FTC Rejects Pleas for Exemptions From Spam Law

by Wendy Davis, Dec 22, 2004, 12:00 AM

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In the one year that Can-Spam's been the law of the land, most e-mail marketers have learned to live with its requirements -- such as providing valid opt-out links in commercial e-mails.

But the relatively simple requirements haven't stopped many from complaining that the law shouldn't apply to their organizations.

Nonprofits, for instance, asked for an exemption from the rules regulating commercial e-mail. And newsletter distributors maintain that the law violates their First Amendment rights.

Last week, the Federal Trade Commission (FTC) published final regulations that largely made short work of such arguments. While the commission made clear that Can-Spam applies only to commercial e-mails, not so-called transactional ones, it left the definition of commercial broader than nonprofits and newsletter publishers had hoped for.

As to nonprofits, the FTC rejected a blanket exception, stating instead that there is not an "adequate basis or need to create an across-the-board exemption for e-mail messages initiated by nonprofit entities."

What sort of nonprofit e-mail is also commercial? An example given by the FTC is of a nonprofit hospital that offers medical screenings for a fee. "There is no reason that recipients of such an e-mail message should forfeit the protections afforded by Can-Spam," wrote the commission.

Newsletter publishers also pushed an argument that the law would violate the First Amendment if applied to them.

The FTC's answer was a qualified no. The agency came up with a starting point of whether the recipient had subscribed to the newsletter -- in which case the e-mail would be considered transactional and not subject to Can-Spam. But if the newsletter is unsolicited, it will be considered commercial if a recipient would reasonably conclude it was meant to be commercial.

The FTC posed the following scenario -- dubbed the "Shakespearean sonnet spam": Someone sends an unsolicited message beginning with a Shakespearean sonnet and ending with a one-line link to a commercial Web site. Because the person receiving such an e-mail could reasonably think it was meant as an ad, it likely is commercial.

Of course, the new FTC regulations don't end the matter. The rules leave enough room for argument that they practically cry out for litigation, which means that e-mail marketers who try to push the envelope will have to live with some uncertainty until the courts have spoken.

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