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Thursday, May 15, 2008

FTC Releases New Rule Provisions That Expand Company Responsibilities Under The CAN-SPAM Act

On Monday, May 12, 2008, the Federal Trade Commission (“FTC”) released a several new rules under the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act” or “Act”). The Act and the implementing rules establish standards for sending commercial email messages.

The new rules stem from two rulemaking proceedings and are intended to clarify the existing requirements as follows: :

(1) add a definition of the term “person” to clarify that CAN-SPAM’s obligations are not limited to natural persons;
(2) modify the definition of the term “sender” such that when multiple parties’ products and services are promoted, it is easier to determine which entity is responsible for CAN-SPAM compliance;
(3) clarify that a sender may satisfy the “valid physical postal address” by using a registered post office box or private mail box established under U.S. Postal Service regulations; and
(4) clarify that email recipients who wish to opt-out from receiving future email messages cannot be required to pay a fee, provide any information in addition to their email address and opt-out preferences, or otherwise be required to take any steps other than sending a reply email or visiting a single webpage.

The FTC also released a Statement of Business and Purpose (SBP), which addresses several topics that were addressed in the rulemaking proceeding but that are not subject to new rules. For example, the FTC declined to alter the length of time in which a sender may honor an opt-out request. The FTC also declined to expand the statutory definition beyond the five categories of “transactional” or “relationship” services it exempts from the CAN-SPAM Act’s requirements, as codified at 16 C.F.R. § 316.2(o).

These rules have the potential to promote greater marketing flexibility as they preserve the ability of entities to jointly and efficiently market products and services through commercial and promotional email. However, entities must be careful to understand the responsibilities that ensue from classification as a “sender” when such marketing endeavors are pursued.


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