Spam Bill Passes The Senate

By Ronald Plesser, James Halpert and Stuart Ingis

In this article:

• S. 877 Overview
• Senator Schumer's Do-Not-E-Mail Registry Amendment
• Hatch-Leahy Criminal Amendment
• Enzi-Santorum Amendment
• Senator Corzine's Amendment

S. 877, the "CAN-SPAM" Act passed the Senate on October 22, 2003, by a vote of 97-0. This article describes the bill as passed and the relevant amendments that were considered and approved on the Senate floor. The major new provisions include substitution of the criminal provisions contained in the Hatch-Leahy spam bill (S. 1293). In addition, the bill, which is sponsored by Senators Burns and Wyden, requires the Federal Trade Commission to evaluate and develop a do-not-e-mail registry proposal, with authority to create the registry if the FTC determines it will help combat spam. It also contains a "bounty" amendment by Senator Corzine that authorizes the FTC, if it determines that it is appropriate, to provide rewards to individuals who supply information about violations of the Act.

This bill is an "opt-out" bill and requires that senders of commercial e- mail include a functioning return address or comparable mechanism in the e-mail that will allow recipients to request not to receive further communications. The bill requires that companies comply with opt-out requests within 10 days of receipt. The FTC is permitted to change this time frame.

The bill would prohibit initiating e-mail with false or misleading transmission information. It also would prohibit "harvesting" and "dictionary attacks" if the e-mail messages sent do not comply with the opt-out provisions and the prohibitions on fraud. Harvesting is the practice of obtaining e-mail addresses through an automated means in violation of a notice that a company will not give, sell, or otherwise transfer addresses maintained on that site. Dictionary attacks occur when the e-mail address of the recipient is obtained using an automated means that generates possible e-mail addresses by combining names, letters, or numbers into numerous permutations.

The bill would be enforced by the FTC, state attorneys general, and ISPs. The criminal provisions would be enforced by the Department of Justice. There is no consumer private cause of action.

The bill would preempt state laws regulating spam except to the extent that such laws prohibit falsity or deception in e-mail messages.

The following amendments were added to the bill yesterday on the Senate floor.

Senator Schumer's amendment authorizes the FTC to create a do-not-e-mail registry. This amendment directs the FTC to develop a proposal to create a registry and submit it to Congress six months after enactment. Three months after submission, the FTC is authorized, if Congress does not act, to implement such a list. The FTC is not, however, required to do so.

The FTC has repeatedly voiced opposition to the concept of a do-not-e-mail registry. FTC Chairman Muris has indicated that he believes that such a registry will not eliminate spam, because a great deal of spam already is illegal and only the good actors will comply. This provision is of great concern to most in the Internet marketing world.

Senators Hatch and Leahy's criminal amendment was accepted, replacing the Burns-Wyden criminal provisions with those of the Judiciary Committee. Included in these provisions are criminal penalties for: accessing a computer without authorization to send multiple commercial e-mail messages; sending multiple e-mail messages with the intent to deceive recipients of the origin of the message; falsifying header information; and falsifying the identity of the sender or the right to use five or more IP addresses.

The Santorum amendment requires that warning labels be placed on e-mail containing sexually oriented material. The FTC, in consultation with the Attorney General, is required to prescribe the marks to be used within 120 days of enactment.

Senator Corzine, late in the debate, came to the floor with an amendment with two different concepts.

One provision, as passed, requires the FTC to complete a report within 18 months of enactment that evaluates including an "ADV" label for unsolicited commercial electronic mail. The FTC has voiced opposition to "ADV" labeling. An FTC study indicated that only 2% of all spam included an "ADV" label.

Second, Senator Corzine's amendment creates a "bounty" system whereby the FTC would provide rewards to individuals who supply information about violations of the Act. This proposal is taken from Stanford law professor Larry Lessig, who has stated that he believes it will solve the spam problem. The FTC is required to submit a report to the Senate describing how such a system would work within nine months of enactment. Similar to the registry provision, the FTC has authority, without further congressional action, to create such a system if it deems it appropriate.

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