E-mail Marketers Study Calif. Legalese

E-mail marketers are braced for any number of unintended consequences from the vague wording of California’s new anti-spam law.

The law, which is set to go into effect Jan. 1, has caused widespread confusion in the industry. The only thing that’s clear so far is that lawyers will be busy deconstructing what many email marketers say is the legislation’s imprecise language.

“One of the major concerns we have with [the law] is that many of the definitions were ambiguous and that it was going to be difficult to derive meaningful compliance guidelines,” said Trevor Hughes, executive director of the Network Advertising Initiative’s E-mail Service Provider Coalition.

The bill, signed into law last week by Calif. Gov. Gray Davis, forbids commercial emails unless a sender has a prior business relationship with the consumer or obtains “direct consent” to send advertisements. The law defines “direct consent” as: “the recipient has expressly consented to receive email advertisements from the advertiser, either in response to a clear and conspicuous request for the consent or at the recipient’s own initiative.”

Many email marketers predicted the legislation would result in an avalanche of frivolous lawsuits, thanks to the combined effects of the bill’s right of private action for consumers and the hazy definitions of just what qualifies as express consent. Some lawyers believe a California resident could sue for receiving commercial email from a business that did not receive direct consent for every marketing message, such as one from an affiliate.

“The winners are going to be the folks who are the litigators,” predicted Bigfoot Interactive CEO Al DiGuido.

DiGuido said one step Bigfoot has urged clients to take is to provide recipients with a list of advertisers that they are likely to receive advertisements from if they give their email addresses.

Publishers of email newsletters are at particular risk, according to Quinn Jalli, a lawyer and ISP relations manager at email marketer Mindshare Design, which is located in California. He said the law could easily be used to bring action against a publisher for sending advertisements to readers, even if the readers opted into receiving the newsletter, since they might not have directly consented to the ads.

“Clearly that’s not some kind of spam email,” Jalli said. “[Publishers] may win but it’s going to cost them money to win.”

The law’s interpretation could also severely affect third-party list providers. Since the bill requires a direct relationship, it would seem to preclude the use of third party lists, whether opt-in or not.

“In the span of one day, the entire business of email list acquisition could be changed by one state law,” said Michael Della Penna, Bigfoot Interactive’s chief marketing officer. “Overnight they have had their model completely turned around.”

Michael Mayor, chief executive of NetCreations, which rents third-party double opt-in email lists, said the law could end email prospecting in California.

“The California law is a prime example of desperate politicians rushing to win public accolades before educating themselves on the subject of responsible email marketing,” he said.

Mayor said NetCreations’ lawyers were still studying the law. While the company has the ability to segment its list by state, it does not have geographic information in many cases, since it is not a required opt-in field. Della Penna estimates that geographic data is availabe in about half of most email lists.

Jalli said the industry could deal with the stringent standards the California bill imposes by being more meticulous about documenting when and how consent was received from customers. Yet he agrees with Mayor that lawmakers did not show a sufficient understanding of the industry.

“The people making the definitions, I have to say, didn’t know what they were talking about,” he said.