When spam is mentioned, most business owners immediately get a bad taste in their mouths. Spam costs companies time and money, from employees sifting legitimate e-mail from junk, to the technical and legal procedures used to fight spammers.
But to date, the U.S. Federal Trade Commission (FTC) has only gone after spam in cases in which deceptive advertising was being prosecuted. Unsolicited commercial e-mail (UCE) itself, regardless of its contents, has not been a target.
Some experts think that should change.
“The issue is crystal clear,” attorney David Kramer, of the law firm Wilson Sonsini Goodrich & Rosati, told the E-Commerce Times. “Spam is theft. It is a shifting of the costs from the advertiser to the advertising recipient and the parties transmitting the message.”
“There is no precedent for such cost-shifting in the fields of telemarketing or fax marketing,” Kramer added. “Spam is not free. The costs are staggering and are borne by ISPs (Internet service providers) and businesses in real money.”
Kramer, who represented CompuServe in the seminal anti-spam case of CompuServe v. Cyberpromotions, won with the argument that the spammers’ use of CompuServe’s network was a trespass on its networking equipment.
The precedent has been used in numerous cases by America Online (NYSE: AOL), CompuServe’s successor, in its ongoing battle to keep spam from burdening its network.
The Direct Marketing Association, however, takes the position that industry, not government, is in a better position to deal with unsolicited e-mail that is not in itself deceptive, according to DMA director of public and international affairs Louis Mastria.
“As an industry, you want to target people who want to receive the mail, and do not want to target people who do not want to receive it, because you don’t get a return on your investment,” Mastria told the E-Commerce Times. “The DMA takes the position that industry is doing a better job.”
Spam a la Carte
The FTC maintains a database cataloging the millions of unsolicited e-mails forwarded by U.S. citizens and companies. FTC staff attorney Jennifer Mandigo told the E-Commerce Times that the FTC is working to analyze what it has been sent.
The FTC “uses the database to start new cases and find evidence,” she said.
Mandigo said that out of 196 recent cases being handled by the FTC, 30 “have a spam component.” However, the commission has yet to take action against companies or people who send the millions of unsolicited e-mails flooding privately owned computer networks.
“We have not yet gone after a target just for spam,” Mandigo said.
Action and the Act
In a June 1998 presentation made on behalf of the FTC before a U.S. subcommittee, FTC commissioner Sheila Foster Anthony made it clear that the agency was only going to fight what it considered to be fraudulent spam.
“The Commission’s focus has been on deceptive UCE,” Anthony said. “To the extent that UCE is not deceptive, the Commission’s ability to challenge it may be circumscribed.”
According to the FTC, those unsolicited e-mails are in themselves not violations of the FTC Act (the federal law that broadly defines the power of the agency to regulate U.S. commerce).
At the same time, however, under the primary section of the Act, the FTC is empowered to regulate “unfair methods of competition in or affecting commerce” as well as “unfair or deceptive acts or practices in or affecting commerce.”
So while the agency may argue that it only has the power to go after deceptive e-mails, the very law that gives the agency its power includes unfair practices as well.
True or False
If there is a path to a future wave of anti-spam pursuit, it could involve the tactics spammers use to distribute the e-mails.
Many companies that send spam, even if the content itself is not deceptive, use “false routing” devices like fake headers and source indicators, which hide the origin of their messages.
When asked if false routing of millions of spam marketing messages would be considered sufficiently unfair or deceptive for the FTC to pursue a case, Mandigo said that she “would not confirm or deny whether the agency is going to take on false routing.”
If nothing else, the FTC is seemingly leaving open the ability to pursue a broader range of spam in the future.