Outside Legal Counsel PLC

Looking Under the Lid of the CAN-SPAM Act

For Immediate Release | Dec 27, 2010

In 2003, Congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003. This federal law, commonly known as the CAN-SPAM Act, imposes certain requirements to send emails of a commercial nature. CAN-SPAM does not ban spam outright, but rather provides a code of conduct to regulate commercial email messaging practices. The law empowers the Federal Trade Commission, internet access service providers, state attorneys generals, and other state and federal agencies to enforce the Act through civil proceedings and imposes civil and equitable penalties for non-compliance. Criminal penalties may also be assessed under other federal laws such as obscenity, racketeering, and fraud.

However, it is important to note that emails of a personal nature are not subject to CAN-SPAM's requirements. Businesses should follow the CAN-SPAM Act requirements when designing commercial emails for mass distribution.

Note: The Michigan Legislature passed and enacted the Unsolicited Commercial E-mail Protection Act in 2003. Later in 2003, Congress enacted the CAN-SPAM Act in which the Act purports to preempt or override Michigan's anti-spam law. See Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348 (4th Cir. 2006) and Gordon v. Virtumundo, Inc., 575 F. 3d 1040 (9th Cir. 2009). To date, there has not been a reported case using Michigan's law against a Michigan business. A legal test as to the validity Michigan's law has also not occurred to date.

No Materially Misleading or False Messages Allowed
Regardless of what type of commercial email is sent (see below), all emails must use proper header and routing information, known as "truth-in-emailing requirements." Using false or materially misleading header information to hide the originating electronic mail address, domain name, or Internet Protocol address violates federal law. Email designers are also not permitted to use deceptive subject headings which would mislead a recipient regarding the contents or subject matter of the email.

Transactional-and-relationship vs. Content Emails
Beyond the general truth-in-emailing requirements, CAN-SPAM creates two sub-classes of commercial emails: transaction-and-relationship emails and commercial content emails.

Transactional-and-relationship emails are those types of messages which confirms or updates a customer on a sales order, provides a message regarding an already agreed-upon transaction (i.e. shipping status update), or provides a message for any other purpose allowed by promulgated federal regulations (i.e. product recalls, warranty information, or employment benefit plan changes). Provided the email is not materially misleading or false, these types of emails are normally considered exempt from most of the CAN-SPAM Act's additional affirmative requirements.

The other sub-type is commercial content emails. These emails advertise or promote a commercial product or service. Commercial content emails are subject to a number of additional requirements. Emails must clearly and conspicuously identify that the message is an advertisement or solicitation unless prior affirmative consent to receive of the message is given. A valid physical postal address of the sender must also be included. The email message must also provide the ability for the receiver to decline or opt-out from receiving additional emails within 10 days of request. This opt-out feature must be active for at least 30 days following transmission. A fee cannot be charged to opt-out.

Email Marketing is Permitted
Businesses and marketers can be assured that under federal law, truthful and meaningful email marketing is permitted. The CAN-SPAM Act itself states that email communication is "an extremely important and popular means of communication..." because the "low cost and global reach make[s] it extremely convenient and efficient… and offer unique opportunities for the development and growth of frictionless commerce." While Congress has created some regulation in the email marketing field, CAN-SPAM has been euphemistically dubbed the "You Can Spam" Act. As the Ninth Circuit noted "there are beneficial aspects to commercial e-mail, even bulk messaging, that Congress wanted to preserve, if not promote."

Philip L. Ellison, MBA, JD, Esq is an attorney, business counselor, and civil litigator with Michigan-based Outside Legal Counsel PLC. He has extensive experience in law, business management, corporate operations as well as internal and external communications. Visit his online profile at www.olcplc.com