[Federal Register: January 19, 2005 (Volume 70, Number 12)]
[Rules and Regulations]
[Page 3109-3129]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja05-13]
[[Page 3109]]
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Part II
Federal Trade Commission
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16 CFR Part 316
Definitions and Implementation Under the CAN-SPAM Act; Final Rule
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FEDERAL TRADE COMMISSION
16 CFR Part 316
[Project No. R411008]
RIN 3084-AA96
Definitions and Implementation Under the CAN-SPAM Act
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Trade Commission (``FTC'' or
``Commission'') issues its Statement of Basis and Purpose and final
Rule pursuant to the requirement imposed by the Controlling the Assault
of Non-Solicited Pornography and Marketing Act of 2003 (``CAN-SPAM'' or
``the Act'') for the Commission, not later than 12 months after
December 16, 2003, to ``issue regulations pursuant to section 7711 [of
the Act] defining the relevant criteria to facilitate the determination
of the primary purpose of an electronic mail message.''
EFFECTIVE DATE: May 19, 2004, except for Sec. 316.3, which will become
effective on March 28, 2005.
ADDRESSES: Requests for copies of the ``primary purpose'' provisions of
the Rule and the Statement of Basis and Purpose should be sent to
Public Records Branch, Room 130, Federal Trade Commission, 600
Pennsylvania Avenue, NW., Washington, DC 20580. Copies of these
documents are also available at the Commission's Web site: http://www.ftc.gov
.
FOR FURTHER INFORMATION CONTACT: Michael Goodman, Staff Attorney, (202)
326-3071; or Catherine Harrington-McBride, Staff Attorney, (202) 326-
2452; Division of Marketing Practices, Bureau of Consumer Protection,
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC
20580.
SUPPLEMENTARY INFORMATION: The ``primary purpose'' provisions of the
Rule implement the CAN-SPAM Act by defining the relevant criteria to
determine the primary purpose of an electronic mail message. These
provisions describe types of electronic mail messages that contain
commercial content or what the Act terms ``transactional or
relationship'' content, and establish different criteria for each type.
These provisions also clarify that the definitions of certain terms
taken from the Act and appearing in the Rule are prescribed by
particular referenced portions of the Act. The Rule also includes a
severability provision that provides that if any portion of the Rule is
found to be invalid, the remaining portions will survive.
Statement of Basis and Purpose
I. Background
A. CAN-SPAM Act of 2003
On December 16, 2003, the President signed into law the CAN-SPAM
Act.\1\ The Act, which took effect on January 1, 2004, imposes a series
of new requirements on the use of commercial electronic mail (``e-
mail'') messages. In addition, the Act gives Federal civil and criminal
enforcement authorities new tools to combat commercial e-mail that is
unwanted by the recipient and/or deceptive. The Act also allows state
attorneys general to enforce its civil provisions, and creates a
private right of action for providers of Internet access service.
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\1\ 15 U.S.C. 7701-7713.
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In enacting the CAN-SPAM Act, Congress made the following
determinations of public policy, set forth in section 7701(b) of the
Act: (1) There is a substantial government interest in regulation of
commercial electronic mail on a nationwide basis; (2) senders of
commercial electronic mail should not mislead recipients as to the
source or content of such mail; and (3) recipients of commercial
electronic mail have a right to decline to receive additional
commercial electronic mail from the same source.
Based on these policy determinations, Congress, in section 7704(a)
and (b) of the CAN-SPAM Act, outlawed certain commercial e-mail acts
and practices. Section 7704(a)(1) of the Act prohibits transmission of
any e-mail that contains false or misleading header or ``from'' line
information. Section 7704(a)(1) also clarifies that a header will be
considered materially misleading if it fails to identify accurately the
computer used to initiate the message because the person initiating the
message knowingly uses another protected computer to relay or
retransmit the message in order to disguise its origin.\2\ The Act also
prohibits false or misleading subject headings in commercial e-mail
messages.\3\ It requires a functioning return e-mail address or similar
Internet-based mechanism for recipients to use to ``opt out'' of
receiving future commercial e-mail messages,\4\ and prohibits the
sender, or others acting on the sender's behalf, from initiating a
commercial e-mail to a recipient more than 10 business days after the
recipient has opted out.\5\ In addition, the Act prohibits sending a
commercial e-mail message without providing three disclosures: (1)
Clear and conspicuous identification that the message is an
advertisement or solicitation, (2) clear and conspicuous notice of the
opportunity to decline to receive further commercial e-mail messages
from the sender, and (3) a valid physical postal address of the
sender.\6\ Finally, the Act specifies four ``aggravated violations''--
practices that compound the available statutory damages when alleged
and proven in combination with other CAN-SPAM violations.\7\
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\2\ 15 U.S.C. 7704(a)(1).
\3\ 15 U.S.C. 7704(a)(2).
\4\ 15 U.S.C. 7704(a)(3).
\5\ 15 U.S.C. 7704(a)(4).
\6\ 15 U.S.C. 7704(a)(5).
\7\ 15 U.S.C. 7704(b). The four such practices set forth in the
statute are: Address harvesting, dictionary attacks, automated
creation of multiple e-mail accounts, and relaying or retransmitting
through unauthorized access to a protected computer or network. The
Act's provisions relating to enforcement by the States and providers
of Internet access service create the possibility of increased
statutory damages if the court finds a defendant has engaged in one
of the practices specified in section 7704(b) while also violating
section 7704(a). Specifically, sections 7706(f)(3)(C) and (g)(3)(C)
permit the court to increase a statutory damages award up to three
times the amount that would have been granted without the commission
of an aggravated violation. Sections 7706(f)(3)(C) and (g)(3)(C)
also provide for this heightened statutory damages calculation when
a court finds that the defendant's violations of section 7704(a)
were committed ``willfully and knowingly.''
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The Act authorizes the Commission to enforce violations of the Act
in the same manner as an FTC trade regulation rule.\8\ Section 7706(f)
authorizes the attorneys general of the States to enforce compliance
with certain provisions of section 7704(a) of the Act by initiating
enforcement actions in Federal court, after serving prior written
notice upon the Commission when feasible.\9\ CAN-SPAM also authorizes
providers of Internet access service to bring a Federal court action
for violations of certain provisions of section 7704(a), (b), and
(d).\10\
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\8\ Sections 7706(a) and (c) of the CAN-SPAM Act provide that a
violation of the Act shall be treated as a violation of a rule
issued under section 18(a)(1)(B) of the FTC Act. 15 U.S.C.
57a(a)(1)(B).
\9\ 15 U.S.C. 7706(f). Specifically, the state attorneys general
may bring enforcement actions for violations of section 7704(a)(1),
7704(a)(2), or 7704(d). The states may also bring an action against
any person who engages in a pattern or practice that violates
section 7704(a)(3), (4), or (5).
\10\ 15 U.S.C. 7706(g). Section 7704(d) of the Act requires
warning labels on commercial e-mail messages containing sexually
oriented material. 15 U.S.C. 7704(d). In April, 2004, the Commission
promulgated its final rule regarding such labels: ``Label for e-mail
Messages Containing Sexually Oriented Material'' (``Sexually
Explicit Labeling Rule''). 69 FR 21024 (Apr. 19, 2004). The
Commission is integrating the provisions of that existing rule into
the final Rule announced in this Federal Register Notice,
renumbering certain provisions as follows: former 316.1(a) and (b)
appear at 316.4(a) and (b) in the final Rule; former 316.1(c)
[definitions] appears at 316.2 in the final Rule; and former
316.1(d) [severability] appears at 316.5 and applies to the entire
final Rule, not only the Sexually Explicit Labeling Rule provisions.
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Congress directed the Commission to issue regulations, not later
than 12 months after December 16, 2003, ``defining the relevant
criteria to facilitate the determination of the primary purpose of an
electronic mail message.'' \11\ The term ``primary purpose'' is
incorporated in the Act's definition of the key term ``commercial
electronic mail message.'' Specifically, ``commercial electronic mail
message'' encompasses ``any electronic mail message the primary purpose
of which is the commercial advertisement or promotion of a commercial
product or service (including content on an Internet Web site operated
for a commercial purpose).'' \12\ In addition to the mandatory
rulemaking regarding the determination of an e-mail message's ``primary
purpose,'' CAN-SPAM also provides discretionary authority for the
Commission to issue regulations concerning certain of the Act's other
definitions and provisions.\13\
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\11\ 15 U.S.C. 7702(2)(C). The Act authorizes the Commission to
use notice and comment rulemaking pursuant to the Administrative
Procedures Act, 5 U.S.C. 553, 15 U.S.C. 7711.
\12\ 15 U.S.C. 7702(2)(A) (emphasis supplied). The term
``primary purpose'' is also used in the Act's definition of
``transactional or relationship message.'' 15 U.S.C. 7702(17).
\13\ 15 U.S.C. 7702(17)(B); 7704(c)(1)(A)-(C); 7704(c)(2);
7711(a).
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B. Advance Notice of Proposed Rulemaking
On March 11, 2004, the Commission published an Advance Notice of
Proposed Rulemaking (``ANPR'') that solicited comment on a number of
issues raised by the CAN-SPAM Act, most importantly, the definition of
``primary purpose.'' \14\ In addition, the ANPR requested comment on
the CAN-SPAM issues over which the Commission has discretionary
rulemaking authority.\15\ In response to the ANPR, the Commission
received more than 13,500 comments from representatives from a broad
spectrum of the online commerce industry, trade associations,
individual consumers, and consumer and privacy advocates.\16\
Commenters generally applauded CAN-SPAM as an effort to stem the flood
of unsolicited and deceptive commercial e-mail messages that has
threatened the convenience and efficiency of online commerce.
Commenters also offered several suggestions for the Commission's
consideration in drafting regulations to implement the Act, including
the definition of ``primary purpose.''
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\14\ 69 FR 11776 (Mar. 11, 2004).
\15\ The ANPR also solicited comment on questions related to
four reports that the Commission must submit to Congress: a report
on establishing a ``Do Not e-mail'' registry that was submitted on
June 15, 2004; a report on establishing a system for rewarding those
who supply information about CAN-SPAM violations that was submitted
on September 16, 2004; a report setting forth a plan for requiring
commercial e-mail messages to be identifiable from their subject
line to be submitted by June 16, 2005; and a report on the
effectiveness of CAN-SPAM to be submitted by December 16, 2005. The
comments related to the ``Do Not e-mail'' registry and the reward
system are discussed in the Commission's June 15, 2004, and
September 16, 2004 reports. The Commission will consider the
relevant comments received in response to the ANPR in preparing the
remaining reports.
\16\ Comments that were submitted in response to the March 11,
2004, ANPR are available on the Commission's Web site at the
following address: http://www.ftc.gov/os/comments/canspam/index.htm.
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C. Notice of Proposed Rulemaking
On August 13, 2004, the Commission published a Notice of Proposed
Rulemaking (``NPRM'') proposing criteria to facilitate the
determination of the primary purpose of an e-mail message.\17\ In the
NPRM, the Commission proposed rule provisions to divide all types of e-
mail messages containing ``commercial'' content \18\ into three
categories: (1) Messages that contain only commercial content, (2)
messages that contain both commercial content and content that falls
within one of the categories listed in section 7702(17)(A) of the Act
(``transactional or relationship content''), and (3) messages that
contain both commercial content and content that is neither commercial
nor ``transactional or relationship.'' Messages in the first category
were considered ``single-purpose messages.'' The second and third
categories were considered ``dual-purpose messages.'' For each of these
categories, the Commission proposed different criteria for determining
when the ``primary purpose'' of such messages was commercial.
In response to this NPRM, the Commission received 226 comments from
e-mail marketers and their associations, e-mail recipients, and others
interested in CAN-SPAM's application to e-mail messages.\19\ Based upon
the entire record in this proceeding, the final ``primary purpose''
Rule provisions the Commission hereby adopts are very similar to the
proposed Rule provisions. The final Rule provisions, however, contain
some minor changes from the proposed Rule provisions. These
modifications, discussed in detail below, are based upon the
recommendations of commenters and careful consideration of relevant
First Amendment law. Commenters' recommendations that the Commission
has declined to adopt in its final Rule are also discussed, along with
the Commission's reasons for rejecting them.\20\
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\17\ 69 FR 50091 (Aug. 13, 2004).
\18\ Based on the Act's definition of the term ``commercial
electronic mail message,'' the NPRM proposed that content is
``commercial'' if it advertises or promotes a product or service.
See 15 U.S.C. 7702(2)(A).
\19\ Approximately 75 of these comments were submitted by
industry representatives, 56 were submitted by consumers, and 3 were
submitted by privacy groups. The remaining comments were form
letters or other duplicate submissions. Appendix A is a list of the
commenters and the acronyms used to identify each commenter who
submitted a comment in response to the August 13, 2004, NPRM. These
comments are available on the Commission's web site at the following
address: http://www.ftc.gov/os/comments/canspam2/index.htm.
References to comments are cited by the commenter's acronym.
\20\ In response to the August, 13, 2004, NPRM, many commenters
addressed issues relating to the Commission's discretionary
rulemaking authority, in addition to addressing ``primary purpose''
rulemaking. The Commission is currently reviewing the comments
addressing issues of discretionary rulemaking and is reserving
action on those issues until a later time.
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II. Discussion of the Final Rule
A. Section 316.1--Scope of Regulations
Section 316.1 of the final Rule states, ``[t]his part implements
the Controlling the Assault of Non-Solicited Pornography and Marketing
Act of 2003 (`CAN-SPAM Act' [or `the Act']), 15 U.S.C. 7701-7713.'' A
number of commenters requested express findings that CAN-SPAM does not
apply to their e-mail messages.\21\ Section 7706(d) of the CAN-SPAM Act
makes clear that the Commission has only the same jurisdiction and
power under the Act as it has under the FTC Act.\22\ The CAN-
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SPAM Act does not expand or contract the Commission's jurisdiction or
the scope of the final Rule's coverage. Limits on the FTC's
jurisdiction, however, do not affect the ability of other Federal
agencies, the States, or providers of Internet access service to bring
actions under the Act against any entity within their jurisdiction as
authorized.\23\ Thus, many persons and entities not within the FTC's
jurisdiction may still be subject to an enforcement action for
violating the CAN-SPAM Act.
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\21\ See, e.g., ASAE; Incentive; NADA; AAMFT; DMA-NF (regarding
messages from nonprofit organizations); and ACA (regarding debt
collection messages). In addition, Experian stated that the
regulations' scope is tied to the definition of the term ``sender,''
and requested clarification of that term with respect to compliance
obligations of multiple advertisers in a single commercial e-mail
message. In the ANPR, the Commission sought comment on the issue of
multiple-sender liability, which it identified as one possible area
of discretionary rulemaking under section 7711 of the Act. The
Commission staff is currently reviewing comments addressing the
multiple-sender issue, as well as all comments on all other possible
issues that fall within the Commission's discretionary CAN-SPAM
rulemaking authority, and is reserving action on these issues until
later.
\22\ Under 5(a)(2) of the FTC Act, the Commission lacks
jurisdiction over ``banks, savings and loan institutions described
in section 18(f)(3) [of the FTC Act], Federal credit unions
described in section 18(f)(4) [of the FTC Act], common carriers
subject to the Acts to regulate commerce, air carriers and foreign
air carriers subject to the Federal Aviation Act of 1958, and
persons, partnerships, or corporations insofar as they are subject
to the Packers and Stockyards Act, 1921, as amended, except as
provided in Section 406(b) of said Act.'' 15 U.S.C. 45(a)(2)
(footnotes omitted). In addition, the FTC does not have jurisdiction
over any entity that is not ``organized to carry on business for its
own profit or that of its members.'' 15 U.S.C. 44. Finally, the FTC
does not have jurisdiction over the business of insurance to the
extent that such business is regulated by State law. See section 2
of the McCarran-Ferguson Act, 15 U.S.C. 1012(b).
\23\ Section 7706(b) and (c) of the CAN-SPAM Act authorize
Federal agencies other than the FTC to enforce the Act against
various entities outside the FTC's jurisdiction.
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B. Section 316.2--Definitions
The proposed Rule included definitions of a number of key terms,
nearly all of which were defined by references to the corresponding
sections of the Act. These terms include: ``affirmative consent,''
``commercial electronic mail message,'' ``electronic mail address,''
``initiate,'' ``Internet,'' ``procure,'' ``protected computer,''
``recipient,'' ``routine conveyance,'' ``sender,'' ``sexually oriented
material,'' and ``transactional or relationship message.'' \24\ An
additional term, ``character,'' not defined in the Act, had been
defined in the Commission's Sexually Explicit Labeling Rule proceeding,
and was included in the proposed Rule with the same definition it had
been given in that earlier proceeding.\25\
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\24\ Proposed Rule 316.2(a), (c)-(n).
\25\ Proposed Rule 316.2(b).
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In the NPRM, the Commission set forth its rationale for defining by
reference those definitions included in both the Act and the Rule,
stating ``that by referencing the definitions found in the Act, and any
future modifications to those definitions, the Rule will accurately and
effectively track any future changes made to the definitions in the
Act.'' \26\
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\26\ 69 FR at 50094.
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None of the small number of the NPRM comments concerning the
definitions challenged the Commission's proposal to incorporate by
reference definitions included in the Act. Several commenters urged
modifications that the Commission theoretically could effectuate under
the discretionary rulemaking authority of section 7711 of the Act.\27\
The largest number of comments on this section urged the Commission
explicitly to exempt messages from not-for-profit entities from the
definition of ``commercial electronic mail message.'' \28\ It is
possible that a message from a nonprofit could meet the definition of
``commercial electronic mail message'' (e.g., an e-mail message sent by
a nonprofit hospital offering medical screening in exchange for a fee).
There is no reason that recipients of such an e-mail message should
forfeit the protections afforded by CAN-SPAM. Moreover, it is
possible--or even likely--that messages between a nonprofit and its
members could constitute ``transactional or relationship messages''
under section 7702(17)(A)(v).\29\ Thus, the Commission does not believe
there is adequate basis or need to create an across-the-board exemption
for e-mail messages initiated by nonprofit entities.
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\27\ A handful of comments touched on the definition of
``sender,'' advocating clarification of the multiple-sender issue
raised in the ANPR. Experian; NRF; Adknowledge (alternatively
recommending clarification of the definition of ``transactional or
relationship message''); ESPC (recommending that the definition of
``sender'' be addressed in this proceeding because the term is
related to the ``standard associated with primary purpose''). MBA
recommended that the Commission ``explicitly state that verbal
consent is sufficient to comply with the definition of ``affirmative
consent'' and that definition's requirement for a ``clear and
conspicuous'' requirement.'' Baker urged the Commission to expressly
define expiration/renewal notices as transactional. As noted in the
NPRM, the Commission anticipates addressing issues of discretionary
rulemaking, including the definitions of the terms ``sender,''
``affirmative consent,'' and ``transactional or relationship
message'' in a future Federal Register notice, and does not address
them here.
\28\ See, e.g., AE; Incentive; Independent (requesting
clarification in the definition of ``transactional or relationship
messages'' that e-mails sent by a nonprofit to its base constituency
will not be considered commercial e-mail); ASAE; AAMFT; NAEDA.
\29\ These messages will only be considered ``commercial
electronic mail messages,'' and thus subject to greater regulation
than transactional or relationship messages, if (1) a recipient
reasonably interpreting the subject line of the message would likely
conclude that the message advertises or promotes a commercial
product or service, or (2) the transactional or relationship content
does not appear, in whole or in substantial part, at the beginning
of the body of the message.
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A few comments suggested definitions of the term ``spam.'' \30\ In
the CAN-SPAM Act, Congress set forth a regulatory scheme built around
the defined terms ``commercial electronic mail message'' and
``transactional or relationship message.'' Because this structure is
provided in the Act, it is unnecessary to define the term ``spam'' in
the context of this rulemaking, and the Commission declines to do so.
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\30\ Schomaker; Cleaver; Anonymous; Dickert.
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ECFCU, without offering any definition of its own, recommended that
the Commission define the phrase ``reasonably interpreting,'' used in
section 316.3 of the Rule, ``to alleviate different interpretations of
this term.'' \31\ The Commission believes that definition of this
phrase is unnecessary as the plain language is sufficiently clear,
especially in light of the fact that a ``reasonableness'' standard is a
basic legal concept that is broadly understood.\32\ Finally, two
commenters, CIPL and Experian, asked the Commission to add definitions
of the terms ``advertisement'' and ``promotion,'' which are used in the
Act's definition of ``commercial electronic mail message.'' The
Commission believes these terms are sufficiently clear and declines to
add definitions of these terms.
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\31\ ECFCU.
\32\ See, e.g., the reasonableness element of the Commission's
deception standard as articulated in Cliffdale Assocs., Inc.,
(Deception Statement) 103 F.T.C. 110 (1984): ``We examine the
practice from the perspective of a consumer acting reasonably in the
circumstances.''
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C. Section 316.3--Primary Purpose Criteria: Four Categories of e-mail
Messages With Distinct Criteria for Each
As noted above, section 7702(2)(C) of the CAN-SPAM Act directs the
Commission to ``issue regulations pursuant to section 7711 of this
[Act] defining the relevant criteria to facilitate the determination of
the primary purpose of an electronic mail message.'' The term ``primary
purpose'' comes into play in the Act's definition of ``commercial
electronic mail message,'' which is ``any electronic mail message the
primary purpose of which is the commercial advertisement or promotion
of a commercial product or service (including content on an Internet
Web site operated for a commercial purpose).'' \33\ Section 7702(2)(B)
expressly excludes from the Act's definition of ``commercial electronic
mail message'' messages that meet the definition of ``transactional or
relationship message,'' \34\ which also
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incorporates the term ``primary purpose.'' Generally, CAN-SPAM applies
only to messages that fall within the Act's definition of ``commercial
electronic mail message.'' \35\
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\33\ 15 U.S.C. 7702(2)(A) (emphasis supplied). The Commission's
authority to establish ``primary purpose'' criteria does not include
the authority to modify the Act's definition of ``commercial.''
\34\ Section 7702(17)(A) of the Act defines a ``transactional or
relationship message'' as ``an electronic mail message the primary
purpose of which is--
(i) To facilitate, complete, or confirm a commercial transaction
that the recipient has previously agreed to enter into with the
sender;
(ii) To provide warranty information, product recall
information, or safety or security information with respect to a
commercial product or service used or purchased by the recipient;
(iii) To provide--
(I) Notification concerning a change in the terms or features
of;
(II) Notification of a change in the recipient's standing or
status with respect to; or
(III) At regular periodic intervals, account balance information
or other type of account statement with respect to, a subscription,
membership, account, loan, or comparable ongoing commercial
relationship involving the ongoing purchase or use by the recipient
of products or services offered by the sender;
(iv) To provide information directly related to an employment
relationship or related benefit plan in which the recipient is
currently involved, participating, or enrolled; or
(v) To deliver goods or services, including product updates or
upgrades, that the recipient is entitled to receive under the terms
of a transaction that the recipient has previously agreed to enter
into with the sender.''
\35\ One provision, section 7704(a)(1), which prohibits false or
misleading transmission information, applies equally to ``commercial
electronic mail messages'' and ``transactional or relationship
messages''; otherwise, CAN-SPAM's prohibitions and requirements
cover only ``commercial electronic mail messages.''
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In the August 13, 2004, NPRM, the Commission's proposed criteria to
facilitate the determination of when an e-mail message has a commercial
primary purpose contemplated three categories of e-mail messages
containing ``commercial'' content and applied different criteria to
each category. The three categories proposed were: (1) e-mail messages
that contain only commercial content, (2) e-mail messages that contain
both commercial content and content that falls within one of the
categories listed in section 7702(17)(A) of the Act (``transactional or
relationship content''),\36\ and (3) e-mail messages that contain both
commercial content and content that is neither commercial nor
``transactional or relationship.'' The first category covered those e-
mail messages with only commercial content--``single-purpose
messages.'' The second and third categories covered ``dual-purpose
messages.'' Commenters supported the proposal's distinction between
single-purpose and dual-purpose e-mail messages, and between the two
types of dual-purpose e-mail messages.\37\ The Commission retains the
three categories of messages containing commercial content in the final
Rule's primary purpose criteria, and adds a fourth category--e-mail
messages containing only transactional or relationship content--and
provides a criterion for determining the primary purpose of such e-mail
messages.\38\
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\36\ See note 34 above.
\37\ See, e.g., AAM (with some reservations); BMI; CASRO; ICOP;
Reed; SIIA (asking for more guidance). But see Adknowledge; SIA;
State Farm (claiming that the proposal's distinctions are
inconsistent with the text of the Act and could result in improper
regulation of messages that should be outside the scope of the Act).
Other commenters argued that one standard should apply to all dual-
purpose messages. See, e.g., DoubleClick; ESPC.
\38\ See NBC; NetCoalition; NRF (advocating criteria for
messages containing only transactional or relationship content). The
Commission declines to adopt a fifth category for messages
containing commercial content, transactional or relationship
content, and content that is neither commercial nor transactional or
relationship. See Experian; NBC. The criteria for messages
containing both commercial and transactional or relationship content
apply to messages of this type.
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The final Rule, however, slightly modifies the proposed Rule's
description of what constitutes ``commercial'' content. Under the
proposed Rule, ``commercial content'' was described as ``content that
advertises or promotes a product or service.'' \39\ This description is
based on the Act's definition of ``commercial electronic mail
message.'' Under the Act's definition, a commercial e-mail message is
an e-mail message ``the primary purpose of which is the commercial
advertisement or promotion of a commercial product or service
(including content on an Internet Web site operated for a commercial
purpose).'' \40\ The key concept from the Act's definition--does the e-
mail message advertise or promote a product or service?--was
incorporated in the proposal but the repeated references to the term
``commercial'' were omitted.
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\39\ Proposed Rule 316.3(a)(1). 69 FR at 50106.
\40\ 15 U.S.C. 7702(2)(A) (emphasis supplied).
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Three commenters argued that the Commission had erred in dropping
these additional inclusions of the term ``commercial'' from its
proposed criteria, and urged the Commission to rectify this in its
final Rule.\41\ These commenters claimed that failing to include these
references from the text of the Act could inappropriately broaden the
scope of the Act by including individuals sending one e-mail message
one time to a single recipient to sell a personal item.\42\ These
commenters also argued that omitting the word ``commercial'' would
improperly bring within the Act's reach ``electronic mail messages that
do not promote commercial products or services,'' such as messages from
trade groups promoting seminars or other gatherings.\43\ Contrary to
these commenters' views, however, CAN-SPAM may apply to a trade
association's e-mail messages promoting a seminar because a seminar may
be considered a ``commercial product or service'' if attendees must pay
an admission charge. Nevertheless, as will be discussed in detail
below, a trade association's e-mail messages to its members or donors
are likely ``transactional or relationship messages'' under the Act
even if the messages consist primarily of the commercial advertisement
or promotion of a commercial product or service. Commenters offered no
other situations where adding the word ``commercial'' before
``advertisement or promotion'' and ``product or service'' alters the
definition proposed in the NPRM.
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\41\ See MPAA; Schwartz; SIA. In addition, many comments
submitted by nonprofit entities argued that the Act's repeated
references to ``commercial'' in the ``commercial electronic mail
message'' definition reflect Congress's intent to exempt messages
from nonprofits. See, e.g., AE; Incentive. The final Rule's
application to messages sent by nonprofit entities is discussed in
greater detail below. As the Commission explained in the NPRM, the
use of the term ``commercial'' in the Act shows intent to regulate
messages whose primary purpose is to sell something, as
distinguished from ``transactional or relationship messages'' and
other non-commercial communications. 69 FR at 50100.
\42\ See MPAA; Schwartz; SIA.
\43\ Schwartz; SIA. See also MPAA.
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The Commission is persuaded by these comments that the language of
the Rule should adhere more closely to the language of the Act to avoid
the possibility of overbreadth. Reviewing the matter in light of the
comments, the Commission has concluded that the repeated inclusion of
the modifying word ``commercial'' in section 7702(2)(A) of the Act is
not merely tautological, but evidences an intention to ensure that the
CAN-SPAM regulatory scheme would not reach isolated e-mail messages
sent by individuals who are not engaged in commerce,\44\ but
nevertheless seek to sell something to a friend, acquaintance, or other
personal contact.\45\ To be consistent with the text of CAN-SPAM, under
the final Rule, ``commercial'' content is ``the commercial
advertisement or promotion of a commercial product or service.'' \46\
[[Page 3114]]
According to CAN-SPAM's definition of ``commercial electronic mail
message,'' ``a commercial product or service'' includes ``content on an
Internet Web site operated for a commercial purpose.'' \47\ By
incorporating specifically the Act's definition of ``commercial
electronic mail message,'' the final Rule also incorporates that
definition's inclusion of ``content on an Internet Web site operated
for a commercial purpose.'' Thus, in the text of the final Rule, and
throughout this Federal Register Notice, every reference to
``commercial'' content or ``a commercial product or service'' includes
``content on an Internet Web site operated for a commercial purpose.''
Therefore, an e-mail message's reference or hyperlink to the address of
a Web site that is operated for a commercial purpose is ``commercial''
content under the Act and the final Rule.
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\44\ The Random House College Dictionary defines ``commercial''
as ``of, pertaining to, or characteristic of commerce; engaged in
commerce.'' It defines ``commerce'' as ``an interchange of goods or
commodities, especially on a large scale; trade; business.'' Random
House College Dictionary 270 (Revised edition unabridged 1980).
\45\ The Act's coverage of single business-to-business e-mail
messages is an issue that several commenters addressed. The text of
the Act has no business-to-business exemption and does not establish
a minimum number of e-mail messages that must be sent before the Act
applies. This may invite an interpretation that it regulates such
messages as commercial, even when they are not sent in bulk.
Nevertheless, a number of commenters advanced equitable arguments
for an exemption from CAN-SPAM for isolated business-to-business
commercial e-mail messages. See, e.g. MBNA. The Commission has not
made any determination regarding this issue, which it intends to
review when addressing discretionary rulemaking issues.
\46\ See 15 U.S.C. 7702(2)(A). CAN-SPAM's definition of
``commercial'' content does not modify sections 4 and 5 of the FTC
Act, which define ``commerce'' and establish the Commission's
authority to prevent, among other things, ``unfair or deceptive acts
or practices in or affecting commerce.'' 15 U.S.C. 44 and 45.
\47\ 15 U.S.C. 7702(2)(A).
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1. Section 316.3(a)(1)--Criterion for E-mail Messages That Contain Only
Commercial Content
In the NPRM, the Commission proposed that ``if an e-mail message
contains only content that advertises or promotes a product or service
(`commercial content'), then the `primary purpose' of the message would
be deemed to be commercial.'' Only a few commenters addressed this
component of the proposed primary purpose criteria, and those
commenters generally supported the Commission's approach.\48\ Thus, the
Commission adopts a final Rule provision that retains the proposed
criterion for determining the primary purpose of an e-mail message
containing only commercial content. As was explained above, however,
the final Rule's version of this criterion slightly modifies the
proposal's description of ``commercial content.'' In the final Rule,
commercial content is ``the commercial advertisement or promotion of a
commercial product or service.'' Under section 316.3(a)(1) of the final
Rule, if an e-mail message contains only commercial content, the
``primary purpose'' of the message shall be deemed to be commercial.
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\48\ See CASRO; ESPC; Keyspan; NCL; Visa.
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2. Section 316.3(a)(2)--Criteria for e-mail Messages That Contain Both
Commercial Content and ``Transactional or Relationship'' Content
In the NPRM, the Commission proposed that section 316.3(a)(2) would
set out criteria for determining the primary purpose of messages
containing both commercial content and transactional or relationship
content. The proposal was that this type of dual-purpose message would
have a commercial primary purpose if: ``(1) A recipient reasonably
interpreting the subject line of the electronic mail message would
likely conclude that the message advertises or promotes a product or
service; or (2) The electronic mail message's [transactional or
relationship content] does not appear at or near the beginning of the
message.'' \49\ These proposed criteria prompted a substantial number
of comments. The Commission has determined to adopt final Rule
provisions that retain both criteria, but to make slight modifications
to each one. Under section 316.3(a)(2) of the final Rule, if an
electronic mail message contains both commercial content \50\ and
transactional or relationship content, then the primary purpose of the
message shall be deemed to be commercial if: (1) A recipient reasonably
interpreting the subject line of the electronic mail message would
likely conclude that the message contains the commercial advertisement
or promotion of a commercial product or service; or (2) the electronic
mail message's transactional or relationship content does not appear,
in whole or in substantial part, at the beginning of the body of the
message.\51\ In other words, for such a message to be deemed to have a
``transactional or relationship'' primary purpose, the subject line
must not contain a reference to a commercial advertisement or promotion
of a commercial product or service and the transactional or
relationship content must appear in whole or in substantial part at the
beginning of the body of the message. Both criteria must be fulfilled
if a message is to be deemed to have a purpose that is primarily
transactional or relationship.
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\49\ Proposed Rule 316.3(a)(2). 69 FR at 50106.
\50\ As explained above, the final Rule's description of
``commercial'' content has been modified to be consistent with the
Act's text. Thus, commercial content is ``the commercial
advertisement or promotion of a commercial product or service.''
\51\ Several commenters urged the Commission to adopt two
additional categories of e-mail messages that may be regulated by
CAN-SPAM: messages consisting solely of ``transactional or
relationship'' content, and messages that contain commercial
content, transactional or relationship content, and content that
does not belong in either category (e.g., informational content).
See Experian; NBC; NetCoalition; NRF. The Commission has determined
to add a fourth category of messages addressed in its primary
purpose criteria: those containing only transactional or
relationship content. That category and its criterion are discussed
below. The Commission declines to adopt a fifth category for
messages containing commercial content, transactional or
relationship content, and content that is neither commercial nor
transactional or relationship. Instead, the Commission has
determined that such messages will be evaluated using the criteria
for messages containing both commercial content and transactional or
relationship content. Thus, the transactional or relationship
content, which Congress has identified as especially important to
recipients, must appear, in whole or in substantial part, at the
beginning of the body of the message for the message not to be
deemed to have a commercial primary purpose.
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a. Sections 316.3(a)(2)(i) and (3)(i)--The Function of the Subject Line
in Determining the Primary Purpose of e-mail Messages Containing Both
Commercial Content and Transactional or Relationship Content, or
Containing Both Commercial Content and Content That Is Neither
Commercial Nor Transactional or Relationship
In the NPRM, the Commission stated: ``[T]he subject line is
important because consumers reasonably use the information it contains
to decide whether to read a message or delete it without reading it.
For this reason, bona fide e-mail senders likely use the subject line
to announce or provide a preview of their messages. These e-mail
senders, when they are advertising or promoting a product or service,
will likely highlight that fact in their subject lines so that
recipients may decide whether to read the messages.'' \52\ The
Commission continues to believe that the subject line is a reliable
indicator of an e-mail message's primary purpose. The Commission also
believes that the subject line criterion has the substantial benefit of
being a clear test for e-mail senders to apply to their messages.
Several commenters supported the subject line criterion.\53\ Visa
supported independent evaluation of the subject line ``because it
assists consumers in deciding whether or not to read a particular e-
mail message.'' Visa agreed that bona fide e-mail senders ``will
highlight in the subject line the principal purpose of the e-mail
message,'' although it recommended substituting a different criterion
in place of the proposed net impression standard.\54\ NCL stated that
the subject line is the first thing a recipient sees and is often the
sole basis on which a recipient decides whether to open the
[[Page 3115]]
message or delete it.\55\ Reed Elsevier, a publishing and information
company, stated that this criterion ``while subjective, provide[s] * *
* guidance for compliance with the Act.'' For these reasons, the
Commission has adopted a subject line criterion in the final Rule for
all dual-purpose e-mail messages that closely tracks the proposed
Rule's subject line criterion.\56\
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\52\ NPRM, 69 FR at 50095 (footnotes omitted).
\53\ See CASRO (requesting additional guidance); NCL; Reed;
Visa.
\54\ Visa. While generally supportive of the evaluation of the
subject line, Visa recommended that the Commission adopt a test for
determining the primary purpose of an e-mail message that would
evaluate whether the commercial content in an e-mail message was
``more important than all other purposes,'' and ``but for'' the
inclusion of such content, the message would not have been sent.
\55\ But see DoubleClick (stating that e-mail recipients rely
more on the from line than the subject line when deciding whether to
read a message). DoubleClick's data show that one-third of e-mail
recipients surveyed consider the subject line to be the most
important factor in deciding whether to open a permission-based e-
mail. The Commission considers this data as support for its use of
the subject line in its primary purpose criteria. It is reasonable
to presume that an even greater percentage of consumers rely most on
the subject line when deciding whether to open unsolicited messages
from unfamiliar senders, when the from line is less useful to
recipients.
\56\ As explained above, the final Rule's description of
``commercial content'' has been modified to be consistent with the
Act's text. Thus, commercial content is ``the commercial
advertisement or promotion of a commercial product or service.''
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Some commenters claimed that the subject line criterion did not
provide enough guidance regarding how CAN-SPAM would apply to e-mail
messages that contained commercial content but did not refer to this
commercial content in the subject line.\57\ Some commenters warned that
this criterion should not--indeed, could not--require e-mail messages
containing commercial content to refer to that content in the subject
line.\58\ The subject line criterion does not require senders to use a
subject line that refers to the message's commercial content.\59\ This
is necessarily a fact-specific analysis, and a dual-purpose message may
use a subject line that is not deceptive and yet does not refer to
commercial content.
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\57\ See, e.g., Experian; KeySpan; NetCoalition.
\58\ See Associations; CBA; DMA; Experian; PMA; Wells Fargo.
Section 7711(b) of the Act, cited by these commenters, prohibits the
Commission from ``establish[ing] a requirement pursuant to section
7704(a)(5)(A) * * * to include any specific words, characters,
marks, or labels in a commercial electronic mail message, or to
include the identification required by section 7704(a)(5)(A) * * *
in any particular part of such a mail message (such as the subject
line or body).'' This criterion, however, does not require any
specific content in the subject line of e-mail messages, and is
plainly consistent with the Act.
\59\ Despite requests from CBA and DMA to add to the Rule's text
a statement explaining this point, the Commission believes it
unnecessary. See also NetCoalition (proposing three tests--``close
alignment,'' ``net impression,'' and ``deceptiveness''--for
determining when a dual-purpose message's subject line should refer
to commercial content). These tests do not add materially to the
criterion adopted in the final Rule.
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It is worth noting, however, that section 7704(a)(2) of CAN-SPAM
prohibits the use of ``a subject heading * * * [that] would be likely
to mislead a recipient, acting reasonably under the circumstances,
about a material fact regarding the contents or subject matter of the
message (consistent with the criteria used in enforcement of section [5
of the FTC Act]).'' \60\
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\60\ Thus, CAN-SPAM specifically applies to the subject line of
covered e-mail messages the deception jurisprudence the Commission
has developed under section 5(a) of the FTC Act. 15 U.S.C. 45(a).
The express language of section 7704(a)(2) of CAN-SPAM tracks the
deception standard developed in the Commission's cases and
enforcement statements, thereby prohibiting subject line content
that is likely to mislead a consumer acting reasonably under the
circumstances about a material fact regarding the content or subject
matter of the message. Cliffdale Assocs., Inc. (Deception
Statement), 103 F.T.C. 164-5. The framework for analyzing alleged
deception is explicated in an Appendix to this decision, reprinting
a letter dated Oct. 14, 1983, from the Commission to The Honorable
John D. Dingell, Chairman, Committee on Energy and Commerce, U.S.
House of Representatives (1984) (``Deception Statement''). Under
this framework, actual deception need not be shown, only that a
representation, omission, or practice is likely to mislead. Id. at
176. Thiret v. FTC, 512 F.2d 176, 180 (10th Cir. 1975); Ger-Ro-Mar,
Inc. v. FTC, 518 F.2d 33, 36 (2d Cir. 1975); Resort Car Rental Sys.,
Inc. v. FTC, 518 F.2d 962, 964 (9th Cir. 1975). The ``acting
reasonably under the circumstances'' aspect of the analysis
considers the representation from the perspective of the ordinary
consumer to whom it is directed. Cliffdale at 177-8. A material fact
``is one which is likely to affect a consumer's choice of or conduct
regarding a product. In other words, it is information that is
important to consumers.'' Id. at 182 (footnotes omitted). Note,
however, that section 7704(a)(6) of the Act establishes a definition
of ``materially'' that is distinct from, but consistent with, the
definition articulated in the Deception Statement. The section
7704(a)(6) definition applies only to section 7704(a)(1), which
prohibits header information that is ``materially false or
materially misleading.''
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CAN-SPAM's focus on subject lines that misrepresent the content or
subject matter of the message is in accord with case law developed
under section 5 of the FTC Act with respect to deceptive ``door-
openers.'' \61\ The subject line of an e-mail message serves as a door-
opener--an initial contact between a sender and a recipient that
typically makes an express or implied representation about the purpose
of the contact. Before the recipient views the body of an e-mail
message, he or she typically may view the subject line that, as the
designation ``subject line'' implies, announces what the e-mail message
concerns. Some senders may be tempted to use misrepresentations in the
subject line to induce recipients to open their messages.\62\ These
senders would be well advised that CAN-SPAM prohibits using the subject
line as an initial contact with consumers to get their attention by
misrepresenting the purpose of the contact.
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\61\ ``[W]hen the first contact between a seller and a buyer
occurs through a deceptive practice, the law may be violated even if
the truth is subsequently made known to the purchaser.'' Cliffdale
Assocs. (Deception Statement), 103 F.T.C. at 180. See also Carter
Products, Inc. v. FTC, F.2d 821, 824 (5th Cir. 1951); Exposition
Press, Inc. v. FTC, 295 F.2d 869, 873 (2d. Cir. 1961), cert. denied,
370 U.S. 917 (1962); National Housewares, Inc., 90 F.T.C. 512, 588
(1977); Resort Car Rental, 518 F.2d at 964; Encyclopaedia
Britannica, Inc., 87 F.T.C. 421, 497 (1976), aff'd sub nom.
Encyclopaedia Britannica, Inc. v. FTC, 605 F.2d 964 (7th Cir. 1979),
cert. denied, 445 U.S. 934 (1980).
\62\ See, e.g., FTC v. Brian Westby, et al., Case No. 03 C 2540
(N.D. Ill. Amended Complaint filed Sept. 16, 2003) (FTC alleged in
part that Defendants used deceptive subject lines to expose
unsuspecting consumers to sexually explicit material).
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(1) Commenters' Opposition to the Subject Line Criterion in Determining
the Primary Purpose of e-mail Messages Containing Both Commercial
Content and Transactional or Relationship Content
In response to the Commission's proposal, many comments from e-mail
senders opposed any standard by which the subject line alone could be
the basis for determining the primary purpose of an e-mail message.\63\
First, many of these commenters objected to the subject line
criterion's focus on a recipient's reasonable interpretation of the
subject line; they claimed this was an ``unnecessarily subjective''
standard.\64\ These commenters argued that it would be difficult,
costly, and time-consuming to determine how recipients would interpret
the subject lines of the commenters' messages.\65\ Although senders
will need to spend some time evaluating their message's subject line,
the Commission believes that these commenters exaggerate the difficulty
and expense involved in determining whether recipients will likely
interpret the subject line as indicating a message with commercial
content. A subject line that indicates that the message contains a
commercial advertisement or promotion of a commercial product or
service will likely lead a recipient to conclude that the message is
commercial, not ``transactional or relationship.'' \66\ A
[[Page 3116]]
subject line that refers only to one of the categories listed in the
Act's definition of ``transactional or relationship message'' would not
lead a recipient to conclude that the message is commercial.\67\ The
Commission believes that this standard provides the necessary guidance
to senders of dual-purpose e-mail messages so that they can, if they
wish, compose their messages so that they will be regulated as
transactional or relationship messages, and not as commercial messages.
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\63\ See, e.g., ESPC; MBNA; NAR; NBC; NetCoalition; SIIA. See
also TrustE (stating that using the subject line as an independent
criterion would ``transform the subject line from a versatile means
of communication with customers into a mere rigid legal compliance
mechanism,'' and arguing that independent evaluation of the subject
line is ``superfluous'' because it is highly improbable, though
admittedly possible, that commercial content may appear in the
subject line and body of an e-mail message, or only in the body of
an e-mail message). The Commission believes that the subject line
criterion uses what is already true about subject lines--that they
highlight the content of a message and that legally they cannot be
deceptive--to facilitate the determination of an e-mail message's
primary purpose.
\64\ MPAA. See also CBA; Courthouse; Experian; ICC; MBA; MBNA;
SIIA; Visa; Wells Fargo.
\65\ See, e.g., Baker; Experian; MPAA.
\66\ Applying the Act's definition of ``commercial electronic
mail message,'' a subject line also refers to commercial content
when it refers to the commercial advertisement or promotion of
``content on an Internet Web site operated for a commercial
purpose.'' 15 U.S.C. 7702(2)(A).
\67\ One commenter, Baker, stated that it would seem
``intolerable'' for an e-mail sender to have to ``worry about the
distinction'' between a subject line that indicates that a
recipient's periodical subscription is about to expire (which would
refer to transactional or relationship content) and a subject line
that packages such a notification with a reference to a sales pitch
to renew the subscription (which would refer to both commercial
content and transactional or relationship content). Although CAN-
SPAM provides that a notice about subscription status is
transactional or relationship content, it does not establish that an
offer to renew the subscription constitutes transactional or
relationship content. As a result, the Act itself dictates this
narrow distinction. It is therefore important to examine the subject
line to determine the primary purpose of a dual-purpose message that
refers to both subscription status and a renewal sales pitch.
Senders may include the sales pitch in both the subject line and the
message, but because this message would have a commercial primary
purpose, the sender would have to give recipients an opportunity to
opt out of future sales pitches.
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A second group of commenters objecting to the subject line
criterion argued that it fails as a ``primary purpose'' test because it
looks at only one component of an e-mail message.\68\ According to
these commenters, any ``primary purpose'' test must look at the e-mail
message as a whole. The Commission believes that the criteria
articulated in section 316.3(a)(2) do give appropriate consideration to
all relevant elements of an e-mail message. The subject line stands out
as a separate part of a message that serves as a preview of the body of
the message. As such, it is appropriate to tailor the criteria to
accommodate this basic feature of e-mail communication. Congress
required the Commission to ``defin[e] the relevant criteria to
facilitate the determination of the primary purpose of an electronic
mail message.'' \69\ The Commission's use of the subject line as one
criterion for determining an e-mail message's primary purpose is
consistent with this mandate. e-mail recipients can and do rely on a
message's subject line as a preview of what the message is about.\70\
CAN-SPAM's prohibition on deception in subject lines ensures the
reliability of the subject line as a signal of a message's purpose.\71\
Because bona fide e-mail senders likely use the subject line to
highlight the content of their messages, and because CAN-SPAM mandates
honest subject lines, then it is proper--and efficient--to conclude
that one way to determine the primary purpose of an e-mail message is
by looking at the subject line.
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\68\ See, e.g., ESPC; MBNA; MPAA.
\69\ 15 U.S.C. 7702(2)(C).
\70\ See, e.g., NCL.
\71\ 15 U.S.C. 7704(a)(2).
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A third group of commenters argued that, if the Commission were
determined to use the subject line in its criteria, it must look at
whether the primary purpose of the subject line is commercial.\72\ Some
commenters in this group argued that this criterion should not look at
whether a recipient reasonably interpreting the subject line ``would
likely conclude that the message contains the commercial advertisement
or promotion of a commercial product or service,'' but should instead
look at whether such recipient would likely conclude that the primary
purpose of the message is commercial.\73\ Given the limited space with
which e-mail senders operate in the subject line, the Commission
believes it is reasonable and practical for the criterion to consider
whether a recipient reasonably interpreting the subject line would
likely conclude that the message contains commercial content, not
whether he or she would likely draw any conclusions about the message's
primary purpose. It would be unworkable to adopt a test that required
e-mail senders to weigh the relative importance of a subject line's
different references. As explained above, CAN-SPAM ensures that the
subject line is a non-deceptive, reliable indicator of an e-mail
message's content. If an e-mail sender wants to send a message that
will be treated under CAN-SPAM as a transactional or relationship
message, the subject line criterion provides a roadmap to arrive at
that result (i.e., place only references to transactional or
relationship content in the subject line). The same is true of the
``placement'' criterion discussed immediately below. Before e-mail
senders initiate any message, they can know--and control--how their
message will be regulated.
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\72\ See Associations; CBA; Experian; PMA; Wells Fargo.
\73\ See BofA; Mastercard; NBC.
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A fourth group of commenters claimed the subject line is not a
reliable indicator because Internet service providers, by limiting the
length of the subject line actually presented to a recipient, may alter
how a subject line appears on a recipient's computer in a manner that
is beyond the sender's control.\74\ These commenters were concerned
that, due to such alteration, a recipient could conclude that the
subject line of an e-mail message indicated that the message contained
commercial content when the subject line did not so indicate when it
left the sender's computer. According to the subject line criterion,
that conclusion would mean that a dual-purpose message has a commercial
primary purpose. These commenters submitted nothing that shows that,
when a subject line refers initially to transactional or relationship
content, the subject line could appear to refer to commercial content
because of subsequent alteration by a recipient's Internet service
provider. Although it may be possible for a subject line to be cut
short because of the recipient's e-mail program, it is unlikely that
this would change a subject line from referring to transactional or
relationship content to referring to commercial content.\75\ Moreover,
one of the commenters raising this objection acknowledged that senders
already take into account ISPs' subject line character limitations.\76\
Thus, the Commission has determined not to change the subject line
criterion.\77\
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\74\ See DoubleClick; ESPC; TRUSTe.
\75\ If a long subject line refers to both transactional or
relationship content and commercial content, the recipient would
already reasonably conclude that the message contains an ad (and
therefore is commercial). Therefore, if a portion of this long
subject line is cut off, it would not change the conclusion.
\76\ See TRUSTe.
\77\ MPAA asserted a somewhat related argument that the subject
line criterion should not apply when the original recipient of an e-
mail message replies to or forwards that message. Specifically, MPAA
posed the hypothetical of a message that is initially purely
commercial (e.g., a sales pitch) with a ``commercial'' subject line,
but that subsequently takes on transactional or relationship content
(e.g., completion of the transaction introduced by the sales pitch)
as the two parties to the message reply to each other. According to
MPAA, the subject line criterion should not render such a message
commercial even if the message retains its original ``commercial''
subject line. The Deception Statement, which is a lodestar of the
subject line criterion's focus on ``a recipient reasonably
interpreting the subject line,'' states ``when representations * * *
are targeted to a specific audience, the Commission determines the
effect of the practice on a reasonable member of that group.'' See
Cliffdale Assocs. (Deception Statement), 103 F.T.C. at 178, 180.
That passage of the Deception Statement provides guidance to senders
of messages described by MPAA. While the subject line criterion
still applies to business-to-business messages that are replied to
or forwarded, senders of such messages may be able to show that a
recipient reasonably interpreting the subject line of the message
would not likely conclude that the message contains commercial
content.
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[[Page 3117]]
b. Section 316.3(a)(2)(ii)--``Placement'' Criterion for e-mail Messages
With Both Commercial Content and Transactional or Relationship Content
Under the Commission's second proposed criterion governing e-mail
messages containing both commercial content and transactional or
relationship content, this type of dual-purpose message would have a
commercial primary purpose if the transactional or relationship content
``does not appear at or near the beginning of the message.'' \78\
Several senders supported this test because it provides clear,
objective guidance to marketers.\79\ Others opposed it, typically
because they felt it does not provide sufficient guidance, especially
with respect to the ``at or near the top'' element.\80\ A second
criticism from a small number of commenters opposed to this approach
was that they preferred to be able to provide commercial content first
without having their messages be considered commercial e-mail
messages.\81\ In the final Rule, in response to comments addressing
this approach and to provide the clearest standard, the Commission has
modified the standard so that an e-mail message will be deemed to have
a commercial primary purpose if the transactional or relationship
content ``does not appear, in whole or in substantial part, at the
beginning of the body of the message.'' \82\ The Commission believes
that this placement test provides an objective standard for e-mail
senders to comply with, allows for flexibility in message design, and
ensures that recipients receive the most important content of a dual-
purpose message first.\83\ e-mail senders are not required to complete
their presentation of transactional or relationship content before
providing any commercial content. Once they begin their message with at
least some substantial transactional or relationship content, they may
then provide commercial content. Use of the term ``substantial'' in
this criterion does not refer to volume; there is no minimum number of
``transactional or relationship'' characters that must appear at the
beginning of the body of the message. Rather, the term ``substantial''
refers to the nature of the content. To satisfy this criterion, the
transactional or relationship content that appears at the beginning
must be something recognizable as transactional or relationship
content. For example, if a message's transactional or relationship
content is account balance information pursuant to section
7702(17)(A)(iii), a statement providing the recipient's current balance
would be substantial, and additional related information (e.g., recent
account activity) could be provided below commercial content. On the
other hand, merely stating ``Your account'' at the beginning of the
message would not be sufficiently substantial. Under this standard,
recipients of these messages will be alerted to important transactional
or relationship content without having to first wade through
advertising.\84\
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\78\ NPRM, 69 FR at 50106. Of course, if a recipient reasonably
interpreting the subject line of such a message would likely
conclude that the message contains the commercial advertisement or
promotion of a commercial product or service, the message would be
deemed to have a commercial primary purpose regardless of where in
the message the transactional or relationship content appears.
\79\ See Keyspan; MBA; MBNA; VCU.
\80\ See, e.g., DoubleClick; Experian. Commenters also asked how
this standard would apply to messages with ``side-by-side''
presentation of commercial content and transactional or relationship
content. See NRF; MPAA.
\81\ See, e.g., MPAA.
\82\ Three commenters requested that the Commission specify that
this criterion looks at placement at the beginning of the body of
the message (as opposed to simply ``the beginning of the message,''
which was proposed in the NPRM). See Experian; MBNA; NBC. For
clarity, the Commission accepts this suggestion.
\83\ CAN-SPAM's definition of ``transactional or relationship
message'' includes specific categories of messages that Congress
determined to be ones that consumers want to receive. These
categories include vital information such as bank account
statements, product recalls, transaction confirmations, and warranty
information.
\84\ A side-by-side presentation of commercial and transactional
or relationship content could satisfy this standard.
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Finally, in referring to ``transactional or relationship'' content,
the proposed Rule used the phrase ``content that pertains to one of the
functions listed'' in a portion of the rule that tracked, verbatim, the
statutory provision that sets out the transactional or relationship
categories [15 U.S.C. 7702(17)]. The final Rule uses the narrower and
more precise formulation ``transactional or relationship content as set
forth in paragraph (c) of this section.''
c. Commenters' Proposals for Determining the Primary Purpose of
Messages Containing Both Commercial Content and Transactional or
Relationship Content
In the NPRM, the Commission asked commenters to propose alternative
criteria to determine the primary purpose of messages containing
commercial content and transactional or relationship content.
Commenters responded with several proposals that the Commission had
already considered and rejected in the NPRM. Some commenters also
proposed modifications to the Commission's existing proposal.
(1) Comments Arguing That the Inclusion of Any Transactional or
Relationship Content Should Preclude Determination That the Message Has
a Commercial Primary Purpose
Approximately 30 comments submitted by e-mail senders argued that
dual-purpose messages necessarily do not have a commercial primary
purpose if they contain certain transactional or relationship content,
such as billing statements, legally required content, content sent in
response to a request from the recipient, ``primarily editorial''
content, and subscription renewals.\85\ One commenter simply stated
that a message is a ``transactional or relationship message'' if it
contains any transactional or relationship content regardless of where
it is positioned.\86\
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\85\ See, e.g., AeA; Associations; Baker; BofA; CBA; DMA; ERA;
MPA; PMA; Schwartz; SIIA; State Farm; Time Warner; Wells Fargo.
\86\ Schwartz.
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CAN-SPAM clearly rejects the hard-and-fast approach advocated by
these commenters, which is that any modicum of transactional or
relationship content ought to place even an overwhelmingly commercial
message beyond the ambit of the modest requirements that the Act
imposes on commercial messages. The Act distinguishes between messages
the ``primary purpose'' of which is ``commercial'' and messages the
``primary purpose'' of which is ``transactional or relationship.'' \87\
The concept that some analysis is necessary to determine the ``primary
purpose'' of e-mail messages that blend commercial with transactional
or relationship content is therefore embodied in the Act. Thus, the
text of the Act itself contradicts the commenters' argument that the
presence of transactional or relationship content in an e-mail message
automatically prevents an e-mail message from being ``commercial.'' The
Commission therefore declines to adopt a final Rule that would treat
dual-purpose messages as transactional or relationship messages simply
because they include any amount of transactional or relationship
content appearing anywhere in the message.\88\
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\87\ See 15 U.S.C. 7702(2); 7702(17).
\88\ Similarly, several commenters expressed concern that the
Commission not prohibit or discourage dual-purpose messages. See
DoubleClick; Experian; NBC; NRF; Visa. This concern is unfounded.
The Commission does not have the authority to prohibit dual-purpose
messages, and the final Rule's criteria for messages containing both
commercial content and transactional or relationship content do
nothing to discourage use of these messages. Moreover, despite the
concerns of some commenters, CAN-SPAM does not give e-mail
recipients the right to opt-out of important transactional or
relationship content, such as billing statements. See AeA;
Associations; CBA; DMA; ERA; PMA; Wells Fargo.
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[[Page 3118]]
A number of commenters requested guidance regarding CAN-SPAM's
regulation of periodicals (such as newsletters and catalogs) delivered
via e-mail, many of which contain information and advertising.\89\ The
starting point to analyze the impact of CAN-SPAM on a periodical is to
consider whether it is sent pursuant to a subscription. When a
recipient subscribes to a periodical delivered via e-mail, then
transmission of that periodical to that recipient falls within one of
the ``transactional or relationship message'' categories. Specifically,
it constitutes delivery of ``goods or services * * * that the recipient
is entitled to receive under the terms of a transaction that the
recipient has previously agreed to enter into with the sender.'' \90\
This is true regardless of whether the periodical consists exclusively
of informational content or combines informational and commercial
content.\91\
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\89\ See, e.g., Adknowledge; CBA; CIPL; Courthouse; DMA; NAA;
NADA; NAEDA; NCL; NetCoalition; Reardon; Reed.
\90\ 15 U.S.C. 7702(17)(A)(v). Determining whether a periodical
delivered via e-mail will be deemed to be ``transactional or
relationship'' under 7702(17)(A)(v), however, requires consideration
of the recipient's understanding of what he or she is entitled to
receive under the terms of the agreed-to transaction. This is not to
say that, at the time of the transaction, the sender must give an
exhaustive description of what types of content will be included in
a periodical that the recipient has requested to receive. The
Commission believes that recipients reasonably expect--without
having to be told--that a newsletter will contain advertising along
with informational content. Nevertheless, the Commission believes
that there are limits to such an expectation. If the content that a
recipient has requested pursuant to 7702(17)(A)(v) is overwhelmed by
commercial content that clearly exceeds what the recipient might
reasonably have expected, then the sender cannot persuasively argue
that the primary purpose of its message is to deliver content the
recipient is entitled to receive under the terms of a previously
agreed to transaction. In such a situation, where excessive
commercial content could cause recipients to overlook important
transactional or relationship content, it would be contrary to
Congress's intent to regulate the e-mail message as transactional or
relationship rather than commercial.
\91\ If, however, an e-mail message consists exclusively of
commercial content (such as a catalog or other content that is
purely advertisement or promotion), then the e-mail message would be
a single-purpose commercial message. This is because delivery of
such advertising or promotional content would not constitute the
``delivery of goods or services * * * that the recipient is entitled
to receive under the terms of a transaction that the recipient has
previously agreed to enter into with the sender,'' as set forth in
the relevant portion of the definition of ``transactional or
relationship message.'' 15 U.S.C. 7702(17)(A)(v) (emphasis added).
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When a sender delivers an unsolicited newsletter or other
periodical via e-mail, and there is no subscription, the situation is
materially different for purposes of CAN-SPAM than when such content is
delivered with the consent of the recipient. In such a scenario, the
content likely would not be ``transactional or relationship'' within
the meaning of section 7702(17)(A)(v). Instead, if the message contains
both commercial content and content that is neither commercial nor
transactional or relationship, the criteria set out in section
316.3(a)(3) would apply. Under that standard, discussed in detail
below, an e-mail message will be deemed to have a commercial primary
purpose if either: (1) A recipient reasonably interpreting the subject
line would likely conclude that the message contains the commercial
advertisement or promotion of a commercial product or service; or (2) a
recipient reasonably interpreting the body of the message would likely
conclude that the primary purpose of the message is the commercial
advertisement or promotion of a commercial product or service.
(2) Comments Discussing a ``Primary Purpose'' Criterion Based on
Sender's Intent, Such as a ``But for'' Standard
Some commenters responding to the NPRM advocated ``primary
purpose'' criteria based on the sender's intent.\92\ These commenters,
repeating arguments the Commission rejected in the NPRM,\93\ claimed
that a standard based on the sender's intent would be an objective test
for marketers.\94\ The Commission disagrees that a sender-intent
standard is objective. To the contrary, the sender-intent approach is
entirely subjective. As NCL stated: ``[N]either recipients nor law
enforcement authorities can look into the minds of senders in order to
prove whether they intended the messages to be primarily for commercial
or other purposes.'' \95\ The Commission agrees with NCL, and notes
that a ``sender intent'' standard would create a difficult problem of
proof in law enforcement actions. Such a standard presents the
potential for a loophole for spammers, which could nullify CAN-SPAM's
protections for e-mail recipients. The Commission's criteria obviate
such a loophole.
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\92\ See, e.g., AIA; DMA; ERA; Experian; ICC; Mastercard; MBNA;
MPA; PMA; Visa; Wells Fargo. As in the first round of comments, many
of these commenters argued in favor of a ``but for'' sender-intent
standard: a message would not have a commercial primary purpose
unless the message would not have been sent but for its commercial
content. See, e.g., ERA; MBNA; Mastercard; ACLI; SIA. Under this
standard, a message with both transactional or relationship content
(e.g., a billing statement) and advertising would never have a
commercial primary purpose; according to these commenters, it would
always be true that the transactional or relationship portion of the
message would have been sent with or without accompanying ads. This
standard, in effect, establishes that a message is by definition a
transactional or relationship message if it contains any
transactional or relationship content. The Commission declines to
adopt this approach because it is clearly inconsistent with the text
of the Act. ABM raised a different concern with the ``but for''
approach: ``[I]f a `but for' test were applied to the senders of
electronic newsletters, who are certainly not intended to fall
within the Act's ambit, they could very well fail * * *. Would they
distribute these newsletters * * * `but for' the advertising? In
many cases, they would not.'' The final Rule's criteria do not
regulate subscription-based newsletters--and most unsolicited bona
fide newsletters--as commercial messages.
\93\ See 69 FR at 50098.
\94\ See ICC; Wells Fargo.
\95\ NCL.
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Some commenters argued that a ``sender intent'' standard would be
more consistent with Congress's intent than the criteria the Commission
proposed.\96\ According to these commenters, Congress signaled its
intent to focus on the sender's intent rather than the recipient's
interpretation by using the term ``purpose'' in the Act. They
criticized the Commission's approach as an improper ``effect'' test
rather than a ``purpose'' test.\97\ As the Commission noted in the
NPRM, however, CAN-SPAM refers to the primary purpose of the message,
not of the sender.\98\ The primary purpose of an e-mail message may be
fairly determined by looking at the sender's intent or the recipient's
interpretation. The latter is the better choice because it is
consistent with the Commission's approach to analyzing deception in
advertising. The ``recipient's interpretation'' approach also
eliminates a vast potential loophole for spammers.
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\96\ See, e.g., MBNA.
\97\ See Adknowledge; AIA; Associations; CBA; DMA; Experian;
MBNA; MPA; NBC; PMA; Time Warner; Wells Fargo.
\98\ See 69 FR at 50098.
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(3) Comments Proposing Substantial Modifications to the Commission's
Proposed Criteria for e-mail Messages Containing Both Commercial
Content and Transactional or Relationship Content
Many senders of commercial e-mail advocated their own ``primary
purpose'' standards for e-mail messages containing both commercial
content and transactional or relationship content. Some of these
commenters proposed that an e-mail message should have to satisfy both
of the Commission's criteria for this type of dual-purpose message for
the message to be deemed to have a commercial primary purpose.\99\ In
other
[[Page 3119]]
words, this type of dual-purpose message would have a commercial
primary purpose only if (1) a recipient reasonably interpreting the
subject line would likely conclude that the message contained
commercial content, and (2) the transactional or relationship content
did not appear, in whole or in substantial part, at the beginning of
the body of the message.\100\ Some advocates of this approach claimed
it would be more consistent with Congress's intent than the
Commission's approach.\101\
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\99\ See ACB; CBA; ESPC; Experian; Mastercard; MBNA; NBC; Wells
Fargo. According to MBNA, ``[t]he net effect * * * would be to shift
the presumption from favoring a commercial content finding to one
more favorable to a finding of TRM [transactional or relationship
message].''
\100\ The Commission's approach is that a message has a
commercial primary purpose if either of the two criteria is met.
\101\ See, e.g., CBA; MBNA.
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The Commission believes that its criteria better preserve
recipients' right to opt out of messages that are ``primarily''
commercial and that they therefore better fulfill Congress's
intentions. Under the commenters' approach, if the subject line
referred to transactional or relationship content, the e-mail message
would always be considered ``transactional or relationship.'' (As noted
above, under their approach, both subject line and placement criteria
must be met before the message would be considered commercial.) Yet,
the e-mail message may open with a substantial amount of unsolicited
advertising and close with an extremely small amount of transactional
or relationship content. Recipients could easily overlook the important
transactional or relationship content that is at the end (or buried in
the middle) of a long message that contains an overwhelming amount of
advertising. Recipients would understandably be frustrated if they did
not have the right to opt out of these overwhelmingly commercial
messages. e-mail senders could therefore continue to send these
messages under the guise of transactional or relationship messages
without giving recipients the right to opt out.\102\ Because the
Commission's approach examines the subject line and placement
independently, it treats these messages as ``commercial'' and therefore
preserves recipients'' right to opt out of these messages. Therefore,
the Commission declines to adopt the commenters' suggested change to
the criteria.
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\102\ Alternatively, an e-mail message may contain a subject
line that refers only to commercial content. If the transactional or
relationship content is placed at the beginning of the body of the
message, under the commenters' approach, this is a transactional or
relationship message, and recipients do not have the right to opt
out. However, recipients reading the subject line may expect the
message to contain only commercial content. They may delete the
message without reading it or only casually review the body of the
message if they are not expecting anything more than just
advertising. Again, they may inadvertently overlook the important
transactional or relationship content. If this occurs, recipients
may be frustrated by not having an ability to opt out of future
similar messages.
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Other commenters proposed that the Commission reformulate the
``primary purpose'' criteria as a safe harbor.\103\ As described by one
of these commenters, ``[f]or e-mail messages containing both commercial
and transactional or relationship content there could be a safe harbor
whereby the message would be deemed not to have a commercial primary
purpose if either: (1) The subject line of the e-mail referred to the
transactional or relationship content, or (2) the transactional or
relationship content appeared at or near the beginning of the e-mail
message. * * * In the event that a marketer opted not to take advantage
of the safe harbor, its dual purpose e-mail messages would be viewed on
the basis of the net impression of the message as a whole on the
reasonable consumer.'' \104\
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\103\ See Associations; ERA; ITAA; MPA; PMA.
\104\ ERA.
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Under this alternative, as long as the subject line included any
reference to transactional or relationship content, a message would not
have a commercial primary purpose even if a recipient reasonably
interpreting the subject line would likely conclude that the message
contained commercial content. A message would not have a commercial
primary purpose even if it opened with a block of commercial content
and closed with a mere line of transactional or relationship content,
provided the subject line referred to transactional or relationship
content. These results abandon CAN-SPAM's dual objectives to enable
recipients to opt-out of unwanted commercial content and to ensure that
recipients receive important transactional or relationship content. The
Commission's criteria, on the other hand, protect the opt-out rights
that CAN-SPAM created and encourage e-mail senders to present
transactional or relationship content with sufficient prominence to
ensure that recipients will notice it. At the same time, the
Commission's criteria allow e-mail senders, before initiating any
message, to determine with a fair level of certainty whether CAN-SPAM
will regulate the message as commercial or ``transactional or
relationship.'' These senders simply need to satisfy themselves of two
things: that a recipient reasonably interpreting the subject line of
the message will not likely conclude that the message contains
commercial content; and that the transactional or relationship content
appears, in whole or in substantial part, at the beginning of the body
of the message.
Some commenters suggested determining the primary purpose of
messages containing both commercial content and transactional or
relationship content by applying a ``net impression'' standard.\105\
The Commission believes this is the appropriate standard for e-mail
messages containing both commercial content as well as content that is
neither commercial nor transactional or relationship. There are
material differences between the two types of dual-purpose messages,
however, that support applying different criteria to each type.
Spammers are notorious for unsolicited messages combining commercial
content and content that is neither commercial nor transactional or
relationship--nonsensical, random words, quotations, aphorisms, and the
like.\106\ These messages require a flexible standard, such as the
``net impression'' approach, because a standard focusing only on a
recipient's reasonable interpretation of the subject line and the
placement of non-commercial content within the body of the message
would simply give spammers carte blanche to evade CAN-SPAM. e-mail
messages with transactional or relationship content, on the other hand,
provide content that Congress has identified as important to
recipients.\107\ The most efficient way to ensure that recipients get
this important content is to require that it be placed, in whole or in
substantial part, at the beginning of the body of the message. Thus,
the Commission declines to adopt criteria that would apply a ``net
impression'' test to messages containing both commercial content and
transactional or relationship content.
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\105\ See DoubleClick; ESPC; NetCoalition; Experian; MPA. Under
this approach, an e-mail message has a commercial primary purpose if
the net impression created by the message is that it has a
commercial primary purpose.
\106\ In the NPRM, the Commission labeled these messages
``Shakespearean sonnet'' spam and discussed how its criteria would
regulate such messages as ``commercial'' under the Act. See 69 FR at
50101.
\107\ Moreover, unlike spammers, these senders already have a
business relationship with their recipients, so the likelihood of
consumer harm is reduced. See NPRM, 69 FR at 50096. As a result, an
objective test is proper because there is little risk that these
senders will abuse it.
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[[Page 3120]]
3. Section 316.3(a)(3)--Criteria for e-mail Messages That Contain Both
Commercial Content and Content That Is Neither Commercial Nor
``Transactional or Relationship''
In addition to the subject line criterion applicable to all dual-
purpose messages, discussed above, the NPRM proposed a separate
criterion to determine the primary purpose of a message that contains
commercial content and content that is neither commercial nor
``transactional or relationship'' in nature. This criterion would come
into play for messages with subject lines that likely would not prompt
a recipient to conclude that the message advertises or promotes a
product or service. In such a case, the primary purpose of the message
still would be deemed to be commercial if a recipient reasonably
interpreting the body of the message would likely conclude that the
primary purpose of the message is to advertise or promote a product or
service. The proposed Rule listed several factors illustrative of those
relevant to this interpretation, including the placement of content
that advertises or promotes a product or service at or near the
beginning of the body of the message; the proportion of the message
dedicated to such content; and how color, graphics, type size, and
style are used to highlight commercial content.\108\
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\108\ Proposed Rule 316(a)(3).
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The following is an example of how the ``net impression'' criterion
for the body of an e-mail message would be applied along with the
separate subject line criterion. Consider a newsletter sent to
consumers with whom the sender had no previous dealings. Because the
newsletter is not sent pursuant to a subscription or similar
arrangement whereby the recipient has agreed to receive such content,
the message does not constitute transactional or relationship
content.\109\ Instead, the primary purpose of the message would be
determined by considering whether (1) ``a recipient reasonably
interpreting the subject line of the electronic mail message would
likely conclude that the message contains the commercial advertisement
or promotion of a commercial product or service,'' or (2) if ``a
recipient reasonably interpreting the body of the message would likely
conclude that the primary purpose of the message is the commercial
advertisement or promotion of a commercial product or service.''
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\109\ That is, the message is not ``goods or services * * * that
the recipient is entitled to receive under the terms of a
transaction that the recipient has previously entered into with the
sender.'' 15 U.S.C. 7702(17)(A)(v).
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Based on the record in this proceeding, the Commission has adopted
the proposed Rule provision with minor changes, including substituting,
in section 316.3(a)(3)(ii), the phrase ``the commercial advertisement
or promotion of a commercial product or service,'' in place of the
phrase ``that advertises or promotes a product or service.'' \110\
Finally, the phrase ``at or near'' in section 316.3(a)(3)(ii) is
replaced by the phrase ``in whole or in substantial part at'' to
clarify the meaning of the placement factor in the net impression
analysis.
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\110\ As noted, similar modifications have been made in other
portions of the Rule that describe ``commercial content.''
Specifically, in the preamble to 316.3(a)(3), the Commission has
substituted the phrase ``the commercial advertisement or promotion
of a commercial product or service'' for the phrase ``advertises or
promotes a product or service,'' and in 316.3(a)(3)(i), the phrase
``message contains the commercial advertisement or promotion of a
commercial product or service'' is substituted for the phrase
``advertises or promotes a product or service.''
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A number of commenters responded to proposed section
316.3(a)(3)(ii). The general themes that emerged from the comments are
discussed in detail below. A few commenters supported the approach
taken in the proposed section 316.3(a)(3)(ii). These commenters
acknowledged that it is important that the Rule not permit senders of
e-mail messages to evade CAN-SPAM simply by adding ``padding'' to their
messages to dilute their commercial nature and thereby escape
regulation.\111\ AeA noted that its ``member companies generally treat
e-mails in this category as `commercial,' and would follow CAN-SPAM
requirements.'' \112\ Some of these commenters, while generally
supportive of the approach taken in the proposal, recommended
modification to portions of the net impression component of the
test.\113\
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\111\ See, e.g., NFCU: CASRO.
\112\ AeA (noting, however, its request that the subject line of
an e-mail message not be independently evaluated in determining the
primary purpose of the message).
\113\ See, e.g., NFCU. (NFCU's concern is addressed below in the
section discussing the net impression criteria.)
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The vast majority of commenters who addressed this issue did so
with at least some reservations.\114\ For example, NFCU endorsed the
approach, but recommended eliminating the reference to color, graphics,
type size, and style as factors illustrative of those used in
evaluating the net impression of a message.\115\ Others noted with
approval the use of the net impression standard in the proposed Rule,
but recommended that the test be revamped to focus on the message as a
whole, rather than singling out the subject line for special
consideration, and then considering the net impression of the body of
the message.\116\ As discussed in detail above, the Commission has
determined that independent evaluation of the subject line of an e-mail
message is appropriate in determining the primary purpose of the
message, and has therefore determined to retain this criterion, rather
than merely including it as one of the factors to be considered under
the net impression analysis.\117\
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\114\ One commenter urged that an e-mail message containing
merely an incidental brand reference in the subject line not be
deemed to be commercial. The standard set forth in the final Rule
criterion regarding the subject line makes clear that the content of
the subject line is evaluated from the perspective of a ``recipient
reasonably interpreting the subject line of the electronic mail
message'' and turns on whether such a recipient ``would likely
conclude that the message contains the commercial advertisement or
promotion of a commercial product or service.''
\115\ NFCU (expressing concern that these factors were sometimes
beyond a sender's control. These arguments are discussed in detail
below).
\116\ DoubleClick; TrustE; ESPC.
\117\ See discussion of subject line criterion above; NPRM, 69
FR at 50095.
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Other commenters expressed concern that the net impression test was
flawed because it depends on the effect of the message on the recipient
rather than the intent of the sender.\118\ As noted in the NPRM, CAN-
SPAM ``refers to the primary purpose of the message, not of the
sender.'' \119\ Thus, the Commission is not bound to use a sender
intent standard in setting forth criteria by which the primary purpose
of an e-mail message is determined. Moreover, as discussed above, any
test to determine the intent of a sender would be at least as
subjective as the reasonable recipient standard.\120\ It also would be
contrary to the basic approach underlying consumer protection law,
which typically evaluates the impact of marketing and advertising from
a reasonable consumer's perspective.\121\ Indeed, marketers have long
been under an obligation to evaluate their advertising material from
the reasonable consumer's perspective and determine what impression the
material makes on consumers. The adoption of a reasonable recipient
standard in this
[[Page 3121]]
Rule, then, is consistent with Commission precedent.
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\118\ MBNA.
\119\ NPRM, 69 FR at 50098.
\120\ See discussion above of comments proposing that the
primary purpose of an e-mail message be determined by evaluating the
sender's intent.
\121\ NPRM, 69 FR at 50096-97. But see MPAA (expressing the
concern that relying on the impression of a reasonable recipient is
vague and subjective).
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Some commenters suggested that if the Commission were to retain
this standard, that a safe harbor be created as well to protect
companies ``that undertake a good-faith effort to comply with the rules
* * * \122\ ``The Commission declines to include a safe harbor in the
final Rule because it is unpersuaded by the record or the circumstances
that such a provision is warranted and necessary in this instance. A
safe harbor is appropriate to prevent liability from being unfairly
applied to an entity, which errs despite its genuine attempts to comply
with the provisions of a rule, usually due to circumstances beyond its
control, and would be subject to liability for what essentially amounts
to a mistake, but for the safe harbor provision.\123\ In the view of
the Commission, the criteria for determining the primary purpose of an
e-mail message are set forth with clarity in the final Rule, thus
making it unlikely that a company striving to be in compliance will err
in appropriately categorizing the content it sends via e-mail.
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\122\ Verizon; Keyspan (incorporate sender's intent as a factor
in the analysis, as well as adding safe harbor to protect those
``not purposefully or intentionally trying to evade the CAN-SPAM
Act.'').
\123\ See, e.g., 16 CFR 310.4(b)(3) (do not call safe harbor in
Telemarketing Sales Rule) and 16 CFR 310.4(b)(4) (call abandonment
safe harbor in Telemarketing Sales Rule).
---------------------------------------------------------------------------
Finally, MPA criticized the proposal, opining that it will restrict
senders of commercial and ``other'' content from referring to a product
or service in the subject line or including third-party advertisements
at or near the top of the message or in ``exciting eye catching
graphics and text'' if they intend to avoid regulation as commercial
messages under the proposed Rule.\124\ MPA further criticized reliance
on the factors ``irrespective of the overall content of the e-mail when
viewed in its totality.'' This reflects a misunderstanding of section
316.3(a)(3)(ii). Indeed, the net impression standard seeks expressly to
evaluate the message in its totality, looking to the impression the
entire e-mail message makes on a reasonable recipient. If a sender
prominently places advertising near the top of the body of an e-mail
message, and draws attention to this content (over the other content in
the message), then the net impression of the e-mail message in its
totality may be that the message is commercial. The consequence of this
determination is that the message will have to include an opt-out
mechanism and otherwise comply with CAN-SPAM. However, nothing would
prohibit the sender from formulating the message in a way that has a
different result. Although this is necessarily a fact-based analysis,
the Commission has derived the net impression standard from its
traditional analysis of advertising under the FTC Act,\125\ and
believes it is one with which advertisers are already familiar and able
to comply.
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\124\ MPA. See also ABM (seeking clarification that ancillary
advertising sent along with ``other'' content in an e-mail message
will not necessarily make a message commercial).
\125\ 69 FR at 50096.
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A few comments focused on the specific factors set forth in the
proposed Rule as illustrative of those that can be used to determine
the net impression of an e-mail message. These factors include the
placement of content that advertises or promotes a product or service
at or near the beginning of the body of the message; the proportion of
the message dedicated to such content; and how color, graphics, type
size, and style are used to highlight the commercial content.\126\
CASRO endorsed these factors, stating that ``[t]he structure of an e-
mail message is the clearest and most direct manifestation of the
sender's intent.'' \127\
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\126\ Proposed Rule 316.3(a)(3)(ii).
\127\ CASRO (but recommending explicitly adding sender intent as
an additional net impression factor to discourage those who might
deliberately structure a message to confuse recipients about its
purpose, such as advertisements designed to look like surveys).
---------------------------------------------------------------------------
NAR sought clarification of the net impression factor regarding
placement of content that advertises or promotes a product or service
at or near the beginning of the body of the message, noting that ``it
is now commonplace to create an e-mail message that is formatted like a
Web page using similar multi-layered commercial and noncommercial text.
Sidebars that contain commercial and noncommercial content and span the
full length of the e-mail message are regularly used in web-like e-
newsletter messages.'' \128\ Similarly, NRF noted that it is common to
place banner advertising lengthwise down one side of a dual purpose e-
mail message, and expressed concern about whether the placement of
these advertisements ``at or near the top'' of the message would mean
that they would be viewed as commercial rather than transactional.\129\
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\128\ NAR. But see CASRO (supporting the placement factor).
\129\ NRF.
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As noted above in the section discussing the placement standard for
e-mail messages containing commercial and transactional or relationship
content, the Commission wishes to provide the clearest possible
standards in the final Rule to facilitate compliance. Thus, in response
to the concerns raised by commenters regarding possible confusion over
the proposed Rule's ``at or near the top'' placement factor within the
net impression analysis, the Commission has modified this language. In
the final Rule, the phrase ``at or near the top'' has been replaced by
the phrase ``in whole or in substantial part, at * * *.'' In addition,
as noted above, the term ``commercial'' has been added as a modifier of
the terms ``advertisement or promotion'' and ``product or service,'' to
conform the text of the final Rule to that of the Act.
NAR also sought clarification regarding the net impression factor
that looks to the proportion of the message dedicated to such content.
In its comment, NAR urged the Commission to provide compliance guidance
that would elucidate the proportion of an e-mail devoted to commercial
advertisement or promotion that would cause an e-mail message to be
viewed as commercial. As noted in the NPRM, the Commission rejects a
``rigidly mechanical `proportion' standard for determining the primary
purpose of a message'' because such a standard could easily be evaded
by those seeking to avoid regulation under CAN-SPAM.\130\ Nonetheless,
the Commission believes that the proportion of the message devoted to
commercial content versus ``other'' non-commercial, non-transactional
or relationship content is a factor relevant to the analysis a
reasonable recipient will engage in to determine the primary purpose of
a message. The greater the proportion of a message devoted to
commercial advertisement or promotion of a commercial product or
service, the more likely the balance will tip toward classification of
the entire message as commercial.
---------------------------------------------------------------------------
\130\ NPRM, 69 FR at 50098.
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NAR also requested clarification regarding the extent to which
color, graphics, type size, and style will influence the determination
that a particular e-mail message is commercial, and whether each would
be considered independently or the factors would be considered as a
whole.\131\ As with the evaluation of advertising claims under FTC
jurisprudence, these factors--color, graphics, type size, and style--
will be evaluated as part of ``the
[[Page 3122]]
entire mosaic, rather than each tile separately.'' \132\
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\131\ NAR.
\132\ Cliffdale Assocs. (Deception Statement), 103 F.T.C. at
181, citing and quoting FTC v. American Home Products, 695 F.2d 681,
688 (3rd Cir. 1982). Entities subject to the final Rule may also
find it useful to review the Commission's Dot Com Disclosure Guide
(available online at http://www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/
) for guidance on the applicability of the Commission's net
impression standard to online advertising media.
---------------------------------------------------------------------------
NFCU recommended eliminating this criterion altogether because the
formatting of the message text is beyond the sender's control in
instances where, for example, an e-mail message sent in HTML format may
be converted to plain text by the recipient's e-mail program, altering
the sender's original formatting. The comments merely asserted that
conversion of an e-mail message by an ISP or a recipient's e-mail
program could result in a message that was non-commercial in its HTML
form becoming commercial once it is converted to plain text. However,
as NCL points out, ``no matter what media they use, marketers spend
considerable time and resources trying to anticipate how consumers will
react to all aspects of their advertisements, including the placement
of information, type size and style, wording, color, graphics, etc.''
\133\ Because senders want to effectively communicate their message to
recipients, it seems likely that they consider the result if an e-mail
message in HTML format is converted to plain text. Moreover, if an e-
mail message is sent in HTML format, but then converted to plain text
by the recipient's e-mail client, the text will be converted to the
default font, color and size set by the client. There is no evidence to
support the assertion that this conversion process could result in
commercial text being emphasized. Thus, the Commission declines to
eliminate from the net impression test the factor focusing on whether
commercial content is highlighted.
---------------------------------------------------------------------------
\133\ NCL.
---------------------------------------------------------------------------
A small number of commenters also addressed the issue of whether
the identity of the sender should be considered in determining the
primary purpose of an e-mail message. CASRO suggested adding the
identity of the sender to the net impression factors in the Rule noting
that ``[t]he sender's identity could provide critical information as to
the nature of its business or non-commercial activities * * * .'' \134\
NCL advocated a different approach: if a message containing commercial
and ``other'' content is sent by a for-profit entity, then the message
would be automatically deemed commercial, but if it is sent by a not-
for-profit, the primary purpose of the message would be determined by
the impact of the message on a reasonable recipient.\135\ The
Commission finds that the comments provide insufficient basis to add an
express statement in the final Rule that the identity of the sender
will be a factor in the net impression analysis. However, it bears
noting that the current factors are illustrative, and that other
factors, including the identity of the sender, may be considered in
making a determination as to the net impression of an e-mail message.
---------------------------------------------------------------------------
\134\ CASRO.
\135\ NCL.
---------------------------------------------------------------------------
Finally, some commenters addressed the question of deceptive
advertising format. In the NPRM, the Commission noted that it declined
to evaluate the status of an e-mail message based solely on the intent
of the sender, but highlighted the possibility that sender intent could
be useful in ensuring coverage when a sender structures a commercial e-
mail message in such a way as to deceive the recipient into believing
that a message is non-commercial. NetCoalition strongly objected to the
idea that sender's intent could impact on whether an e-mail message is
commercial or not, stating ``[s]uch a test is inappropriate, because it
undermines the Net Impression test, sows enforcement uncertainty, is
unfair to senders by not rewarding senders who have positive intentions
when sending messages, and could discourage companies from adopting a
robust CAN-SPAM compliance program because of the fear that actions
intended to comply with CAN-SPAM could be wrongly construed as
`deliberately structuring.' '' \136\ On the other hand, CASRO advocated
looking at sender intent in this context, noting that some e-mail
senders deliberately structure their messages to appear to be
legitimate surveys when, in fact, they are advertising or promoting
products or services.\137\ After considering the comments, the
Commission declines to include sender intent as a component of the net
impression analysis because the benefits of including such a provision
are outweighed by the risk that such a factor could erroneously cause
non-commercial messages to be categorized as commercial. For example, a
bona fide periodical delivered via e-mail consisting of informational
content sponsored by commercial content likely will not have a
commercial primary purpose under the final Rule's criteria. If the
sender's intent was part of this analysis, however, such a message
could be considered to have commercial primary purpose if the sender
would not have transmitted the message without the commercial content.
In such a situation, the commercial content could be considered
essential, and, thus, it may appear that the sender intended the
commercial content to be primary.
---------------------------------------------------------------------------
\136\ NetCoalition.
\137\ CASRO.
---------------------------------------------------------------------------
On the other hand, spammers may try to evade CAN-SPAM by presenting
the commercial content of their e-mail messages in the guise of
informational content, deliberately structuring their messages to
create the mistaken impression in the minds of reasonable recipients
that the messages do not have a commercial primary purpose. A spammer
might try to argue that, applying the Commission's criteria, CAN-SPAM
does not cover such a message, because a recipient reasonably
interpreting the message would not likely conclude that the primary
purpose of the message is commercial. The Commission believes this
strategy may tempt some spammers, although it is unclear whether e-mail
messages are as conducive to deceptive format ploys as are other
media.\138\ In any event, if a sender deliberately structures his
message to create a false impression that the message does not have a
commercial primary purpose, the message should be considered to have a
commercial primary purpose under the final Rule's criteria. In the
Commission's view, if a message's entire design is to disguise
commercial content as non-commercial content, the message is
commercial.\139\
[[Page 3123]]
The Commission will use other tools in its law enforcement arsenal,
specifically section 5 of the FTC Act, to combat the practice of using
a deceptive advertising format in e-mail.
---------------------------------------------------------------------------
\138\ In other contexts, such as direct mail marketing, the
Commission has sued marketers for violating the FTC Act because they
disguised their sales pitches as informational content. The
Commission recently filed a complaint against A. Glenn Braswell and
four of his corporations alleging, among other things, that the
defendants used deceptive advertising formats (including advertising
material portrayed as an independent health magazine) to market
their products. See FTC v. A. Glenn Braswell, et al., No. CV 03-3700
DT (PJWx) (C.D. Cal. filed May 27, 2004). For other deceptive format
enforcement actions brought by the Commission, see FTC v. Direct
Mktg. Concepts, Inc., Civ. No. 04-11136-GAO (D. Mass. filed June 1,
2004); Mega Sys., Int'l., Inc., 125 F.T.C. 973 (consent order) C-
3811 (June 8, 1998); Olsen Laboratories, Inc., 119 F.T.C. 161
(consent order) C-3556 (Feb. 6, 1995); Wyatt Mrktg. Corp., 118
F.T.C. 86 (consent order) C-3510 (July 27, 1994); Synchronal Corp.,
116 F.T.C. 989 (consent order) D-9251 (Oct. 1, 1993); Nat'l. Media
Corp., 116 F.T.C. 549 (consent order) C-3441 (June 24, 1993); CC
Pollen Co., 116 F.T.C. 206 (consent order) C-3418 (March 16, 1993)
(consent order); Nu-Day Enterprises, Inc., 115 F.T.C. 479 (consent
order) C-3380 (Apr. 22, 1992); Twin Star Productions, 113 F.T.C. 847
(consent order) C-3307 (Oct. 2, 1990) (consent order); JS&A Group,
Inc., 111 F.T.C. 522 (consent order) C-3248 (Feb. 24, 1989).
\139\ See final Rule 316.3(a)(1): ``If an electronic mail
message consists exclusively of the commercial advertisement or
promotion of a commercial product or service, then the `primary
purpose' of the message shall be deemed to be commercial.''
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a. Alternate Approaches Suggested by Commenters
A handful of alternative proposals were suggested by commenters.
MBNA suggested framing the test in terms of when messages are non-
commercial and non-transactional/relationship rather than in terms of
when they are commercial.\140\ Specifically, MBNA recommended that the
primary purpose of an e-mail message be deemed to be non-commercial if
the ``other'' (i.e., non-commercial, non-transactional/relationship)
content is referenced in the subject line, and begins to appear at or
near the beginning of the message. The test proposed by MBNA includes
the inverse of the subject line criterion in the proposed Rule, but
eliminates the net impression criterion in favor of a placement
standard, such as that used in evaluating e-mail messages containing
commercial and transactional or relationship content.
---------------------------------------------------------------------------
\140\ MBNA.
---------------------------------------------------------------------------
The final Rule determines whether an e-mail message is commercial
based on a reasonable recipient's interpretation of the subject line,
and, if necessary, the net impression made by the body of the message.
Therefore, if the subject line of a dual-purpose message only
references the ``other'' content included in the message, then the
recipient could not reasonably interpret the subject line as
commercial. Rather, a recipient would reasonably view it as ``other.''
Substituting the inverse test proposed by MBNA would not materially
modify this analysis, but rather would add a duplicative criterion for
determining when a subject line refers to ``other'' content. The
Commission declines to add this criterion as it is unnecessary.
The Commission also rejects MBNA's suggestion regarding the use of
a ``placement only'' test in lieu of the net impression standard. As
discussed above, the placement criterion is used to evaluate dual-
purpose e-mail messages that involve commercial content and
transactional or relationship content. An objective test that focuses
only on placement of the transactional or relationship content at the
beginning of the message is proper because Congress identified this
content as being important to consumers.\141\ Based on the record, the
Commission does not believe the placement standard is appropriate for
dual-purpose messages that combine commercial content and non-
commercial, non-transactional/relationship content. In this context, an
objective placement standard would give spammers the ability to easily
structure even primarily commercial e-mail messages in a way to evade
CAN-SPAM. For example, if the sender placed paragraphs of random words
at the beginning of a message, and then followed them with a one-line
link to a commercial Web site, under a placement analysis, this message
would not be commercial. However, under the more flexible net
impression test, a reasonable recipient would likely conclude that the
primary purpose of the message is commercial. Therefore, the Commission
continues to believe that the net impression standard will be a more
effective means of determining the primary purpose of messages that
contain commercial and ``other'' content, and therefore, declines to
make the suggested modification.
---------------------------------------------------------------------------
\141\ Because these senders have a business relationship with
their recipients, the likelihood of consumer harm is reduced. See
NPRM, 69 FR at 50096.
---------------------------------------------------------------------------
Experian suggested making the test conjunctive by joining the
subject line and net impression criteria clauses with an ``and'' rather
than an ``or.'' For this type of dual-purpose message to be considered
commercial under Experian's proposal, a reasonable recipient would need
to interpret the subject line of an e-mail message as demonstrating
that a message is commercial and conclude that the primary purpose of
the body of the message is the commercial advertisement or promotion of
a commercial product or service. The Commission declines to frame the
test in this way, because it believes that the subject line is of
independent importance to recipients as they review the e-mail they
receive. As noted in the NPRM, recipients rely upon the content of the
subject line in determining whether to open and read a message, or
delete it.\142\ Therefore, the final Rule retains the two-part test for
evaluating the primary purpose of e-mail messages containing both
commercial and ``other'' content.
---------------------------------------------------------------------------
\142\ NPRM, 69 FR at 50095.
---------------------------------------------------------------------------
4. Criteria for E-mail Messages Containing Only Transactional or
Relationship Content
As discussed in detail above, the proposed Rule included a
provision addressing how to determine the primary purpose of an e-mail
message that contains only commercial content, as well as provisions
dealing with two types of dual purpose messages: (1) Those containing
commercial plus transactional or relationship content, and (2) those
containing commercial plus ``other,'' non-transactional or relationship
content.\143\ The proposed Rule, however, did not include a provision
addressing how an e-mail message containing only transactional or
relationship content would be treated under the Rule.
---------------------------------------------------------------------------
\143\ See proposed Rule sections 316.3(a)(1) (commercial only);
316.3(a)(2) (commercial plus transactional or relationship) and
316.3(a)(3) (commercial plus ``other,'' non-transactional or
relationship).
---------------------------------------------------------------------------
A small number of commenters raised this omission, and sought
clarification regarding the treatment of an e-mail message that
contains only transactional or relationship content.\144\ In response,
the final Rule contains an additional provision that focuses
specifically on those e-mail messages that contain only transactional
or relationship content. Specifically, section 316.3(b) of the final
Rule states:
---------------------------------------------------------------------------
\144\ See, e.g., NetCoalition.
In applying the term ``transactional or relationship message''
defined in the CAN-SPAM Act, 15 U.S.C. 7702(17), the ``primary
purpose'' of an electronic mail message shall be deemed to be
transactional or relationship if the electronic mail message
consists exclusively of transactional or relationship content as set
---------------------------------------------------------------------------
forth in paragraph (c) of this section.
By including this provision, the Commission believes at least two
purposes are served. First, the mandate of the CAN-SPAM Act is carried
out. The Act requires that the Commission set forth regulations
defining the criteria by which the primary purpose of an e-mail message
may be discerned. This ``primary purpose'' language is found in the Act
in both the definition of ``commercial electronic mail message'' \145\
and the definition of ``transactional or relationship message.'' \146\
Therefore, for the sake of symmetry, the Commission has included
parallel provisions in the final Rule that address both purely
commercial and purely transactional or relationship messages.
---------------------------------------------------------------------------
\145\ 15 U.S.C. 7702(2).
\146\ 15 U.S.C. 7702(17).
---------------------------------------------------------------------------
Secondly, the inclusion of this provision is directly responsive to
commenters who expressed concern that, without it, certain
transactional messages could be mis-categorized as commercial under the
dual purpose test for commercial plus transactional messages.\147\ The
text of section 316.3(b) of the final Rule clarifies for industry
members their obligations when sending messages that contain
exclusively content that falls into one or more of the
[[Page 3124]]
transactional or relationship categories set forth in section 316.3(c)
of the final Rule. Specifically, such messages are deemed to have a
primary purpose that is transactional or relationship and, thus, are
subject to only the Act's prohibition against false or misleading
transmission information.\148\ The Commission believes that this
clarification will ease the compliance burden for those senders who
transmit exclusively transactional or relationship content, and will
better effectuate the mandate of the Act.
---------------------------------------------------------------------------
\147\ See, e.g., NetCoalition; NRF.
\148\ See 15 U.S.C. 7704(a)(1), which applies equally to
``commercial electronic mail messages'' and ``transactional or
relationship messages.'' The Act's other requirements and
prohibitions are targeted at ``commercial electronic mail
messages.''
---------------------------------------------------------------------------
Therefore, the final Rule includes section 316.3(b) to ensure that
messages containing only transactional or relationship content are
categorized as such.
5. Commenters' Constitutional Challenges to the Commission's Criteria
Facilitating the Determination of an e-mail Message's Primary Purpose
Commenters' constitutional arguments addressed two primary aspects
of CAN-SPAM's regulation of e-mail messages: whether the Act's
regulation of e-mail is constitutional, and whether the Commission's
criteria for determining whether the primary purpose of an e-mail
message is commercial under CAN-SPAM are constitutional.
a. The Constitutionality of CAN-SPAM
Some commenters claimed that CAN-SPAM cannot withstand First
Amendment scrutiny.\149\ In Central Hudson Gas & Elec. Corp. v. Pub.
Serv. Comm'n of New York, 447 U.S. 557 (1980), the Supreme Court
established the applicable analytical framework for determining the
constitutionality of a regulation of commercial speech that is not
misleading and does not otherwise involve illegal activity. Under that
framework, the regulation: (1) Must serve a substantial governmental
interest; (2) must directly advance this interest; and (3) is not more
extensive than necessary to serve the government's interests \150\--
that is, there must be ``a `fit' between the legislative ends and the
means chosen to accomplish those ends * * * a fit that is not
necessarily perfect, but reasonable * * * that employs not necessarily
the least restrictive means but * * * a means narrowly tailored to
achieve the desired objective.'' \151\ Three commenters argued that
CAN-SPAM fails to satisfy any part of this test.\152\ These commenters,
and others, argued that CAN-SPAM must meet the ``strict scrutiny''
First Amendment standard.\153\ According to NAA, under that standard, a
regulation must identify a compelling government interest and must be
the least restrictive means of satisfying that interest.
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\149\ See EFF; MPA; MPAA; NAA; PMA.
\150\ Central Hudson, 447 U.S. at 566.
\151\ Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 469,
480 (1989).
\152\ See MPA; MPAA; NAA.
\153\ See EFF; MPA; MPAA; NAA; PMA.
---------------------------------------------------------------------------
CAN-SPAM regulates commercial e-mail messages, and it does not
regulate non-commercial e-mail.\154\ The proper standard to assess the
Act's regulation of e-mail, therefore, is Central Hudson's test, not
strict scrutiny. CAN-SPAM's regulation of commercial e-mail messages
clearly satisfies the Central Hudson test. First, as explained in
section 7701 of the Act, CAN-SPAM addresses two substantial government
interests that the Supreme Court has recognized: it protects
individuals' privacy,\155\ and it protects individuals from fraudulent
and deceptive marketing.\156\ In addition, CAN-SPAM advances another
interest specifically articulated by Congress: it promotes the
effectiveness of e-mail as a valuable means of communication.\157\ No
commenter argued that these are not substantial government interests.
---------------------------------------------------------------------------
\154\ 15 U.S.C. 7701(b).
\155\ See Rowan v. Post Office Dept., 397 U.S. 728 (1970) (The
government has a substantial interest in protecting the privacy of
individuals in their homes.); Frisby v. Schultz, 487 U.S. 474, 485
(1988) (``Individuals are not required to welcome unwanted speech
into their own homes and the government may protect this
freedom.''); see also Mainstream Mktg. Servs. v. FTC, 358 F.3d 1228
(10th Cir. 2004) (holding that protecting the privacy of individuals
in their homes and protecting consumers against the risk of
fraudulent and abusive solicitation are ``undisputedly substantial
government interests'').
\156\ See Watchtower Bible and Tract Soc'y v. Village of
Stratton, 536 U.S. 150 (2002) (noting that precedents establish that
prevention of fraud, prevention of crime, and protection of
residents' privacy are important interests that the government may
seek to safeguard through some form of regulation); Schaumburg v.
Citizens for Better Env't., 444 U.S. 620, 637 (1980) (protecting the
public from fraud, crime, and undue annoyance are indeed
substantial); see also Mainstream, 358 F.3d 1228.
\157\ Section 7701(a) (1) and (2) of CAN-SPAM states:
``Electronic mail has become an extremely important and popular
means of communication, relied on by millions of Americans on a
daily basis for personal and commercial purposes. Its low cost and
global reach make it extremely convenient and efficient, and offer
unique opportunities for the development and growth of frictionless
commerce. The convenience and efficiency of electronic mail are
threatened by the extremely rapid growth in the volume of
unsolicited commercial electronic mail. Unsolicited commercial
electronic mail is currently estimated to account for over half of
all electronic mail traffic, up from an estimated 7 percent in 2001,
and the volume continues to rise. Most of these messages are
fraudulent or deceptive in one or more respects.'' 15 U.S.C.
7701(a)(1) and (2).
---------------------------------------------------------------------------
Second, CAN-SPAM directly advances these substantial government
interests. CAN-SPAM protects consumers' privacy by allowing individual
e-mail recipients to choose whether to opt-out of receiving additional
commercial e-mail messages from any particular sender and by requiring
commercial e-mail messages to clearly and conspicuously disclose the
opt-out mechanism. CAN-SPAM protects consumers from fraudulent or
deceptive e-mail marketing by prohibiting false, misleading, or
deceptive transmission or subject line information. In addition, CAN-
SPAM advances the governmental interest in promoting e-mail as a
communication tool by allowing individual recipients to opt-out of
future unwanted commercial messages, thus reducing the likelihood that
wanted electronic mail messages ``will be lost, overlooked, or
discarded amidst the larger volume of unwanted messages.'' \158\
---------------------------------------------------------------------------
\158\ 15 U.S.C. 7701(a)(4).
---------------------------------------------------------------------------
Third, CAN-SPAM is not more extensive than necessary to serve the
government's interests.\159\ ``The Government is not required to employ
the least restrictive means conceivable, but it must demonstrate narrow
tailoring of the challenged regulation to the asserted interest--`a fit
that is not necessarily perfect, but reasonable; that represents not
necessarily the single best disposition but one whose scope is in
proportion to the interest served.' '' \160\ The Act protects
consumers' privacy by giving e-mail recipients the chance to opt-out of
future commercial e-mail messages from a particular sender; CAN-SPAM
does not give this control to the government, and it does not prohibit
any marketer from sending a commercial e-mail message to any recipient
until a recipient submits an opt-out request. CAN-SPAM protects
consumers from fraud and deception by prohibiting misleading
transmission information and subject lines, and by requiring disclosure
that the message is an advertisement and disclosure of the sender's
address. CAN-SPAM promotes e-mail as a communications tool by allowing
recipients to stop unwanted commercial messages one sender at a time.
No commenter argued that the fit between these measures and these
interests is unreasonable. Thus, CAN-SPAM's regulation of commercial e-
mail
[[Page 3125]]
messages satisfies Central Hudson's test for regulations addressing
commercial speech.
---------------------------------------------------------------------------
\159\ See Central Hudson, 447 U.S. at 566.
\160\ Greater New Orleans Broadcasting Assoc., Inc. v. United
States, 527 U.S. 173, 188 (1999) (quoting Bd. of Trs. of State Univ.
of N.Y., 492 U.S. at 480).
---------------------------------------------------------------------------
b. The Constitutionality of the Commission's Criteria
Commenters responding to the Commission's proposed criteria in the
NPRM also argued that the Commission's criteria--as opposed to the Act
itself--were unconstitutional.\161\ These commenters claimed that the
criteria would improperly subject non-commercial speech within e-mail
messages to CAN-SPAM's regulation of commercial e-mail messages. These
commenters--mostly representing periodical publishers--typically
requested a blanket exemption from CAN-SPAM for all bona fide
newsletters and other periodicals delivered via e-mail.\162\ The
Commission believes that the final Rule's criteria facilitating the
determination of an e-mail message's primary purpose likely serve to
exclude bona fide newsletters and other such publications from
regulation as commercial e-mail messages. Therefore, the Commission
declines to create a special blanket exemption for any particular group
of e-mail messages.
---------------------------------------------------------------------------
\161\ See Courthouse; EFF; MPAA; NAA.
\162\ See Courthouse; MPA; NAA.
---------------------------------------------------------------------------
The Supreme Court has articulated its understanding of what
constitutes commercial speech in various ways in various decisions. For
example, the speech at issue in Bolger v. Youngs Drug Products
Corp.,\163\ was deemed commercial where the speech was conceded to be
an advertisement, the speech referred to a particular product, and the
speaker had an economic motive. In Virginia State Board of Pharmacy v.
Virginia Citizens Consumer Council, Inc.,\164\ the speech at issue was
deemed commercial because it did no more than propose a commercial
transaction. The Commission believes that the concept embodied in
section 7702(2) of CAN-SPAM and incorporated in the final Rule's
``primary purpose'' provisions is consistent with the general
principles underlying these precedents. At any rate, the Commission
wishes to emphasize in the strongest possible terms that it does not
intend for the criteria it is adopting to result in the regulation of
non-commercial speech as commercial e-mail under the CAN-SPAM
regulatory scheme. To make this intention as express and as clear as
possible, the Commission has added the following as footnote 1 in
section 316.3(a) of the final Rule: ``The Commission does not intend
for these criteria to treat as a `commercial electronic mail message'
anything that is not commercial speech.'' The Commission intends that
the rules it adopts under CAN-SPAM be consistent both with Congress's
intent regarding the scope of the Act, and with applicable First
Amendment decisions.\165\
---------------------------------------------------------------------------
\163\ 463 U.S. 60 (1983).
\164\ 425 U.S. 748 (1976).
\165\ There are several statements in the legislative history
expressing the intentions of members of Congress that CAN-SPAM not
encroach on transactional or relationship e-mail communications, or
on fully-protected non-commercial speech. For example, Senator Wyden
expressed his intent that CAN-SPAM not interfere ``with a company's
ability to use e-mail to inform customers of warranty information,
provide account holders with monthly account statements, and so
forth.'' 149 Cong. Rec. S5208 (Apr. 10, 2003). Similarly,
Representative Sensenbrenner stated that ``the legislation concerns
only commercial and sexually explicit e-mail and is not intended to
intrude on the burgeoning use of e-mail to communicate for
political, news, personal and charitable purposes.'' 149 Cong. Rec.
H12193 (Nov. 21, 2003).
---------------------------------------------------------------------------
As it developed its ``primary purpose'' criteria, the Commission
was mindful of judicial holdings governing the regulation of
periodicals. As set forth above,\166\ one criterion for assessing
messages containing both commercial content and content that is neither
commercial nor transactional or relationship (e.g., unsolicited
periodicals) is whether a recipient reasonably interpreting the message
would likely conclude that the message's primary purpose is commercial.
That standard must be evaluated against relevant precedent. Two cases
cited by commenters offer useful guidance.\167\ In Hays County Guardian
v. Supple,\168\ the court held that a newspaper was not commercial
speech even when it included advertising matter because it also
contained matters of highest public concern. In Ad World, Inc. v.
Township of Doylestown,\169\ the court held that the line between
commercial and non-commercial speech for First Amendment purposes
cannot be drawn by some magic ratio of editorial to advertising
content. The Commission does not intend for its ``net impression''
standard for determining the primary purpose of e-mail messages
containing both commercial content and content that is neither
commercial nor transactional or relationship to treat bona fide
newsletters and other periodicals as commercial e-mail messages. On the
other hand, the Commission cannot, as some commenters insisted, grant a
blanket exemption to all messages that are ``bona fide newsletters.''
As the Commission noted in the NPRM, one of its concerns in this
proceeding has been that ``spammers not be able to structure their
messages to evade CAN-SPAM by placing them outside the technical
definition of `commercial electronic mail message.' A typical example
is a hypothetical message, unrequested by the recipient, that begins
with a Shakespearean sonnet (or paragraphs of random words) and
concludes with a one-line link to commercial Web site.'' \170\ As the
Commission noted, a recipient of such a message could reasonably
conclude that the message's primary purpose is commercial.\171\
---------------------------------------------------------------------------
\166\ Part II C 3 of this Statement of Basis and Purpose.
\167\ See MPA; NAA.
\168\ 969 F.2d 111 (5th Cir. 1992).
\169\ 672 F.2d 1136 (3rd Cir. 1982).
\170\ 69 FR at 50101 (Aug. 13, 2004).
\171\ Id.
---------------------------------------------------------------------------
Commenters advocating a bona fide newsletter exemption offered no
adequate explanation of how such an exemption could be limited. Most
importantly, they failed to explain how CAN-SPAM could continue to
treat as ``commercial'' the ``Shakespearean sonnet'' spam (unsolicited
messages coupling informational content--such as a Shakespearean
sonnet, aphorisms, or random words and phrases--with a sales pitch). To
preserve the protections against unwanted commercial speech that CAN-
SPAM grants, the Commission has determined to subject all messages
containing commercial content and content that is neither commercial
nor transactional or relationship to the same standard.
D. Section 316.4--Sexually Explicit Labeling Rule
This provision of the final Rule is retained from the proposed
Rule. Section 316.4 of the proposed Rule included the Sexually Explicit
Labeling Rule. In the August 13, 2004, NPRM, the only change proposed
to the Sexually Explicit Labeling Rule was to renumber it as section
316.4. The Sexually Explicit Labeling rule was originally numbered
section 316.1 when it was promulgated on April 19, 2004. The Commission
requested comment on this proposed change and did not receive any
responsive comments.
E. Section 316.5--Severability
This provision of the final Rule is retained from the proposed
Rule. The Commission did not receive any comment on this provision in
response to the NPRM. This provision, which is identical to the
analogous provision included in the Sexually Explicit Labeling Rule,
provides that if any portion of the final Rule is found invalid, the
remaining portions will
[[Page 3126]]
survive. This provision pertains to the entirety of the final Rule.
III. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, 44 U.S.C.
3506 (``PRA''), the Commission reviewed the proposed and final Rule.
The Rule does not impose any recordkeeping, reporting, or disclosure
requirements, nor does it otherwise constitute a ``collection of
information'' as defined in the regulations implementing the PRA.\172\
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\172\ See 5 CFR 1320.3(c).
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IV. Regulatory Flexibility Act
The NPRM included an initial regulatory flexibility analysis
(``IRFA'') under the Regulatory Flexibility Act (``RFA''),\173\ even
though the Commission did not expect that the proposed Rule would have
a significant economic impact on a substantial number of small
entities. In addition, the Commission invited public comment on the
proposed Rule's effect on small entities to ensure that no significant
impact would be overlooked.\174\
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\173\ 5 U.S.C. 601-612.
\174\ NPRM, 69 FR at 50103-04.
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This Final Regulatory Flexibility Analysis (``FRFA'') incorporates
the Commission's initial findings, as set forth in the August 13, 2004,
NPRM; addresses the comments submitted in response to the IRFA notice;
and describes the steps the Commission has taken in the final Rule to
minimize its impact on small entities consistent with the objectives of
the CAN-SPAM Act.
A. Succinct Statement of the Need for, and Objectives of, the Final
Rule
The final Rule was created pursuant to the requirement imposed by
the Controlling the Assault of Non-Solicited Pornography and Marketing
Act of 2003 (``CAN-SPAM'' or ``the Act'') that the Commission, not
later than 12 months after December 16, 2003, ``issue regulations
pursuant to section 7711 [of the Act] defining the relevant criteria to
facilitate the determination of the primary purpose of an electronic
mail message.''
B. Summary of Significant Issues Raised by the Public Comments in
Response to the IRFA
In the IRFA, the Commission sought comment regarding the impact of
the proposed Rule and any alternatives the Commission should consider,
with a specific focus on the effect of the Rule on small entities. The
public comments on the proposed Rule are discussed above throughout the
Statement of Basis and Purpose, as are the minor changes that have been
made in the final Rule. After reviewing the comments, including the
very small number that specifically addressed the impact of the Rule on
small entities, the Commission does not believe that the final Rule
will unduly burden the entities who send commercial electronic mail
messages or transactional or relationship mail messages.\175\
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\175\ The Commission received only a half-dozen comments
responding to the questions posed in the proposed Rule regarding the
impact of the Rule on small entities. See ACLI; Schwartz; State
Farm; Adknowledge; Mattathil. The thrust of the comments is that the
Commission should take care not to impose burdens on legitimate
sellers, but rather should focus on reining in senders of bulk
unsolicited e-mail messages. None addressed with specificity the
harms that would accrue from the Commission's proposed criteria for
determining the primary purpose of a commercial e-mail message.
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C. Explanation as to Why No Estimate Is Available Regarding the Number
of Small Entities to Which the Final Rule Will Apply
Determining a precise estimate of the number of small entities
subject to the proposed Rule, or describing those entities, is not
readily feasible for two reasons. First, there is insufficient publicly
available data to determine the number and type of small entities
currently using e-mail in any commercial setting. As noted in the IRFA,
the Rule will apply to `` `senders' of `commercial electronic mail
messages,' and, to a lesser extent, to `senders' of `transactional or
relationship messages.' '' \176\ Thus, regardless of size, any entity
that sends commercial e-mail messages containing the commercial
advertisement or promotion of a commercial product or service,\177\ or
transactional or relationship messages meeting one of the specific
categories set forth in the Rule for e-mail messages sent to recipients
with whom a sender has a prior relationship,\178\ will be subject to
the Rule. In the IRFA, the Commission set forth the few sources of data
publicly available to approximate the number of entities that send
commercial e-mail messages or transactional or relationship messages,
noting that ``[g]iven the paucity of data concerning the number of
small businesses that send commercial e-mail messages or transactional
or relationship messages, it is not possible to determine precisely how
many small businesses would be subject to the proposed Rule.'' \179\
None of the comments provided information regarding the number of
entities of any size that will be subject to the Rule.
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\176\ NPRM, 69 FR at 50103 (explaining that the CAN-SPAM Act's
structure and definitions were imported into the proposed Rule.)
\177\ Final Rule, 316.2(c) (definition of ``commercial
electronic mail message'') and 316.3 (setting forth the criteria by
which the primary purpose of an e-mail message is determined).
\178\ Final Rule, 316.2(n) (definition of ``transactional or
relationship message'') and 316.3 (setting forth the criteria by
which the primary purpose of an e-mail message is determined).
\179\ NPRM, 69 FR at 50104.
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The second reason that determining a precise estimate of the number
of small entities subject to the proposed Rule is not readily feasible
is that the assessment of whether the primary purpose of an e-mail
message is ``commercial,'' ``transactional or relationship,'' or
``other'' turns on a number of factors that will require factual
analysis on a case-by-case basis. Thus, even if the number of entities
who use e-mail in commercial dealings were known, the extent to which
the messages they send will be regulated by the Rule depends upon the
primary purpose of such messages, a determination which cannot be made
absent factual analysis.
D. Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Final Rule, Including an Estimate of the
Classes of Small Entities That Will Be Subject to the Requirements of
the Final Rule and the Type of Professional Skills That Will Be
Necessary To Implement the Final Rule
The final Rule sets forth the criteria for determining the primary
purpose of a commercial e-mail message and, thus, does not itself
impose any reporting, recordkeeping, or other compliance requirements
within the meaning of the Paperwork Reduction Act. Indeed, because the
final Rule imposes no substantive requirements, it is unlikely to
impose any costs whatsoever. Any costs attributable to CAN-SPAM are the
result of the substantive requirements of the Act itself--such as the
requirement that commercial e-mail messages include an opt-out
mechanism and certain disclosures--not the Commission's interpretive
final Rule. While one commenter expressed concerns about the additional
costs that may be associated with implementing the requirements of the
Rule,\180\ the commenter did not provide specific justification or data
to support such a concern. Thus, the Commission continues to believe
that the requirements of the Rule will not create a significant burden
on persons or entities, including small entities, who initiate
commercial e-mail messages or transactional or relationship messages.
[[Page 3127]]
The Rule sets forth criteria by which the primary purpose of an e-mail
message is determined. The Commission has not received any comments
that necessitate modifying its previous views of projected compliance
requirements or costs.
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\180\ Schwartz.
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E. Discussion of Significant Alternatives the Commission Considered
That Would Accomplish the Stated Objectives of the CAN-SPAM Act and
That Would Minimize Any Significant Economic Impact of the Final Rule
on Small Entities
Through the NPRM, the Commission sought to gather information
regarding the economic impact of CAN-SPAM's requirements on all
businesses, including small entities. The Commission requested public
comment on whether the proposed Rule would unduly burden either
entities who use e-mail to send messages defined as ``commercial'' or
``transactional or relationship'' messages under the Act and the FTC's
CAN-SPAM Rule; whether this burden is justified by offsetting benefits
to consumers; what effect the Rule will have on small entities that
initiate messages the primary purpose of which is commercial or
transactional or relationship; what costs will be incurred by small
entities to ``implement and comply'' with the Rule; and whether there
are ways the Rule could be modified to reduce the costs or burdens for
small entities while still being consistent with the requirements of
the Act.\181\ This information was requested by the Commission in an
attempt to minimize the final Rule's burden on all businesses,
including small entities.
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\181\ NPRM, 69 FR at 50103-50105.
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As explained earlier in the statement of basis and purpose, the
Commission has considered the comments and alternatives proposed by
such commenters, and continues to believe that the final Rule will not
create a significant economic impact on small entities or others who
send or initiate commercial e-mail messages or transactional or
relationship messages. The criteria adopted in the final Rule for
determining the primary purpose of a commercial e-mail message reflect
the Act's express requirements, which the Commission has no authority
to waive, as well as its determination that these criteria entail a
reasonable and relatively minimal compliance burden, when balanced
against the offsetting benefit of allowing e-mail recipients to choose
to limit further unwanted commercial electronic mail messages from
particular senders. The Commission has not received any comments that
lead it to believe that the final Rule will unduly burden either the
entities who sell, or those consumers who purchase, commercial products
and services through e-mail messages.
List of Subjects in 16 CFR Part 316
Advertising, Business and industry, Computer technology, Consumer
protection, Labeling.
0
Accordingly, for the reasons set forth in the preamble above, the
Commission amends title 16, Chapter I, Code of Federal Regulations, by
revising part 316 to read as follows:
PART 316--RULES IMPLEMENTING THE CAN-SPAM ACT OF 2003
Sec.
316.1 Scope.
316.2 Definitions.
316.3 Primary purpose.
316.4 Requirement to place warning labels on commercial electronic
mail that contains sexually oriented material.
316.5 Severability.
Authority: 15 U.S.C. 7701-7713.
Sec. 316.1 Scope.
This part implements the Controlling the Assault of Non-Solicited
Pornography and Marketing Act of 2003 (``CAN-SPAM Act''), 15 U.S.C.
7701-7713.
Sec. 316.2 Definitions.
(a) The definition of the term ``affirmative consent'' is the same
as the definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(1).
(b) ``Character'' means an element of the American Standard Code
for Information Interchange (``ASCII'') character set.
(c) The definition of the term ``commercial electronic mail
message'' is the same as the definition of that term in the CAN-SPAM
Act, 15 U.S.C. 7702(2).
(d) The definition of the term ``electronic mail address'' is the
same as the definition of that term in the CAN-SPAM Act, 15 U.S.C.
7702(5).
(e) The definition of the term ``electronic mail message'' is the
same as the definition of that term in the CAN-SPAM Act, 15 U.S.C.
7702(6).
(f) The definition of the term ``initiate'' is the same as the
definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(9).
(g) The definition of the term ``Internet'' is the same as the
definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(10).
(h) The definition of the term ``procure'' is the same as the
definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(12).
(i) The definition of the term ``protected computer'' is the same
as the definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(13).
(j) The definition of the term ``recipient'' is the same as the
definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(14).
(k) The definition of the term ``routine conveyance'' is the same
as the definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(15).
(l) The definition of the term ``sender'' is the same as the
definition of that term in the CAN-SPAM Act, 15 U.S.C. 7702(16).
(m) The definition of the term ``sexually oriented material'' is
the same as the definition of that term in the CAN-SPAM Act, 15 U.S.C.
7704(d)(4).
(n) The definition of the term ``transactional or relationship
message'' is the same as the definition of that term in the CAN-SPAM
Act, 15 U.S.C. 7702(17).
Sec. 316.3 Primary purpose.
(a) In applying the term ``commercial electronic mail message''
defined in the CAN-SPAM Act, 15 U.S.C. 7702(2), the ``primary purpose''
of an electronic mail message shall be deemed to be commercial based on
the criteria in paragraphs (a)(1) through (a)(3) and (b) of this
section: \1\
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\1\ The Commission does not intend for these criteria to treat
as a ``commercial electronic mail message'' anything that is not
commercial speech.
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(1) If an electronic mail message consists exclusively of the
commercial advertisement or promotion of a commercial product or
service, then the ``primary purpose'' of the message shall be deemed to
be commercial.
(2) If an electronic mail message contains both the commercial
advertisement or promotion of a commercial product or service as well
as transactional or relationship content as set forth in paragraph (c)
of this section, then the ``primary purpose'' of the message shall be
deemed to be commercial if:
(i) A recipient reasonably interpreting the subject line of the
electronic mail message would likely conclude that the message contains
the commercial advertisement or promotion of a commercial product or
service; or
(ii) The electronic mail message's transactional or relationship
content as set forth in paragraph (c) of this section does not appear,
in whole or in substantial part, at the beginning of the body of the
message.
(3) If an electronic mail message contains both the commercial
[[Page 3128]]
advertisement or promotion of a commercial product or service as well
as other content that is not transactional or relationship content as
set forth in paragraph (c) of this section, then the ``primary
purpose'' of the message shall be deemed to be commercial if:
(i) A recipient reasonably interpreting the subject line of the
electronic mail message would likely conclude that the message contains
the commercial advertisement or promotion of a commercial product or
service; or
(ii) A recipient reasonably interpreting the body of the message
would likely conclude that the primary purpose of the message is the
commercial advertisement or promotion of a commercial product or
service. Factors illustrative of those relevant to this interpretation
include the placement of content that is the commercial advertisement
or promotion of a commercial product or service, in whole or in
substantial part, at the beginning of the body of the message; the
proportion of the message dedicated to such content; and how color,
graphics, type size, and style are used to highlight commercial
content.
(b) In applying the term ``transactional or relationship message''
defined in the CAN-SPAM Act, 15 U.S.C. 7702(17), the ``primary
purpose'' of an electronic mail message shall be deemed to be
transactional or relationship if the electronic mail message consists
exclusively of transactional or relationship content as set forth in
paragraph (c) of this section.
(c) Transactional or relationship content of e-mail messages under
the CAN-SPAM Act is content:
(1) To facilitate, complete, or confirm a commercial transaction
that the recipient has previously agreed to enter into with the sender;
(2) To provide warranty information, product recall information, or
safety or security information with respect to a commercial product or
service used or purchased by the recipient;
(3) With respect to a subscription, membership, account, loan, or
comparable ongoing commercial relationship involving the ongoing
purchase or use by the recipient of products or services offered by the
sender, to provide--
(i) Notification concerning a change in the terms or features;
(ii) Notification of a change in the recipient's standing or
status; or
(iii) At regular periodic intervals, account balance information or
other type of account statement;
(4) To provide information directly related to an employment
relationship or related benefit plan in which the recipient is
currently involved, participating, or enrolled; or
(5) To deliver goods or services, including product updates or
upgrades, that the recipient is entitled to receive under the terms of
a transaction that the recipient has previously agreed to enter into
with the sender.
Sec. 316.4 Requirement to place warning labels on commercial
electronic mail that contains sexually oriented material.
(a) Any person who initiates, to a protected computer, the
transmission of a commercial electronic mail message that includes
sexually oriented material must:
(1) Exclude sexually oriented materials from the subject heading
for the electronic mail message and include in the subject heading the
phrase ``SEXUALLY-EXPLICIT:'' in capital letters as the first nineteen
(19) characters at the beginning of the subject line; \2\
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\2\ The phrase ``SEXUALLY-EXPLICIT'' comprises 17 characters,
including the dash between the two words. The colon (:) and the
space following the phrase are the 18th and 19th characters.
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(2) Provide that the content of the message that is initially
viewable by the recipient, when the message is opened by any recipient
and absent any further actions by the recipient, include only the
following information:
(i) The phrase ``SEXUALLY-EXPLICIT:'' in a clear and conspicuous
manner; \3\
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\3\ This phrase consists of nineteen (19) characters and is
identical to the phrase required in section 316.4(a)(1).
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(ii) Clear and conspicuous identification that the message is an
advertisement or solicitation;
(iii) Clear and conspicuous notice of the opportunity of a
recipient to decline to receive further commercial electronic mail
messages from the sender;
(iv) A functioning return electronic mail address or other
Internet-based mechanism, clearly and conspicuously displayed, that--
(A) A recipient may use to submit, in a manner specified in the
message, a reply electronic mail message or other form of Internet-
based communication requesting not to receive future commercial
electronic mail messages from that sender at the electronic mail
address where the message was received; and
(B) Remains capable of receiving such messages or communications
for no less than 30 days after the transmission of the original
message;
(v) Clear and conspicuous display of a valid physical postal
address of the sender; and
(vi) Any needed instructions on how to access, or activate a
mechanism to access, the sexually oriented material, preceded by a
clear and conspicuous statement that to avoid viewing the sexually
oriented material, a recipient should delete the e-mail message without
following such instructions.
(b) Prior affirmative consent. Paragraph (a) of this section does
not apply to the transmission of an electronic mail message if the
recipient has given prior affirmative consent to receipt of the
message.
Sec. 316.5 Severability.
The provisions of this part are separate and severable from one
another. If any provision is stayed or determined to be invalid, it is
the Commission's intention that the remaining provisions shall continue
in effect.
By direction of the Commission, Commissioner Leibowitz not
participating.
Donald S. Clark,
Secretary.
Note: The following appendix will not appear in the Code of
Federal Regulations.
List of Commenters and Acronyms--August 13, 2004 CAN-SPAM NPRM
AAM--American Association of Museums
AAMFT--American Association for Marriage and Family Therapy
ABM--American Business Media
ACA--ACA International
ACB--America's Community Bankers
ACLI--American Council of Life Insurers
Adknowledge--Adknowledge, Inc.
Administrative--Administrative Systems, Inc.
AE--Association Enterprise, Inc.
AeA--AEA--American Electronics Association
AFP--Association of Fundraising Professionals
AGSES--Association of Girl Scout Executives Staff
AHQI--Association Headquarters, Inc.
AIA--American Insurance Association
Almeida--Almeida, E
AMP--AMP Management Services
AMR--AMR
AMS--Alternative Management Solutions, Inc.
Amri--Amri, Joyce
Anast--Anast, Dave
AMGR--Association Management Resources
ASAE--American Society of Association Executives
ASM--Association & Society Management, Inc.
ASMI--Association and Society Management International, Inc.
Assoc-SG--Association Services Group
Assoc-Mgmt--Association Management Specialists
Associations--Group of Associations
Bahn--Bahn, William
Baker--Baker & Hostetler LLP
BofA--Bank of America Corporation
Beneteau--Beneteau, Rick
Bihl--Bihl, Thomas
[[Page 3129]]
Blake--Blake, Tammy
BLF--BLF Management
BMI--Broadcast Music, Inc.
Boock--Boock, Jeff
Brenner--Brenner, Mary Jane
Bronkema--Bronkema, Dawn
Cantrall--Cantrall & Associates
Cap--Cap, Eric
CASRO--Council of American Survey Research Organizations
CBA--Consumer Bankers Association
CIPL--Center For Information Policy Leadership
Clarion--Management Clarion Resources
Cleaver--Cleaver, Jack
CMOR--Council for Marketing and Opinion Research
Colman--Colman, Heather
Comerica--Comerica Incorporated
Cook--Cook, Jim
Courthouse--Courthouse News Service
Cullom--Cullom, Randy
CUNA--CUNA & Affiliates
Declined--declined4privacy
Dickert--Dickert, Don
Dietetic--American Dietetic Association
DiMarzo--DiMarzo, James
DMA--Direct Marketing Association, Inc.
DMA-NF--DMA Nonprofit Federation
Donahue--Donahue
Dotson--Dotson, Lloyd
DoubleClick--DoubleClick Inc.
Dunham--Dunham, David
Easter--Easter Associates, Inc.
Edge--Edge, Ronald D
EDI--Executive Director Incorporated
EFF--Electronic Frontier Foundation
Elliott--Elliott, LuAnn
Y. Elliott--Elliott, Yank
ECFCU--Empire Corporate Federal Credit Union
Entomological--Entomological Society of America
ERA--Electronic Retailing Association
ESPC--e-mail Service Provider Coalition
Evans--Evans, Neal
Experian--Experian Marketing Solutions
Fenlason--Fenlason, James
Fernley--Fernley & Fernley
Figg--Figg
Fraser--Fraser
French--French, Walt
Friesen--Friesen, Ruth Marlene
Frontline--Frontline Public Strategies Inc.
Frost--Frost, William
Fuller--Fuller, David
Gasser--Gasser, Charles
Geer--Geer, David
Goff--Goff, Cheryl
Harrington--Harrington Company
Harte--Harte-Hanks, Inc.
Hatcher--Hatcher, Clarence
Heywood--Heywood, Pamela
Hopkins--Hopkins, Richard
Hudson--Hudson, Ed
IAAMC--International Association of Association Management Companies
ICC--Internet Commerce Coalition
ICOP--International Council of Online Professionals
Incentive--Incentive Federation, Inc.
Independent--Independent Sector
Internomics--Internomics, Inc.
ITAA--Information Technology Association of America
Jack--Jack, James
JMP--JMP Productions
Johnson--Johnson, David
Katz--Katz, Max
Kellen--Kellen Company
Kemp--Kemp, Steven
Kempner--Kempner
Kershner--Kershner, Richard
KeySpan--KeySpan Energy Delivery New York and KeySpan Energy
Delivery Long Island
Krueger--Krueger, Jan
Krzyzak--Krzyzak
Lathrop--Lathrop, Paul
Lee--Lee, Paul
Macfarlane--Macfarlane, Jaye
MPA--Magazine Publishers of America
Major--Major, Harmony
MAM--Milti-Association Management
MasterCard--MasterCard International
Mattathil--Mattathil, George
Mattice--Mattice, Charles
MaxPatch--MaxPatch Services Inc.
MBA--Mortgage Bankers Association
MBNA--MBNA America Bank, N.A.
Melson--Melson, Dianna
Merlby--Merlby, Cameron & Hull
Midway--Midway Publishing, Inc.
Montgomery--Montgomery, Marvin
MPAA--Motion Picture Association of America
Mullins--Mullins
MultiService--MultiService Management Company
Murray--Murray, Russell
NAA--Newspaper Association of America
NADA--National Automobile Dealers Association
NAEDA--North American Equipment Dealers Association
NAEMSP--National Association of EMS Physicians
NAR--National Association of Realtors
NATCO--Organization for Transplant Professionals (North American
Transplant Coordinators Organization)
NatureLiving--NatureLiving Company
NBC--National Business Coalition On E-Commerce And Privacy
NCA--National Club Association
NCL--National Consumers League
Nelson--Nelson, Ralph
NetCoalition--NetCoalition
Nevins--Nevins, Jeri
NFCU--Navy Federal Credit Union
NNA--National Newspaper Association
NonProfit--NonProfit Team, Inc.
NRF--National Retail Federation
OEI--OEI
Parker--Parker, Cynthia
Payton--Payton, Marianne
PCUA--Pennsylvania Credit Union Association
Peters--Peters, James
PMA--Promotion Marketing Association
Pollock--Pollock, Duncan
Porter--Porter
Proctor--Proctor, Colleen
Quattromani--Quattromani, Renee
Reardon--Reardon, Dale
Recognition--National Association for Employee Recognition
Reed--Reed Elsevier Inc.
REM--REM Association Services
Resource--Resource Center for Associations
Ressler--Ressler, Ronald
Richard--Richard
Ringin--Ringin, Robert
Robbins--Robbins
Robson--Robson, Joe
Robstan--Robstan Group, Inc.
Rossbauer--Rossbauer, Richard
Roth--Roth, Martin
Rothman--Rothman, Andrew
Russell--Russell, Karin
Ryall--Ryall, Carol
Rygiol--Rygiol, John
Satchell--Satchell, Stephen
Schomaker--Schomaker
Schwartz--Schwartz & Ballen LLP
Shepperd--Shepperd, Steven
Sheridan--Sheridan, Mary
Shickle--Shickle, Don
Shiny--Shiny Apple Inc.
SIA--Securities Industry Association
SIIA--SIIA--Software & Information Industry Association
Silkensen--Silkensen, James
Smith--Smith, Mark
Solutions--Solutions for Associations, Inc.
Spriet--Spriet, Dennis
Sprint--Sprint Corporation
State Farm--State Farm Mutual Automobile Insurance Company
T-Team--T-Team Management
Talley--Talley Management Group, Inc.
THM--THMgmt, Inc.
Time Warner--Time Warner, Inc.
Tincher--Tincher
Triad--Triad Apartment Association
Truste--TRUSTe
Turner--Turner, Carsten
R. Turner--Turner, Russell
VCU--Virginia Credit Union, Inc.
Verizon--Verizon
Visa--Visa USA Inc.
Wachovia--Wachovia Corporation
Wanner--Wanner Associates
Watts--Watts
Wells Fargo--Wells Fargo & Company
Wemett--Wemett, Thomas
Westlake--Westlake, Randy
Weston--Weston, Rex
White--White, Mary
Yermish--Yermish, Aimee
Zeni--Zeni, Craig
[FR Doc. 05-974 Filed 1-18-05; 8:45 am]
BILLING CODE 6750-01-P