FTC Issues Report to Congress

In a report to Congress required by the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”), the Federal Trade Commission says it does not recommend requiring unsolicited commercial e-mail to include a label in the subject line as a means to reduce spam.

CAN-SPAM directed the FTC to prepare “a report that sets forth a plan for requiring commercial electronic mail to be identifiable from its subject line . . . or an explanation of any concerns the Commission has that cause the Commission to recommend against the plan.” A subject line labeling requirement would compel senders of unsolicited commercial e-mail (“UCE”) to include specific characters, such as “ADV:,” in the subject lines of their messages. The idea is that subject line labeling could make it easier for Internet Service Providers (“ISPs”) to identify and screen out unwanted UCE, and for consumers to block or segregate UCE, or to tell at a glance whether individual messages that reach their in-boxes are commercial.

The report says that although subject line labeling may appear to offer a simple legislative fix for the problem of spam, the Commission doubts that it would materially help consumers or ISPs to block unwanted commercial e-mail or to segregate commercial e-mail from other e-mail messages. The Report states that subject line labeling requirements enacted by numerous states and foreign countries have not been effective to reduce spam.

According to the Report, mandatory subject line labeling would be a less precise tool for consumers to use for sorting out spam than spam filters that are widely available now at little or no cost (through ISPs or commercial companies). The Report states that these filters empower consumers to set individualized e-mail preferences to reduce unwanted UCE from both spammers and legitimate marketers more effectively than would filtering based on subject line labeling.

The Report notes that “it is extremely unlikely that outlaw spammers would comply with a requirement to label the e-mail messages they send.” By contrast, according to the Report, legitimate marketers likely would comply with a subject line labeling requirement. As a result, if
ISPs were to filter based on the subject line label – or if consumers were to set their personal e-mail programs to direct labeled e-mail messages to their junk mail folders – then labeled UCE messages sent by law-abiding senders would be filtered out. Meanwhile, unlabeled UCE messages sent by outlaw spammers would still reach consumers’ in-boxes. The Report points out that noncompliance would not carry any negative consequences for a spammer, because subject line labeling would do nothing to enhance the ability of law enforcers to track down and exact a penalty from those who do not comply.

“The Commission continues to believe that emphasis should be placed on encouraging industry to develop alternatives, such as e-mail authentication, in lieu of a requirement for subject line labeling,” the report concludes.

The Commission vote to submit the report was 4-1, with Commissioner Pamela Jones Harbour issuing a separate concurring statement and Commissioner Jon Leibowitz issuing a dissenting statement.

In his dissenting statement, Commissioner Leibowitz said, “Requiring commercial e-mail to be labeled is not a panacea but, as the CAN-SPAM Act clearly recognizes, there is no single bullet theory for solving the spam problem. An ADV labeling requirement could be a modest tool to empower consumers to filter and sort commercial e-mails – to read them later, evaluate them individually, or delete them in bulk if they choose – and for that reason I respectfully dissent from the majority and urge Congress to consider a labeling requirement.”

Commissioner Leibowitz agreed that ADV labeling would have only a minor impact on deceptive and fraudulent spam, but believed that Congress intended ADV labeling primarily as a device to help consumers deal with unsolicited commercial e-mail from legitimate marketers.

In her concurring statement, Commissioner Harbour said that she would have preferred that the Report further emphasize the importance of providing adequate tools to enable consumers to filter UCE, even from legitimate marketers. She noted, however, that “the Report does . . . set forth a number of technological options that consumers can use to sort, delete, or block UCE. . . . If consumers choose to avoid receiving UCE from legitimate marketers, it appears that existing technological solutions will allow them to do so. While ADV labeling would provide consumers with an easy way to sort UCEs from legitimate marketers who would adhere to an ADV labeling requirement, it appears that consumers already have acceptable tools available to assist them.”

Copies of the report are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.