually oriented emails requirement. §7704(d).


NoneYES YES

Fed. Gov. $ Damages Mental State Reqmt: Actual knowledge or knowl fairly implied on basis of objective circumstances that act is unfair or deceptive & is prohibitedState $ Damages Mental State Reqmt: Actual knowledge, or knowledge fairly implied on the basis of objective circs, of act or omission that constitutes the violationIAS Procurer Mental State Reqmt: Actual knowl, or by consciously avoiding knowing, whether such person is engaging, or will engage, in pat or prac that violates Act* Cannot be liable as a sender without also being an initiator

Kavon Adliwww.TheInternetLawGroup.com

[email protected]

http://www.theinternetlawgroup.com/

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Stay Compliant and Protect Your Reputation