Seeing SPAM from 2 Directions

Over the past year, we have seen numerous initiatives restricting “unsolicited commercial communications” both in the US and abroad. While most members of the converting industry have no doubt read about the legislative flurry and ongoing litigation surrounding the national “Do Not Call” list, actions related to faxing and spam, as well as the entry into force of a new EU Directive on electronic communications, could have a significant impact on business operations.

Most converters, their suppliers, and their customers are a far cry from those annoying telemarketers that call during dinner. But the explosive growth in unsolicited communications prompted not only adoption of the national Do Not Call list but also new and more onerous restrictions on unsolicited faxes.

In a rule issued last summer, the Federal Communications Commission (FCC) prohibited any person or entity from sending “unsolicited advertisements” via fax to business customers or consumers absent a signed, written consent from the recipient. In so doing, it eliminated a longstanding exemption for communications to those with whom the sender had an “established business relationship” (EBR). The result is the new requirement of obtaining written consents will apply to most routine business fax communications.

In the wake of significant controversy over this change, the FCC decided it would allow companies to continue to rely on the EBR exemption until Jan. 1, 2005. Petitions for reconsideration and legal challenges are pending.

With at least 35 states having adopted spam laws, including a tough new law in California that authorizes private suits against e-mailers and requires direct consent from each advertiser, efforts to pass preemptive federal spam legislation have accelerated. Absent preemptive federal legislation, however, the California law will take effect Jan. 1, 2004. While many businesses are frustrated with the increasing amount of resources it takes to filter and manage spam, many businesses do market products and services via e-mail, sometimes using lists derived from directories, conference attendee lists, and the like. The California law thus potentially poses significant problems for converting industry members that are unprepared to adhere to its strictures.

On October 22 the Senate passed overwhelmingly a federal spam bill. The “Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003” — known as “CAN-SPAM” — has gained momentum on Capitol Hill recently as the implementation date for the California law approaches.

CAN-SPAM requires e-mailers to obtain affirmative consent, defined as express consent, either in response to a clear and conspicuous request or at the recipient's own initiative (which can accommodate both opt-in and opt-out regimes). E-mail to prior or existing customers is permitted with an opt-out.

CAN-SPAM would preempt all existing state spam laws. Only ISPs are authorized to enforce; there is no private right of action. The bill requires the Federal Trade Commission (FTC) to develop a feasibility study for a do-not-spam list within six months (the FTC has said a “do-not-spam” list would be unworkable and potentially dangerous) and to develop labels (like “ADV” and “ADV-ADLT”). Repeat spamming and false headers are felonies. Importantly, CAN-SPAM would preempt all existing state spam laws.

In the EU, Directive No. 2002/58/EC on Privacy and Electronic Communications went into effect at the end of October. The Directive covers all electronic communications, which are permitted only with prior consent. The European Commission views this as requiring opt-in consent — not necessarily written — and does allow communications with customers, with some limits. The Directive also imposes other restrictions, such as disclosure of the use of cookies and other tracking devices, on company Web sites.

Suffice it to say converters, their customers, and their suppliers will need to implement procedures to make sure electronic communications to business customers and consumers alike comport with applicable laws.


Sheila A. Millar, a partner with Keller and Heckman LLP, counsels both corporate and association clients. Contact her at 202/434-4143; This email address is being protected from spambots. You need JavaScript enabled to view it.; PackagingLaw.com.


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