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Reviewing the Basics of Federal Email Marketing Compliance
By Michael A. Goodman

With all the chatter about Facebook, Twitter, and other social media marketing channels, it might be easy to forget that federal law closely regulates email marketing. Federal standards permit campaigns of unsolicited commercial email, but establish important “dos” and “don’ts” for this form of marketing. This article provides an overview of these standards.

The key federal law is the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003. CAN-SPAM is supplemented by a related rule issued by the Federal Trade Commission that regulates email marketing generally and fills in some gaps left over from CAN-SPAM.

CAN-SPAM’s main objective is to regulate “commercial” email messages. A message is commercial if its “primary purpose” is to sell something. The FTC’s rule establishes detailed standards for determining whether a message’s primary purpose is commercial or not. These standards are particularly important when a message has more than one purpose, such as one combining a receipt or account statement (non-commercial content) with a promotion (commercial content). It is important to recognize that even a single commercial message is subject to CAN-SPAM, as are messages to people you know or do business with and business-to-business messages. The federal email marketing law is not limited to bulk, unsolicited, business-to-consumer email marketing campaigns.

Once you’ve determined that your messages are commercial and subject to CAN-SPAM, here are the main “dos” and “don’ts:” (1) DON’T use misleading “from” lines and transmission information (any “from” line that identifies you, your company, or your email service provider, if you use one, should be fine); (2) DON’T use a deceptive subject line (state email marketing laws requiring a subject line label, such as “ADV,” are likely preempted by CAN-SPAM, but you should discuss this with your legal team); (3) DO include an opt-out mechanism (must be Internet-based mechanism, such as reply email or link to web page); (4) DO honor opt-out requests within 10 business days; (5) DO include your street or mailing address; and (6) DO include a clear and conspicuous identification that your message is an advertisement.

The FTC’s CAN-SPAM rule adds to this list of “dos” and “don’ts” by addressing several tricky compliance issues. First, the rule covers “multiple-sender” messages (that is, messages promoting the goods or services of more than one company). Under CAN-SPAM alone, it would be nearly impossible for multiple-sender messages to comply due to the challenge of managing the opt-out lists of each seller. The FTC’s rule allows a group of sellers advertising in the same message to designate a single “sender” for purposes of CAN-SPAM compliance. This designated sender must be identified in the message’s “from” line and comply with the rest of CAN-SPAM.

Second, the FTC’s rule adds further regulation of CAN-SPAM’s opt-out standards. Specifically, the rule expressly prohibits senders from charging a fee, requiring recipients to submit anything other than their email addresses and opt-out preferences, or requiring recipients to visit more than one web page in connection with an opt-out request.

The FTC has also explained that senders are responsible for compliance in “forward to a friend” email marketing campaigns, if the sender pays recipients to forward its message to other people on its behalf. This can create substantial compliance challenges. For example, if a sender pays recipients to forward a message, and a recipient deletes a required disclosure, adds a misleading subject line, or forwards the message to someone who has submitted an opt-out request to the sender, that sender could be liable for violating CAN-SPAM. Senders must proceed with caution here.

Finally, speaking of liability, CAN-SPAM is enforced by the FTC, and states and providers of Internet access services can also bring enforcement actions. There is no private right of action for individual recipients of unlawful messages. Remedies can include civil penalties and statutory damages. Each message is considered a separate violation, so the penalties can quickly add up to an overwhelming amount in an email marketing campaign of any significant size.

Michael A. Goodman is a partner in the Washington, D.C., office of Hudson Cook, LLP. Michael can be reached at 202-327-9704 or by email at mgoodman@hudco.com.

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