Internet Rules of the Road

Federal law bans some forms of junk e-mail and imposes fines and imprisonment on violators. Spam, or unsolicited e-mail, now makes up more than half of all e-mail messages, according to several surveys, and the volume continues to rise. 

CAN-SPAM Facts     The federal law generally overrides laws in more than 30 states.       The law covers foreign spam coming into the mailboxes of Americans, although FTC Chairman Tim Muris acknowledges "there can be difficulties in prosecuting people from outside the U.S."

The Direct Marketers Association (DMA) says e-mail marketing plays a vital role in enabling small businesses to break into and effectively compete in the marketplace.     In testimony before Congress, the DMA noted that "sending prospecting letters via postal mail or hiring a sales force may cost thousands — even millions — of dollars," while "e-mail may be sent for a fraction of the cost — increasing competition and decreasing costs for consumers," he said.     A DMA survey found that 45.8 million Americans made at least one purchase in the previous year in response to a legitimate e-mail ad for goods and services such as books, travel, and clothes. Those purchases generated more than $7.1 billion in sales.     The survey also found that nearly a quarter of these e-mail consumers, or about 11 million adult Americans, made a purchase in response to a legitimate unsolicited commercial e-mail and 72 percent said the purchases saved them money.

But the law, Controlling the Assault of Non-Solicited Pornography Act, or "CAN-SPAM," sets up a complex body of rules governing how e-mail marketers can communicate with current and prospective customers. Among other things, the law bans tactics such as false return addresses and requires clear labeling of pornographic e-mails.

The regulations are enforced by the Federal Trade Commission and states’ attorney generals. Violations require proof that sellers who hire spammers to advertise their products or services know that the third-party mailers intend to violate the law.

Here’s a rundown of other major aspects of the law and how it affects companies and individuals:

Legal spam. Businesses can send messages to customers, as long as they clearly identify themselves, provide a valid reply address and respect a consumer’s wish not to get e-mails. CAN-SPAM also prohibits hiring someone else to send e-mails or reselling an opted-out address.

Cell phones. Commercial "text messages" to cell phones are banned unless users expressly permit them.

Opt-Out. A business must allow individuals to unsubscribe from a specific e-mail list. In other words, e-mail recipients must manually opt-out of every message they receive and don't want to get in the future.

Penalties. Sending falsified e-mail headers, as well as unsolicited “sexually oriented” e-mails, could result in a prison term and heavy fines.

Registry. The FTC has authority to — but isn’t required to — set up a "do not e-mail" registry similar to the agency’s National Do Not Call list of individuals who do not want phone calls from telemarketers.

Lawsuits. Consumers aren’t allowed to sue spammers, even if they are repeatedly and maliciously harassed. This provision preempts several state laws, such as California legislation, which would have allowed consumers to sue for as much as $1 million in damages. However, the federal law does let Internet service providers sue for damages.

Labeling. Under the law, commercial e-mail must be labeled as an advertisement but e-mailers aren’t required to follow any specific labeling procedures. This provision supercedes several state laws requiring unsolicited ads to carry the note “ADV:” or "ADV: Adult Advertisement” in the subject line.

Exemptions. Political, religious and nonprofit groups are exempt from the spam law.

Critics of the new law say it may result in computer users getting even more unwanted e-mail because CAN-SPAM makes it clear that all companies can send unsolicited messages as long as they follow certain rules.

However, the key is restraint: It makes good business sense to limit bulk, unwanted e-mail ads. Consumers who aren’t bogged down with spam are more likely to respond favorably when they do get a useful message

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