FTC Postpones Effective Date of Can-Spam Rule Establishing Criteria for Determining Primary Purpose of E-Mail Messages

The Federal Trade Commission has postponed the effective date of rule provisions it adopted December 16, 2004, establishing criteria for determining whether the primary purpose of an e-mail message is commercial. The Commission adopted these regulations in accordance with a specific requirement of the CAN-SPAM Act.

When the FTC adopted these rule provisions, it determined that they would become effective on February 18, 2005. Recently, however, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) has determined that the provisions constitute a “major rule” under the Small Business Regulatory Enforcement Fairness Act (SBREFA), 5 U.S.C. Sec. 801-808. Under that Act, a major rule cannot take effect until at least 60 days after it is published in the Federal Register and submitted to Congress. As a result, the Commission has revised the effective date in accordance with OIRA’s determination and the requirements of SBREFA. The revised effective date will be March 28, 2005. The Commission has made no other modifications to either the text of the rule provisions themselves or the statement of basis and purpose describing and explaining the provisions, the record supporting them, and the Commission’s rationale in adopting them.

The CAN-SPAM Act, which took effect January 1, 2004, requires the Commission to issue regulations “defining the relevant criteria to facilitate the determination of the primary purpose of an electronic mail message.” The FTC published a Federal Register notice of proposed rulemaking (NPRM) on August 13, 2004, seeking public comment on its proposed primary purpose criteria. The NPRM followed an Advance Notice of Proposed Rulemaking, issued on March 11, 2004, on this and other related issues raised by the CAN-SPAM Act.

As detailed in the Federal Register notice, which soon will be available, the final Rule is substantially similar to the proposal contained in the NPRM, but adds a criterion for determining the primary purpose of an e-mail message containing only “transactional or relationship” content, among other minor changes. The CAN-SPAM Act regulates both commercial messages and transactional or relationship messages. The notice makes clear that the Commission does not intend to regulate non-commercial speech through the Rule. The notice also addresses public comments received about the constitutionality of the CAN-SPAM Act, as well as of the FTC’s “primary purpose” criteria.

The final Rule sets forth criteria for determining the primary purpose of various kinds of e-mail messages. These criteria include:

• For e-mail messages that contain only the commercial advertisement or promotion of a commercial product or service (“commercial content”), the primary purpose of the message will be deemed to be commercial;
  
  
• For e-mail messages that contain both commercial content and “transactional or relationship” content as set forth in the Act’s definition of “transactional or relationship message” and in the final Rule, the primary purpose of the message will be deemed to be commercial if either: 1) a recipient reasonably interpreting the subject line of the e-mail would likely conclude that the message contains commercial content; or 2) the e-mail’s “transactional or relationship” content does not appear in whole or substantial part at the beginning of the body of the message;
  
  
• For e-mail messages that contain both commercial content and content that is neither “commercial” nor “transactional or relationship,” the primary purpose of the message will be deemed to be commercial if either: 1) a recipient reasonably interpreting the subject line of the message would likely conclude that the message contains commercial content; or 2) a recipient reasonably interpreting the body of the message would likely conclude that the primary purpose of the message is commercial. Factors relevant to this interpretation include the placement of commercial content in whole or in substantial part at the beginning of the body of the message; the proportion of the message dedicated to commercial content; and how color, graphics, type size, and style are used to highlight commercial content; and
  
  
• For e-mail messages that contain only “transactional or relationship” content, the message will be deemed to have a “transactional or relationship” primary purpose.

Finally, the final Rule incorporates the “Sexually Explicit Labeling Rule” as promulgated in April 2004. The Commission vote approving publication of the Federal Register notice was 4-0-1, with Commissioner Jon Leibowitz not participating. To ensure there is no confusion about the effective date of the regulations, the Commission’s original December 16, 2004, press release on this issue has been removed from the FTC’s Web site.

Copies of the Federal Register notice 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, DC 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.

(FTC File No. R411008)