Articles

New FTC Guidelines Provide Added Guidance For Classification Of Electronic Mail Messages Under The CAN-SPAM Act

Edward J. Marshall

The CAN-SPAM Act of 2003, which went into effect January 1, 2004, was enacted to address concerns about the negative effects of unsolicited commercial electronic mail (“e-mail”) messages (often called “spam”) on the efficiency and convenience of electronic mail as a whole, and to protect consumers from offensive or fraudulent e-mail messages.1 Although the desirability and effectiveness of the CAN-SPAM Act are debatable,2 a business must be mindful of the Act's possible impact on its legitimate marketing and customer relation campaigns. In particular, a business should be aware of the Federal Trade Commission's (“FTC's”) recently-issued guidelines for determining the primary purpose of an e-mail message3 so that legitimate, non-spam e-mail messages do not run afoul of the CAN-SPAM Act.

The CAN-SPAM Act regulates both commercial and transactional/relationship messages, e.g ., messages providing current customers new information about their accounts, renewal notices, etc., but commercial e-mail messages are generally subject to stricter standards.4 Consequently, determining the primary purpose of a given e-mail message is critical to determining the standards applicable to that message.5

The CAN-SPAM Act originally defined commercial e-mail messages as any electronic mail message, the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.6 On December 16, 2004 the (FTC) issued Final Rules to 16 CFR Part 316 (the “Final Rules”), which include, among other things, guidelines for determining when the primary purpose of an electronic mail message is commercial.7 The Final Rules for determining the primary purpose of an e-mail, i.e. rules for determining if an e-mail is to be treated as a commercial e-mail under the CAN-SPAM Act, take effect February 18, 2005,8 and are summarized below.

The primary purpose of an e-mail message will be commercial if:
a) the e-mail message includes only commercial advertisement or promotion of a commercial product or service;
b) the e-mail message includes both commercial content and transactional or relationship content, AND the recipient reasonably interprets the subject line to be commercial or the transactional/relationship content is not wholly or substantially at beginning of message body; or
c) the e-mail message includes both commercial content and non-commercial/transactional/relationship content, AND a recipient of the e-mail message reasonably interprets the subject line to be commercial or a recipient of the e-mail reasonably interprets the body of message to be commercial.9

There are a few noteworthy points regarding the Final Rules for determining the commercial character of an e-mail message. First, when determining whether a recipient should reasonably interpret the body of an e-mail to be commercial, as in item c) above, the placement of the commercial content, the portion of the message devoted to commercial content, and color/graphics/style used to highlight commercial content, are all factors to consider.10 But in determining whether the primary purpose of an e-mail message containing both commercial content and transactional or relationship content is commercial, as in item b), the amount of commercial content does not appear to be relevant.11 Thus, even if an e-mail message contained five paragraphs of relationship content and only one paragraph of other commercial content, the message would likely be interpreted as having a commercial primary purpose if the commercial content is placed prior to the relationship information in the e-mail.12

Also note that if an e-mail message includes any amount of commercial content, a recipient's reasonable interpretation of the subject line as indicating commercial content can be enough to cause the e-mail to be classified as commercial.13 Of course, to avoid any charges of fraud under the CAN-SPAM Act, e-mail promulgators should also avoid manipulating the contents of the subject line of an e-mail message to indicate a non-commercial purpose when the message's true purpose is commercial.14

In conclusion, if a business wants to avoid having the primary purpose of its e-mail messages misclassified, and thereby subject to stricter rules under the CAN-SPAM Act, it should be careful to follow the guidance provided by the FTC. This guidance includes placing any transactional or relationship content at the beginning of e-mail messages, and ensuring that the subject lines of e-mail messages are reasonably certain to be interpreted as non-commercial by message recipients.

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1Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003 § 2, 15 USCA § 7701 (2004).
2See , e.g. , Jeffrey D. Sullivan & Michael B. De Leeuw, Spam After CAN-SPAM: How Inconsistent Thinking Has Made A Hash Out Of Unsolicited Commercial E-Mail Policy, 20 Santa Clara Computer & High Tech L. J. 887 (2004).
3Federal Trade Commission, Definitions and Implementation Under the CAN-SPAM Act, Final Rule (Dec. 16, 2004) (not yet published in the Federal Register), available at http://www.ftc.gov/opa/2004/12/canspamfrn.htm . (last visited Jan. 12, 2005).
4Federal Trade Commission, The CAN-SPAM Act: Requirements for Commercial Emailers, Facts for Business (Apr. 2004), (“A ‘transactional or relationship message' -- email that facilitates an agreed upon transaction or updates a customer in an existing business relationship -- may not contain false or misleading routing information, but otherwise is exempt from most provisions of the CAN-SPAM Act.”), available at http://www/ftc.gove/spam .
5Federal Trade Commission, Definitions and Implementation Under the CAN-SPAM Act, Final Rule (Dec. 16, 2004) (“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.”), available at http://www.ftc.gov/opa/2004/12/canspamfrn.htm . (last visited Jan. 12, 2005).
615 USCA § 7702(2) (2004) .
7Federal Trade Commission, Definitions and Implementation Under the CAN-SPAM Act, Final Rule (Dec. 16, 2004), available at http://www.ftc.gov/opa/2004/12/canspamfrn.htm . (last visited Jan. 12, 2005).
8Id .
9Id. § 316.3(a).
10Id. § 316.3(a)(3).
11See id. § 316.3(a)(2)(ii).
12See id. (Note that this hypothetical is based upon on a strict reading of the statute).
13Id. § 316.3(a)(2)(i).
14See 15 USCA § 7702(2) (2004) (deceptive subject headings are not permitted).