Think CAN-SPAM Is Just for Email?

If you ask a marketer what is governed by the CAN-SPAM Act of 2003, you are likely to get an answer that the law regulates the sending and content of bulk marketing emails. This answer is half right, but CAN-SPAM, as well as a growing body of case law, means that marketers need to take a much harder look at what is covered under this law and how their own marketing practices might be affected.

On the site for the Federal Trade Commission’s CAN-SPAM compliance guide, the reader will encounter the following statement:

Despite its name, the CAN-SPAM Act doesn’t apply just to bulk email. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites. The law makes no exception for business-to-business email. That means all email – for example, a message to former customers announcing a new product line – must comply with the law.

As the FTC points out, the Act defines commercial messages as “any electronic mail message.” While this term is commonly understood to be the same as “email,” (the FTC’s site makes the same association) recent court decisions do not apply the same limited definition.

In the most recent case of interest, Facebook sued a Canadian marketer, MaxBounty, for violating CAN-SPAM and for engaging in deceptive marketing practices. Facebook alleged that MaxBounty engineered an affiliate network that created a series of Facebook pages that offered visitors “limited time offers”. In order to take advantage of these offers, the suit alleged, Facebook users had to join the page and to invite all of their friends; once these steps were taken, users where then redirected to third-party sites that usually required the user to purchase memberships to access offers. Facebook alleged that MaxBounty received compensation from sponsors for generating traffic to these sites.

MaxBounty moved to dismiss the case and argued that its ads were not “electronic mail messages” as defined by the CAN-SPAM Act. However, the California Northern District Court rejected MaxBounty’s arguments for a strict interpretation of CAN-SPAM, noting that the law defines an “electronic mail message”as “a message that is sent to a unique electronic mail address.”

CAN-SPAM further defines such an “address” as “a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the
‘local part’) and a reference to an Internet domain (commonly referred to as the ‘domain part’), whether or not displayed, to which an electronic mail message can be sent or delivered.” The court rejected MaxBounty’s request for dismissal, reasoning that Facebook pages, user walls, Facebook mailboxes, new feeds, and other areas of the site constituted electronic mail addresses that relied on Facebook to routing for delivery. The court also cited two other cases as precedents – MySpace Inc. v. The Globe.com, Inc. and MySpace Inc. v. Wallace – in which another California court held that a broad interpretation of CAN-SPAM is in line with the legislative intent of the Act. The court’s full ruling on MaxBounty’s motion to dismiss can be viewed here.

If this broader view of what constitutes electronic mail messages and addresses is also held by other courts and if regulatory bodies, such as the FTC, also weigh in on this side, then this interpretation is bound to affect most social channels. If our online identities are defined as addresses, then it would seem clear that CAN-SPAM readily can be applied to commercial messages sent to those identities.

Thus far the complaints have been brought by social sites themselves and the targets have been companies that appeared to circumvent the terms and conditions set by those sites, so marketers that operate within the rules should be safe. However, if this interpretation becomes more prevalent, then we can expect to see more actions from end consumers and from regulators.

As yet, there is no need to panic, but I recommend that any company conducting marketing through social media review its tactics in light of these rulings. Naturally, marketers will want to seek competent legal advisors that can make recommendations based on federal and state regulations and current case law. If nothing else, such a review can be used to plan for the future, to inform marketing best practices within an organization, and to work with social media properties.