CAN-SPAM Act: Definitions, Implementation, and Reporting Requirements

CAN-SPAM ActDefinitions, Implementation, and Reporting Requirements

[Federal Register: March 11, 2004 (Volume 69, Number 48)]

 

[Federal Register: March 11, 2004 (Volume 69, Number 48)]

[Proposed Rule] 

[Page 11775-11782]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr11mr04-34]  

 

 

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Part V

 

 

 

 

 

Federal Trade Commission

 

 

 

 

 

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16 CFR Part 316

 

 

 

Definitions, Implementation, and Reporting Requirements Under the CAN-

SPAM Act; Proposed Rule

 

 

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FEDERAL TRADE COMMISSION

 

16 CFR Part 316

 

[Project No. R411008]

RIN 3084-AA96

 

 

Definitions, Implementation, and Reporting Requirements Under the 

CAN-SPAM Act

 

AGENCY: Federal Trade Commission (FTC).

 

ACTION: Advance notice of proposed rulemaking; request for public 

comment.

 

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SUMMARY: The FTC is requesting comment on various topics related to 

Sec. Sec. 3(2)(c), 3(17)(B), 5(c)(1), 5(c)(2), and 13 of the 

Controlling the Assault of Non-Solicited Pornography and Marketing Act 

of 2003 (``CAN-SPAM Act'' or ``the Act''). In addition, the FTC is 

requesting comment on topics relevant to certain reports to Congress 

required by additional provisions of the CAN-SPAM Act.

 

DATES: Comments addressing the ``National Do Not E-mail'' Registry must 

be submitted on or before March 31, 2004. Comments addressing any other 

aspect of the CAN-SPAM Act must be submitted on or before April 12, 

2004.

 

ADDRESSES: Interested parties are invited to submit written comments. 

Comments should refer to ``CAN-SPAM Act Rulemaking, Project No. 

R411008'' to facilitate the organization of comments. A comment filed 

in paper form should include this reference both in the text and on the 

envelope, and should be mailed to the following address: Federal Trade 

Commission, CAN-sySPAM Act, Post Office Box 1030, Merrifield, VA 22116-

1030. Please note that courier and overnight deliveries cannot be 

accepted at this address. Courier and overnight deliveries should be 

delivered to the following address: Federal Trade Commission/Office of 

the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 

20580. Comments containing confidential material must be filed in paper 

form.

 An electronic comment can be filed by (1) clicking on http://www.regulations.gov

; (2) selecting ``Federal Trade Commission'' at 

 

``Search for Open Regulations;'' (3) locating the summary of this 

Notice; (4) clicking on ``Submit a Comment on this Regulation;'' and 

(5) completing the form. For a given electronic comment, any 

information placed in the following fields--``Title,'' ``First Name,'' 

``Last Name,'' ``Organization Name,'' ``State,'' ``Comment,'' and 

``Attachment''--will be publicly available on the FTC Web site. The 

fields marked with an asterisk on the form are required in order for 

the FTC to fully consider a particular comment. Commenters may choose 

not to fill in one or more of those fields, but if they do so, their 

comments may not be considered.

 The FTC Act and other laws the Commission administers permit the 

collection of public comments to consider and use in this proceeding as 

appropriate. All timely and responsive public comments with all 

required fields completed, whether filed in paper or electronic form, 

will be considered by the Commission, and will be available to the 

public on the FTC Web site, to the extent practicable, at http://www.ftc.gov.

 As a matter of discretion, the FTC makes every effort to 

 

remove home contact information for individuals from the public 

comments it receives before placing those comments on the FTC Web site. 

More information, including routine uses permitted by the Privacy Act, 

may be found in the FTC's privacy policy, at http://www.ftc.gov/ ftc/

 

privacy.htm.

 

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:

 

I. Background

 

 The CAN-SPAM Act, which took effect on January 1, 2004, imposes a 

series of new requirements on the use of commercial electronic mail 

messages (``email''). In addition, the Act gives federal civil and 

criminal enforcement authorities new tools to combat unsolicited 

commercial email (``UCE'' or ``spam''). The Act also allows state 

attorneys general to enforce its civil provisions, and creates a 

private right of action for providers of Internet access services.

 The CAN-SPAM Act directs the Commission to issue regulations, not 

later than 12 months following the enactment of the Act, ``defining the 

relevant criteria to facilitate the determination of the primary 

purpose of an electronic mail message.''1 The term ``the 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 

website operated for a commercial purpose.)'' 2

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 1 CAN-SPAM Act, Sec. 3(2)(C).

 2 CAN-SPAM Act, Sec. 3(2)(A) (emphasis supplied).

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 The CAN-SPAM Act also provides discretionary authority for the 

Commission to issue regulations concerning certain of the Act's other 

definitions and provisions.3 Specifically, the Commission is 

authorized to:

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 3 The Act authorizes the Commission to use notice and comment 

rulemaking pursuant to the Administrative Procedures Act, 5 U.S.C. 

553. CAN-SPAM Act, Sec. 13.

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  Modify the definition of the term 

``transactional or relationship message'' under the Act ``to the extent 

that such modification is necessary to accommodate changes in 

electronic mail technology or practices and accomplish the purposes of 

[the] Act;'' 4

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 4 CAN-SPAM Act, Sec. 3(17)(B).

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  Modify the 10-business-day period prescribed in 

the Act for honoring a recipient's opt-out request;5

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 5 CAN-SPAM Act, Sec. 5(c)(1)(A)-(C).

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  Specify activities or practices as aggravated 

violations (in addition to those set forth as such in Sec. 5(b) of the 

CAN-SPAM Act) ``if the Commission determines that those activities or 

practices are contributing substantially to the proliferation of 

commercial electronic mail messages that are unlawful under subsection 

[5(a) of the Act];'' 6 and

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 6 CAN-SPAM Act, Sec. 5(c)(2).

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  Issue regulations to implement the provisions of 

this Act.'' 7

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 7 CAN-SPAM Act, Sec. 13(a). This provision excludes from the 

scope of its general grant of rulemaking authority Sec. 4 of the 

Act (relating to criminal offenses) and Sec. 12 of the Act 

(expanding the scope of the Communications Act of 1934). In 

addition, Sec. 13(b) limits the general grant of rulemaking 

authority in Sec. 13(a) by specifying that the Commission may not 

use that authority to establish ``a requirement pursuant to Sec. 

5(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 Sec. 5(a)(5)(A) in any particular part 

of such a mail message (such as the subject line or body).'' Section 

5(a)(5)(A) provides that ``it is unlawful for any person to initiate 

the transmission of any commercial electronic mail message to a 

protected computer unless the message provides clear and conspicuous 

identification that the message is an advertisement or solicitation 

* * * ''

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 In issuing this Advance Notice of Proposed Rulemaking (``ANPR''), 

the Commission initiates the mandatory ``primary purpose'' rulemaking 

proceeding by soliciting comment on issues relating to that term and 

its use in the Act. In addition, this notice solicits comments on the 

several areas of discretionary regulation listed above. Finally, the 

Commission also seeks

 

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comment in this ANPR on a variety of topics relevant to certain reports 

that, pursuant to the mandate of the CAN-SPAM Act, the Commission must 

issue within the coming two years.

 

II. Mandatory ``Primary Purpose'' Rulemaking

 

 The CAN-SPAM Act mandates that the FTC issue regulations ``defining 

the relevant criteria to facilitate the determination of the primary 

purpose of an electronic mail message.'' This mandate is integral to 

the Act's definition of ``commercial electronic mail message.'' 8 

Generally, the Act applies only to messages that fall within this 

definition.9 Thus, the ``primary purpose'' regulation will elucidate 

how to determine whether a particular message constitutes a 

``commercial electronic mail message,'' and is therefore subject to the 

CAN-SPAM Act's requirements and prohibitions. Accordingly, the FTC 

seeks comment on how to determine an electronic mail message's primary 

purpose, including comment on criteria that would facilitate this 

determination.

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 8 CAN-SPAM, Sec. 3(2)(C).

 9 One provision, Sec. 5(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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III. Subjects for Discretionary Rulemaking Under the CAN-SPAM Act

 

 In addition to seeking comment on the mandatory ``primary purpose'' 

rulemaking, the Commission also seeks comment on the four areas of 

discretionary rulemaking that were established in the Act. These four 

areas, described in detail below, are: (1) The Act's definition of 

``transactional or relationship messages;'' (2) the 10-business-day 

period for processing opt-out requests; (3) the Act's enumeration of 

``aggravated violations;'' and (4) the implementation of the provisions 

of the CAN-SPAM Act generally.

 

A. Transactional or Relationship Messages

 

 The CAN-SPAM Act designates five broad categories of messages as 

``transactional or relationship messages.''10 The Act excludes these 

messages from its definition of ``commercial electronic mail message,'' 

11 and thus excludes them from most of the Act's substantive 

requirements and prohibitions.12 ``Transactional or relationship 

messages'' are those, the primary purpose of which is either:

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 10 CAN-SPAM Act, Sec. 3(17).

 11 CAN-SPAM Act, Sec. 3(2)(B).

 12 See note 9 above.

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  To facilitate, complete, or confirm a commercial 

transaction that the recipient has previously agreed to enter into with 

the sender;

  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;

  To provide specified types of information 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; 13

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 13 The specified types of information are: notification 

concerning a change in the terms or features; notification of a 

change in the recipient's standing or status; or regular periodic 

account statement or balance information. CAN-SPAM Act, Sec. 

3(17)(A)(iii).

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  To provide information directly related to an 

employment relationship or related benefit plan in which the recipient 

is currently involved, participating, or enrolled; or

  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.

 Section 3(17)(B) gives the Commission the authority to modify the 

definition in Sec. 3(17)(A) to ``expand or contract the categories of 

messages that are treated as ``transactional or relationship messages'' 

for the purposes of this Act to the extent that such modification is 

necessary to accommodate changes in electronic mail technology or 

practices and accomplish the purposes of the Act.'' 14 Accordingly, 

the FTC seeks comment on the categories of ``transactional or 

relationship messages'' identified in the Act, and on how changes in 

technology or practices might warrant modifications with respect to 

these categories to accomplish the purposes of the Act. The Commission 

seeks comment on additional categories of messages that changes in 

technology or practices might warrant excluding from the definition of 

``commercial electronic messages'' by designating them as 

``transactional or relationship messages.'' The Commission also seeks 

comment on additional categories of messages that might warrant 

designation as ``transactional or relationship messages'' to accomplish 

the purposes of the Act. The Commission also seeks comment on 

categories listed in Sec. 3(17) that, due to changing technology or 

practices, might become inappropriate to exclude from coverage of CAN-

SPAM's provisions as ``transactional or relationship messages.''

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 14 CAN-SPAM Act, Sec. 3(17)(B).

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B. 10-Business-Day Period for Processing Opt-Out Requests

 

 Section 5(a)(4) of the CAN-SPAM Act addresses the time within which 

a request to ``opt-out'' of receiving additional electronic mail 

messages must be honored. Section 5(a)(4)(A) prohibits senders and 

persons acting on their behalf from initiating the transmission of a 

commercial email message to any recipient who has opted out of 

receiving their commercial email messages. This section also provides 

that senders have ten (10) business days after receiving a recipient's 

opt-out request to process it and put it into effect.

 Section 5(c)(1) gives the Commission the authority to issue 

regulations modifying the 10-business-day period for processing 

recipients' opt-out requests if the Commission determines that a 

different time period would be more reasonable ``after taking into 

account (A) the purposes of [subsection 5(a)]; (B) the interests of 

recipients of commercial electronic mail; and (C) the burdens imposed 

on senders of lawful commercial electronic mail.'' 15 Accordingly, 

the FTC seeks comment on the reasonableness of the 10-business-day time 

period for processing opt-out requests, and on whether a different time 

period would be more reasonable, in view of the three considerations 

enumerated in the statute and the relative costs and benefits.

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 15 CAN-SPAM Act, Sec. 5(c)(1).

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C. Additional Aggravated Violations

 

 Section 5(c)(2) of the Act grants the Commission rulemaking 

authority with respect to the list of ``aggravated violations'' set 

forth in Sec. 5(b) of the Act. The practices listed in Sec. 5(b) 

include email address harvesting and dictionary attacks. The Act's 

provisions relating to enforcement by the States and by 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 Sec. 5(b) while also violating Sec. 5(a). 

Specifically, Sec. Sec. 7(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

 

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violation.16 The Commission seeks comment on what activities and 

practices, if any, should be added to the list of aggravated violations 

under Sec. 5(b) of the Act.

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 16 This heightened statutory damages calculation also applies 

when a court finds that the defendant's violations of Sec. 5(a) 

were committed ``willfully and knowingly.'' CAN-SPAM Act, Sec. Sec. 

7(f)(3)(C) and (g)(3)(C).

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D. Implementation of Provisions of the CAN-SPAM Act Generally

 

 Section 13 of the Act details the fourth and final area of 

discretionary rulemaking by the Commission under the CAN-SPAM Act. 

Specifically, Sec. 13(a) provides that the Commission may issue 

regulations to implement the provisions of the Act.17 Accordingly, 

the Commission seeks comment on any additional regulations that may 

help implement the provisions of the Act.

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 17 As noted above, the Act expressly excludes from this grant 

of rulemaking authority the criminal provisions in Sec. 4 and its 

amendment of the Communications Act of 1934 in Sec. 12. Section 

13(b) further limits the scope of this rulemaking authority by 

prohibiting the Commission from requiring any specific words, 

characters, marks, or labels in a commercial email pursuant to Sec. 

5(a)(5)(A), or from requiring the identification required by Sec. 

5(a)(5)(A) in any particular part of a commercial email, such as the 

subject line or body. See note 7, above.

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 Since the effective date of CAN-SPAM, several issues have 

repeatedly arisen that potentially may warrant rulemaking under Sec. 

13. The first of these involves a scenario where a sender of a 

commercial email message seeks to induce recipients to forward the 

message to friends and acquaintances, who, in turn, are urged to 

forward the message. The Commission seeks comment on whether it would 

further the purposes of CAN-SPAM or assist the efforts of companies and 

individuals seeking to comply with the Act if the Commission were to 

adopt rule provisions clarifying the legal obligations of initiators 

and recipients who forward messages in such ``forward-to-a-friend'' 

scenarios.

 The second issue involves whether several entities or persons 

simultaneously could be considered the ``sender'' of a particular 

electronic mail message under the terms of the Act. For example, an 

email message that promotes an upcoming conference and also includes 

ads from the companies sponsoring the conference may have more than one 

sender. A common concern regarding this type of message is whether it 

may be sent to a recipient who has previously opted out of receiving 

messages from one of the sponsoring companies whose ad is in the 

message. The Commission seeks comment on whether it would further the 

purposes of CAN-SPAM or assist the efforts of companies and individuals 

seeking to comply with the Act if the Commission were to adopt rule 

provisions clarifying the obligations of multiple senders under the 

Act.

 The third issue involves the requirement of Sec. 5(a)(5)(A)(iii) 

of the Act for initiators of commercial electronic mail to include in 

their messages, inter alia, ``a valid physical postal address of the 

sender.'' Some companies and individuals seeking to comply with the Act 

have sought guidance on what is necessary for an address to meet the 

requirements of the Act. Some have asked whether a valid physical 

postal address would include a Post Office box or commercial mail drop. 

The Commission seeks comment on whether it would further the purposes 

of CAN-SPAM or assist the efforts of companies and individuals seeking 

to comply with the Act if the Commission were to adopt rule provisions 

clarifying what constitutes a valid physical postal address of the 

sender.

 There may be other issues of interpretation or compliance that have 

not yet come to the attention of the Commission but that might warrant 

consideration for rulemaking under Sec. 13 of the Act. The Commission 

seeks comment on any such issues, and solicits specific recommendations 

for proposed provisions that might further the purposes of CAN-SPAM or 

assist the efforts of companies and individuals seeking to comply with 

the Act.

 

IV. Reports Required by CAN-SPAM

 

 CAN-SPAM requires the Commission to prepare and submit to Congress 

four separate reports within the next two years: A report on 

establishing a nationwide marketing Do Not E-mail registry to be 

submitted by June 16, 2004; a report on establishing a system for 

rewarding those who supply information about CAN-SPAM violations by 

September 16, 2004; a report setting forth a plan for requiring 

commercial email to be identifiable from its subject line by June 16, 

2005; and a report on the effectiveness of CAN-SPAM by December 16, 

2005.

 

A. National Do Not E-Mail Registry

 

 Section 9(a) of the CAN-SPAM Act mandates a Commission report 

setting forth ``a plan and timetable for establishing a nationwide 

marketing Do-Not-E-Mail registry.'' The report is to include ``an 

explanation of any practical, technical, security, privacy, 

enforceability, or other concerns that the Commission has regarding 

such a registry; and * * * an explanation of how the registry would be 

applied with respect to children with email accounts.''18 Moreover, 

Sec. 9(b) provides that ``the Commission may establish and implement 

the plan, but not earlier than 9 months after the date of enactment of 

this Act.'' Thus, Congress has authorized establishment of a National 

Do Not E-Mail Registry, but is interested in learning of potential 

concerns about practicality, technical feasibility, privacy, and 

enforceability that such a registry raises. The Commission issued a 

Request for Information (``RFI'') to potential vendors seeking 

information on how an effective registry might be structured,19 and 

is also seeking comment in response to this Notice that would assist it 

in preparing this report.

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 18 CAN-SPAM Act, Sec. 9(a).

 19 This RFI is available at: http://www.ftc.gov/ftc/oed/fmo/procure/040224donotemailrfi.pdf.

 Responses to this RFI were due on 

 

or before March 10, 2004.

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B. A System for Rewarding Those Who Supply Information About CAN-SPAM 

Violations

 

 Section 11(1) of the Act requires the Commission, on or before 

September 16, 2004, to submit a report to the Senate Committee on 

Commerce, Science, and Transportation and the House of Representatives 

Committee on Energy and Commerce setting forth a system for rewarding 

those who supply information about violations of the Act. The statute 

further specifies that the report include ``procedures for the 

Commission to grant a reward of not less than 20 percent of the total 

civil penalty collected for a violation of the Act to the first person 

that identifies the person in violation of the Act, and supplies 

information that leads to the successful collection of a civil penalty 

by the Commission.'' (The Act, however, does not authorize the 

Commission to establish or implement such a reward system.) In 

addition, the statute requires that the report also include 

``procedures to minimize the burden of submitting a complaint to the 

Commission concerning violations of [the CAN-SPAM] Act, including 

procedures to allow the electronic submission of complaints to the 

Commission.'' Accordingly, the Commission seeks comment that would 

assist it in preparing this report.

 

C. Labeling Commercial Electronic Mail

 

 Section 11(2) of the Act requires the Commission to submit a report 

that sets forth a plan for requiring commercial email to be 

identifiable from its subject line, or an explanation of any concerns 

the Commission has that cause the Commission to recommend against the

 

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plan.20 This report is due on or before June 16, 2005. Accordingly, 

the Commission seeks comment on how best to require that commercial 

email be identifiable from its subject line, and on concerns about 

implementing this type of labeling requirement. In particular, 

information is sought concerning the feasibility, costs, and benefits 

of labeling commercial email.

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 20 Section 11(2) expressly contemplates that the means for 

making commercial electronic mail identifiable from its subject line 

should be ``by means of compliance with Internet Engineering Task 

Force Standards, the use of the characters ``ADV'' in the subject 

line, or other comparable identifier.''

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D. Effectiveness and Enforcement of the CAN-SPAM Act

 

 Section 10 of the CAN-SPAM Act requires the Commission to submit a 

report to Congress providing a detailed analysis of the effectiveness 

and enforcement of the Act and the need (if any) for Congress to modify 

such provisions. This report is due on or before December 16, 2005, and 

must include:

  An analysis of the extent to which technological 

and marketplace developments, including changes in the nature of the 

devices through which consumers access their electronic mail messages, 

may affect the practicality and effectiveness of the Act;

  Analysis and recommendations concerning how to 

address commercial email that originates in or is transmitted through 

or to facilities or computers in other nations; and

  Analysis and recommendations concerning options 

for protecting consumers, including children, from receiving and 

viewing commercial email that is obscene or pornographic.

 Accordingly, the Commission seeks comment on how the effectiveness 

and enforcement of the Act should be assessed, and on the specific 

areas of inquiry set forth in Sec. 10 of the Act.

 

V. Communications by Outside Parties to Commissioners or Their Advisors

 

 Written communications and summaries or transcripts of oral 

communications respecting the merits of this proceeding from any 

outside party to any Commissioner or Commissioner's advisor will be 

placed on the public record. See 16 CFR 1.26(b)(5).

 

VI. Invitation to Comment

 

 All persons are hereby given notice of the opportunity to submit 

written data, views, facts, and arguments addressing the issues raised 

by this Notice. Written comments on the National Do Not E-Mail Registry 

must be submitted on or before March 31, 2004. Written comments on all 

other aspects of the CAN-SPAM Act must be submitted on or before April 

12, 2004. Comments should refer to ``CAN-SPAM Act Rulemaking, Project 

No. R411008'' to facilitate the organization of comments. A comment 

filed in paper form should include this reference both in the text and 

on the envelope, and should be mailed to the following address: Federal 

Trade Commission, CAN-SPAM Act, Post Office Box 1030, Merrifield, VA 

22116-1030. Please note that courier and overnight deliveries cannot be 

accepted at this address. Courier and overnight deliveries should be 

delivered to the following address: Federal Trade Commission/Office of 

the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 

20580. If the comment contains any material for which confidential 

treatment is requested, it must be filed in paper (rather than 

electronic) form, and the first page of the document must be clearly 

labeled ``Confidential.''21

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 21 Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 

accompanied by an explicit request for confidential treatment, 

including the factual and legal basis for the request, and must 

identify the specific portions of the comment to be withheld from 

the public record. The request will be granted or denied by the 

Commission's General Counsel, consistent with applicable law and the 

public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).

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 An electronic comment can be filed by (1) clicking on http://www.regulations.gov

; (2) selecting ``Federal Trade Commission'' at 

 

``Search for Open Regulations;'' (3) locating the summary of this 

Notice; (4) clicking on ``Submit a Comment on this Regulation;'' and 

(5) completing the form. For a given electronic comment, any 

information placed in the following fields--``Title,'' ``First Name,'' 

``Last Name,'' ``Organization Name,'' ``State,'' ``Comment,'' and 

``Attachment''--will be publicly available on the FTC Web site. The 

fields marked with an asterisk on the form are required in order for 

the FTC to fully consider a particular comment. Commenters may choose 

not to fill in one or more of those fields, but if they do so, their 

comments may not be considered.

 The FTC Act and other laws the Commission administers permit the 

collection of public comments to consider and use in this proceeding as 

appropriate. All timely and responsive public comments with all 

required fields completed, whether filed in paper or electronic form, 

will be considered by the Commission, and will be available to the 

public on the FTC Web site, to the extent practicable, at http://www.ftc.gov.

 As a matter of discretion, the FTC makes every effort to 

 

remove home contact information for individuals from the public 

comments it receives before placing those comments on the FTC Web site. 

More information, including routine uses permitted by the Privacy Act, 

may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm

.

 

 Without limiting the scope of issues on which it seeks comment, the 

Commission is particularly interested in receiving comments on the 

following questions. In responding to these questions, include 

detailed, factual support whenever possible.

 

A. Criteria for Determining Whether ``The Primary Purpose'' of an 

Electronic Mail Message is Commercial

 

 1. The term ``the primary purpose'' could be interpreted to mean 

that an email's commercial advertisement or promotion is more important 

than all of the email's other purposes combined. Does this 

interpretation provide relevant criteria to help determine the primary 

purpose of an email? Why or why not? When an email has more than one 

purpose, what determines whether one purpose is more important than all 

other purposes combined?

 2. The term ``the primary purpose'' could be interpreted to mean 

that the email's commercial advertisement or promotion is more 

important than any other single purpose of the email, but not 

necessarily more important than all other purposes combined. Does this 

interpretation provide relevant criteria to help determine the primary 

purpose of an email? Why or why not? When an email has more than one 

purpose, what determines whether one purpose is more important than any 

other purpose?

 3. In other contexts, the FTC has stated that marketing material is 

to be judged by the net impression that the material as a whole makes 

on the reasonable observer. The ``net impression'' standard has been 

used to assess the meaning of an advertisement and the adequacy of 

disclosures. This standard takes into account placement of disclosures 

within the marketing material, the proximity of disclosures to the 

relevant claims, the prominence of the disclosures, and whether other 

parts of the marketing material distract attention from the disclosure. 

Should this ``net impression'' analysis be applied to determining 

whether the primary purpose of an email is a commercial advertisement 

or promotion? Why or why not? Are there considerations unique to 

electronic mail that would influence the application of such analysis, 

and if so, how?

 

[[Page 11780]]

 

 4. The term ``the primary purpose'' could be interpreted to mean 

that a commercial advertisement or promotion in an email is more than 

incidental to the email. Does this interpretation provide relevant 

criteria to help determine ``the'' primary purpose of an email? Why or 

why not?

 5. In determining whether a commercial advertisement or promotion 

in an email is the primary purpose of the email, one approach could be 

to base the analysis on whether the commercial aspect of the email 

financially supports the other aspects of the email. For example, an 

electronic newsletter may be funded by advertising within the 

newsletter. Such advertising arguably would not constitute the primary 

purpose of the newsletter. Does the issue of whether the commercial 

aspect provides the financial support for non-commercial content 

provide relevant criteria to help determine the primary purpose of an 

email? Why or why not? Does it matter what the overall purpose of the 

newsletter is? Why or why not? Is this an appropriate way to approach 

the question of whether an email's primary purpose is commercial? Why 

or why not?

 6. Should the identity of an email's sender affect whether or not 

the primary purpose of the sender's email is a commercial advertisement 

or promotion? Why or why not? For example, if a professional sports 

league sends email promoting its involvement with a charitable 

organization, should that email be considered to have a commercial 

``primary purpose'' under the Act based on the league's ``for-profit'' 

status?

 7. Are there other ways to determine whether a commercial 

advertisement or promotion in an email is the primary purpose of the 

email? Do these approaches provide relevant criteria to help determine 

the primary purpose of an email? Why or why not?

 

B. Modifying What Is a ``Transactional or Relationship Message''

 

 1. Have any changes in electronic mail technology or practices 

occurred since the CAN-SPAM Act became effective on January 1, 2004, 

that would necessitate modification of the CAN-SPAM Act's definition of 

``transactional or relationship message'' to accomplish the purposes of 

the Act?

 2. Email messages that facilitate, complete, or confirm a 

commercial transaction that the recipient has previously agreed to 

enter into with the sender are considered transactional or relationship 

messages under the Act. Are the terms ``facilitate, complete, or 

confirm'' clear, or is further clarification needed to prevent evasion 

of the Act's requirements and prohibitions?

 3. Email messages that 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 are 

considered transactional or relationship messages under the Act. Should 

the Commission modify or elaborate on this definition? Why or why not?

 4. Email messages that provide notice concerning a change in the 

terms or features of 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 are considered transactional or relationship messages under the 

Act. Should the Commission modify or elaborate on this definition? Why 

or why not?

 5. Email messages that provide notification of a change in the 

recipient's standing or status 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 are considered transactional 

or relationship messages under the Act. Are the terms used in this 

subsection of the Act (Sec. 3(17)(A)(iii)) clear, or is further 

clarification needed to prevent evasion of the Act's requirements and 

prohibitions?

 6. Email messages that provide, at regular periodic intervals, 

account balance information or other types of account statements 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 are 

considered transactional or relationship messages under the Act. Should 

the Commission modify or elaborate on this definition? Why or why not?

 7. Email messages that provide information directly related to an 

employment relationship or related benefit plan in which the recipient 

is currently involved, participating, or enrolled are considered 

transactional or relationship messages under the Act. Should the 

Commission modify or elaborate on this definition? Why or why not?

 8. Email messages that 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 are considered transactional or relationship 

messages under the Act. Should the Commission modify or elaborate on 

this definition? Why or why not?

 9. Some transactional or relationship messages may also advertise 

or promote a commercial product or service. In such a case, is ``the 

primary purpose'' of the message relevant? If so, what criteria should 

determine what is ``the primary purpose'? Should such messages be 

deemed to be commercial email messages? Should they be deemed 

transactional or relationship messages? Why?

 

C. Modifying the 10-Business-Day Time Period for Processing Opt-Out 

Requests

 

 1. Is ten (10) business days an appropriate deadline for acting on 

an opt-out request by deleting the requester's email address from the 

sender's email directory or list? Why or why not? If not, what time 

limit would be appropriate? Why?

 2. What procedures are required to delete a person's email address 

from the sender's email directory or list? What reasons, if any, 

prevent such deletion in a time period shorter than ten (10) business 

days? What burdens, including costs, would be borne by senders if the 

time period were shortened? What benefits to consumers would result 

from a time deadline shorter than ten (10) business days for 

effectuating an opt-out request?

 3. What costs are associated with deleting a person's email address 

from a sender's email directory or list? What costs does the recipient 

bear from unwanted electronic mail during the period from submission of 

the request to the effectuation of that request?

 4. What currently is the average time to create and implement 

procedures to delete a person's email address from a sender's email 

directory or list following that person's opt-out request? What factors 

affect the length of time necessary to create and implement these 

procedures?

 5. What currently is the average time in which a request to be 

removed from an email list is processed once these procedures have been 

created and implemented? What factors affect the length of time 

necessary to process such a request?

 6. What is the industry standard, if any, regarding the time frame 

to create and implement procedures for processing opt-out requests? 

What is the industry standard, if any, regarding the time frame to 

process opt-out requests once procedures have been created and 

implemented?

 

[[Page 11781]]

 

 7. How are lists of email addresses used for electronic mail 

marketing maintained, distributed, and used? What impact, if any, do 

the maintenance, distribution, and use of these lists have on the time 

it takes to effectuate an opt-out request?

 8. How do the size and structure of the sender's business, the use 

of third-party emailers, and the manner in which opt-out requests are 

received affect the time it takes to effectuate an opt-out request?

 

D. Identifying Additional ``Aggravated Violations''

 

 1. Section 5(c)(2) of the Act gives the Commission authority to 

``specify additional activities or practices to which [Sec. 5(b)] 

applies if the Commission determines that those activities or practices 

are contributing substantially to the proliferation of commercial 

electronic mail messages that are unlawful under [Sec. 5(a)].'' 

Section 5(b) identifies four ``aggravated violations.'' What additional 

activities or practices, if any, should be treated as ``aggravated 

violations'' under the Act? Why should these activities or practices be 

considered ``aggravated violations'? How do these activities or 

practices contribute substantially to the proliferation of commercial 

email that violates Sec. 5(a)? Do these activities or practices have 

any use other than initiating email that violates the Act?

 2. Are there new technologies that have been developed or are in 

development that would contribute substantially to the proliferation of 

commercial email that is unlawful under Sec. 5(a)? If so, what are 

they? Should they be added to the list of ``aggravated violations'' 

under Sec. 5(b)? Why or why not? What are the costs and benefits to 

industry in implementing procedures to overcome these technologies? 

What are the costs and benefits to consumers? Do these new technologies 

have any use other than initiating email that violates the Act?

 

E. Issuing Regulations Implementing the Act

 

 1. Section 3(16) of the Act defines when a person is a ``sender'' 

of commercial email. The definition appears to contemplate that more 

than one person can be a ``sender'' of commercial email; for example, 

an email containing ads for four different companies. In such a case, 

who is the ``sender'' of the email? What costs or burdens may be 

imposed on such entities if all are determined to be ``senders''? What 

costs or burdens may be imposed on consumers if only the entity 

originating the email is determined to be the ``sender''? If a 

consumer previously has exercised his or her rights under Sec. 5(a)(3) 

by ``opting out'' from receiving commercial email from one of the 

companies advertised in the email example above, has Sec. 5(a)(4) of 

the Act been violated? If so, by whom?

 2. Should the Commission use its authority in Sec. 13 to issue 

regulations clarifying who meets the definition of ``sender'' under the 

Act? If so, how? If not, why not?

 3. The Act defines ``initiate'' to mean originate or transmit, or 

procure the origination or transmission of, a message. In turn, the 

term ``procure'' means to pay, provide consideration, or ``induce'' a 

person to initiate a message on one's behalf.

 a. Do ``forward-to-a-friend'' and similar marketing campaigns that 

rely on customers to refer or forward commercial emails to someone 

else fall within the parameters of ``inducing'' a person to initiate a 

message on behalf of someone else?

 b. Are there different types of such ``forwarding'' marketing 

campaigns? What forms do these campaigns take?

 c. Should these marketing campaigns have to comply with the Act? 

Why or why not? If so, who should be considered a person who 

``initiates'' the message when one recipient forwards the message to 

another person? Who should be required to provide an ``opt-out'' 

mechanism for the message? Should each person who forwards the message 

be required to comply with the Act? Should the original sender of the 

message remain liable for compliance with the Act after the original 

recipient forwards the message to someone else? Why or why not?

 d. Do the Act's requirements and prohibitions reach email messages 

containing advertisements sent by using a Web site that urges or 

enables individuals to email articles or other materials to friends or 

acquaintances? How, if at all, does the Act apply to this situation 

when recipients have previously ``opted-out'' of receiving emails from 

the advertised entities?

 e. Should unsolicited commercial email campaigns that rely on 

having customers refer or forward the email to other parties be 

treated differently from other unsolicited commercial email? Why or 

why not? If there are different types of these campaigns, should the 

different types be treated differently? Why or why not?

 f. If referrals or forwarding of emails should be distinguished 

from other types of email, how should they be distinguished? What, if 

any, restrictions should be placed on them? Why? What disclosures, if 

any, should be required? Why? Should the Commission distinguish between 

different types of ``forwarding'' campaigns? Why or why not?

 g. What are the costs and benefits of forwarded commercial email 

campaigns to consumers? To businesses? Are the costs and benefits to 

consumers and industry different for forwarded commercial email 

campaigns than for other types of unsolicited commercial email? Why or 

why not?

 4. Section 5(a)(5)(A)(iii) requires the disclosure of ``a valid 

physical postal address of the sender'' in each commercial electronic 

mail message. How should this required disclosure be interpreted? 

Should a PO Box be considered a ``valid physical postal address''? Why 

or why not? Should a commercial mail drop be considered a ``valid 

physical postal address''? Why or why not?

 5. Section 5(a)(1), regarding false or misleading transmission 

information, addresses information displayed in a message's ``from'' 

line. Is the Act sufficiently clear on what information may or may not 

be disclosed in the ``from'' line? What ``from'' line information 

should be considered acceptable under the Act? Why? If a sender's e-

mail address does not, on its face, identify the sender by name, does 

that email address comply with Sec. 5(a)(1)?

 

F. National Do Not E-Mail Registry Report

 

 1. The Commission is required to write a report setting forth a 

plan and timetable for establishing a nationwide marketing Do Not E-

mail Registry, including an explanation of any practical, technical, 

security, privacy, enforceability, or other concerns regarding such a 

registry, and an explanation of how the registry would be applied with 

respect to children with email accounts. The Commission issued a 

Request for Information (``RFI'') to potential vendors seeking 

information on how an effective registry might be structured, and is 

also seeking information from the public in this Notice. What 

practical, technical, security, privacy, enforceability, and other 

concerns exist with respect to establishment of such a registry? Can 

these concerns be overcome so that a registry would be workable and 

effective? If so, what might be an appropriate plan and timetable for 

establishing a registry? Is such a registry a practical, efficient, and 

workable method of solving the spam problem? What are the relative 

costs and benefits?

 

[[Page 11782]]

 

 2. How could such a registry be structured and applied to best 

protect children with email accounts? Could such a registry be 

effective as a means to protect children from inappropriate spam?

 

G. System for Rewarding Those Who Supply Information About CAN-SPAM 

Violations

 

 1. What kinds of information would be most useful in facilitating 

enforcement of the Act? What kinds of information can the FTC 

reasonably expect to receive? Would such information likely be received 

in a form and manner that would make it useful in an enforcement action 

to prove violations of the Act? How would this information advance the 

Commission's ability to identify and locate people who violate the Act? 

How could a system for rewarding those who supply information about 

violations of the Act be structured? What are the relative costs and 

benefits?

 2. What procedures would be necessary to determine who is ``the 

first person that identifies the person in violation of the Act, and 

supplies information that leads to the successful collection of a civil 

penalty by the Commission,'' as specified by the Act? What other 

procedures would be necessary to implement a reward system, e.g., to 

resolve disputes among competitors seeking to be ``the first person 

that identifies the person in violation of the Act''?

 3. Is the phrase ``identifies the person in violation of the Act'' 

sufficiently clear to provide a bright line with respect to who will be 

entitled to a reward? If not, how can deciding this issue be made more 

certain?

 4. How would the prospect of receiving a portion of civil penalties 

collected by the FTC affect existing incentives for persons who have 

information about the identity of spammers to come forward with such 

information?

 5. How would a reward system affect the behavior of ISPs and other 

industry participants with regard to initiating and conducting 

investigations of spammers, and other approaches to addressing 

unsolicited commercial email? Under what circumstances, if any, would 

ISPs and other industry participants likely submit information under a 

proposed reward system? What factors would be relevant to an ISP's 

choice whether to proceed under a reward system as opposed to 

proceeding under the private right of action for ISPs created by Sec. 

7(g) of the Act? Specifically, what kind of information would ISPs and 

other industry participants likely supply, and in what format? Would 

such information likely be received in a form and manner that would 

make it useful in an enforcement action to prove violations of the Act?

 6. How successful have been the efforts of private entities or 

others to establish and operate reward programs similar to the one 

contemplated in the Act? Have such reward programs been successful in 

eliciting information otherwise unavailable to support enforcement or 

other legal action? Have such reward programs been successful in 

achieving the goal of reducing or deterring certain conduct?

 7. How might the Commission implement ``procedures to minimize the 

burden of submitting a complaint to the Commission concerning 

violations of [the CAN-SPAM Act], including procedures to allow the 

electronic submission of complaints to the Commission,'' as provided by 

the Act?

 

H. Study of Effects of the CAN-SPAM Act

 

 1. The Commission is required to write a report providing a 

detailed analysis of the effectiveness and enforcement of the 

provisions of the Act and the need (if any) for the Congress to modify 

such provisions. What measures of the effectiveness of the Act should 

the Commission consider?

 2. Are there any developments likely to reach the market in the 

next two years that are likely to affect the effectiveness of the Act? 

How should the Commission monitor these developments?

 3. This report must include an analysis and recommendations 

concerning how to address commercial email that originates in or is 

transmitted through or to facilities or computers in other nations, 

including initiatives or policy provisions that the Federal government 

could pursue through international negotiations, fora, organizations, 

or institutions. Given the ease of falsifying header information, how 

can the Commission determine the extent to which email originates in or 

is transmitted through or to facilities or computers in other nations? 

How should the Commission conduct this analysis?

 4. This report must include an analysis and recommendations 

concerning options for protecting consumers, including children, from 

the receipt and viewing of commercial email that is obscene or 

pornographic. How should the Commission conduct this analysis?

 

I. Study of Subject Line Labeling

 

 1. Prior to the enactment of the CAN-SPAM Act, many states required 

that unsolicited non-adult commercial email have an ``ADV'' label. How 

was this provision enforced by the States? What obstacles to 

enforcement did the States encounter? What, if any, limitations were 

found in these laws that the Commission should consider addressing in 

the required report regarding subject line labeling?

 2. How effective is labeling?

 3. Should the Commission recommend that all unsolicited non-adult 

commercial email be labeled ``ADV ''? Why or why not?

 4. Would labeling, as part of a regime that includes other 

technological or law enforcement approaches, be an appropriate and 

effective tool to help control spam? Why or why not?

 5. What are the costs and benefits to industry of labeling?

 6. What are the costs and benefits to consumers of labeling?

 7. If the Commission recommends that non-adult commercial email 

have an ``ADV'' label, should it also recommend that senders be allowed 

to provide additional explanatory information in the subject line; 

e.g., ``ADV: Automobiles''? Why or why not?

 

J. Regulatory Flexibility Act

 

 1. What burden to small business does the Act impose in the Act's 

requirements that certain disclosures be made in commercial electronic 

mail messages? How, if at all, may the burdens associated with required 

disclosures be minimized?

 2. Does the Act impose any disparate impact on small businesses? If 

so, how may this disparate impact be minimized?

 3. Describe and, where feasible, estimate the number of small 

entities to which the Act applies.

 

VII. Conclusion

 

 The Commission will proceed from this ANPR with proposed rulemaking 

and drafting of required reports. Evaluation of comments submitted in 

response to this ANPR will comprise part of the Commission's rulemaking 

and report-drafting processes.

 

 By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 04-5500 Filed 3-10-04; 8:45 am]

 

BILLING CODE 6750-01-P

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