The California Catch-22

The country’s up to its ears in well-intentioned, badly misguided legislation intended to staunch the unrelenting flow of spam into inboxes. Included is the proposed Do-Not-Spam registry (chief proponent Sen. Charles Schumer, who swears such a database would be protected by “military-style encryption,” last week posted the names and Zip codes of 13,736 of his constituents on his Web site. Oops.).

And there’s the new California spam law that will make life a living Hell for legitimate marketers (not to mention California’s court system), while doing little to nothing to stop the real, honest-to-goodness spammers.

Last week at the International Association of Privacy Professionals’ (IAPP’s) Privacy and Security Summit, I learned about more new California legislation that could make things worse — much worse — for marketers and consumers alike. Only with all the noise about gubernatorial elections and raging wildfires, the news probably hasn’t hit your radar yet.

Joanne McNabb, chief of the California Office of Privacy Protection, explained a slew of new privacy protection laws will go into effect from now through early 2005. Many are pretty good laws, and some may affect your business — so read them.

But SB 27, the information sharing disclosure, a.k.a. “Shine A Light” bill, will have grave and unintended consequences. The law is so restrictive it makes email append, and reverse append, all but illegal. It’s effective January 1, 2005.

Append, the practice of attaching real-world information such as name, address, and phone number, to an email address, has long been email marketing’s murkiest area. Many are unreserved in their expressions of distaste on the subject. “E-mail append is a disaster waiting to happen,” affirms privacy expert Ray Everett-Church.

Timing is everything, and timing is Shine A Light’s problem. California’s new spam law will make it illegal for marketers to email California residents (or California ISP subscribers, regardless of their location) under many circumstances. Penalties are severe, and ignorance of a recipient’s location is no excuse.

Of course, an email address usually reveals little or nothing about the physical location of the person it’s attached to. As a result, a number of email companies and database management vendors that peddle append, such as Experian and Acxiom, view California’s spam bill as a gigantic opportunity. They want marketers to pay them to learn who on their lists is in California. Value proposition: Be in compliance with the law.

Shine A Light sends an utterly different message: You’ve got one year to append, then the gig is up. Marketers must seriously weigh the decision to append or not. The consequences, either way, are potentially grave.

“It’s a path through a minefield. The sensible thing is to avoid the minefield altogether,” says Everett-Church. He cites practical issues, such as instances of a husband’s information appended to his wife’s as the couple goes through a divorce. “Setting those aside, it’s about information as a fungible good. You have a lot of risk for that data to be misappropriated or misused. Employees walk away with lists. More people are using tagged lists. That is going to highlight data exchange practices in a way that’s going to bring the message home to consumers.”

The Federal Trade Commission (FTC) hasn’t taken an official position on email append, but Staff Attorney Brian Huseman told me, “We haven’t spoken publicly on it, but at the Spam Forum there was consensus on all sides it [append] is not a good idea.”

When I asked DoubleClick’s Chief Privacy Officer Bennie Smith for his thoughts, he shook his head. DoubleClick’s Abacus division partners with Acxiom to offer append services. Smith says the law was intended to address offline marketing practices. Online implications, he believes, were not intentional.

Experian’s Ben Isaacson made a case in favor of append in ClickZ recently. At the IAPP conference, he told me his company plans to aggressively market append over the coming year, while there’s still time.

Jupiter Research Senior Analyst Jared Blank doubts marketers will rush to append their lists. “Append is looked on as so sketchy. This certainly doesn’t lend any more of an air of legitimacy to it. [The laws] will push companies toward not doing it, rather than doing it,” he said. “Long-time direct mail companies don’t see anything wrong with it. But companies that aren’t direct see something vaguely sinister about it, and this certainly doesn’t help the cause. This bill confirms their fears that there’s something wrong with append.”

J. Trevor Hughes, the conference chair and executive director of the Network Advertising Initiative (NAI) email service provider coalition, says the damned-if-you-do/damned-if-you-don’t double bind, “Is going to have to be decided by a judge. Which grey areas apply in both cases?”

Whether or not California’s spam bill is made redundant by Federal legislation, Shine A Light set the clock ticking on append. For some marketers, the choice will be a tough one. Others have a clear, not-with-a-10-foot-pole attitude toward the practice.

“Permission is not transferable,” says Mike Mayor, president of NetCreations.

Let us know your thoughts on the California laws and Federal spam legislation. We’ll post it in ClickZ’s Reader Feedback section.

Want more email marketing information? ClickZ E-Mail Strategies is an archive of all our email columns, organized by topic.

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