Bush OKs spam bill--but critics not convinced

Backers say Can-Spam--the first federal law against digital junk mail--will serve notice to spammers. But critics say that by overriding stronger state laws, it would actually tell spammers they can spam.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
8 min read
President Bush signed the "Can-Spam" bill Tuesday, creating the first federal law regulating spam, a move backers say will be a major step in the war against e-mail solicitations for pornography, Viagra, diet pills, get-rich-quick schemes and the like.

But critics scoff that e-mail users will be unlikely to see a decline in the volume of junk in their in-boxes as a result of the Controlling the Assault of Non-Solicited Pornography and Marketing Act, which would kick in on New Year's Day.


What's new:
President Bush signs "Can-Spam," the first-ever federal antispam law. Among other things, the measure would make it possible to imprison senders of falsified e-mail headers and/or improperly labeled "sexually oriented" messages. It would also clear the way for a spam version of the National Do Not Call registry.

Bottom line:
Proponents say the law would serve notice to spammers by creating a single nationwide standard where before there was only a motley assortment of state regulations. Critics, however, say those threatened state measures are actually tougher than the proposed federal law, making the "can" in Can-Spam a grant of permission.

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Congress overwhelmingly approved the legislation earlier this month, after more than six years of unsuccessful attempts to enact a law to interrupt the flood of commercial e-mail.

With Bush's signature, a complex set of rules will take effect Jan. 1 to govern how companies may communicate with customers they already know and with people they don't. Falsified e-mail headers could be punished with prison terms, as could sending "sexually oriented" e-mail that is not properly labeled. The Federal Trade Commission receives new enforcement authority and could choose to set up a "do not e-mail" list akin to the commission's wildly popular National Do Not Call registry.

Web portal and e-mail giant Yahoo was quick to hail the bill's enactment.

"This legislation is a victory for consumers and the Internet," Yahoo said in a statement. "It provides businesses with important new legal weapons in the ongoing battle against spam. And it supplements the current technological, educational and legal tools Yahoo and others are using to fight this threat," the company said.

But the law has raised alarm among some spam fighters because it would legalize sending nonfraudulent spam and zap state laws that in some cases prohibit that practice. At least 34 states have slapped regulations on bulk e-mail, with some jurisdictions going much farther than Washington, D.C. Washington state has granted e-mail recipients the right to sue spammers, and California and Delaware have mandated an "opt-in" approach that prohibits unsolicited commercial e-mail without a prior business relationship.

Unlike the California and Delaware laws, Can-Spam sets an "opt-out" standard, and it denies individuals the right to sue spammers. California Sen. Debra Bowen, a Democrat who supported her state's legislation, said in a statement on Dec. 8 that Can-Spam "doesn't can spam, it gives it the congressional seal of approval...An advertiser's First Amendment right to free speech doesn't trump a person's basic right to be left alone. Spam isn't legitimate advertising and it's not free speech."

Bush's signature comes as the flow of solicitations from bogus confidants of deposed Nigerian dictators has reached an all-time high, bedeviling corporate America and driving individual PC users to distraction. E-mail security company MessageLabs said last week that spam increased dramatically in 2003, with a 77 percent increase over last year. In May, spam accounted for more than 50 percent of all business e-mail traffic, and it now represents about two-thirds, MessageLabs said.

Can-Spam "doesn't can spam, it gives it the congressional seal of approval...An advertiser's First Amendment right to free speech doesn't trump a person's basic right to be left alone. Spam isn't legitimate advertising and it's not free speech."
--Sen. Debra Bowen
Criticism of Can-Spam has also come from an unlikely source: the very federal and state agencies it would charge with prosecuting the most egregious spammers.

Tim Muris, the chairman of the Federal Trade Commission and a veteran of the spam wars, has been warning since the summer that Can-Spam might do more harm than good. Instead of helping, Muris said, the measure "could actually be harmful" to the FTC's ongoing efforts to sue spammers. (The FTC preferred a different bill that would have let the commission cooperate closely with governments abroad and serve U.S. Internet service providers with secret requests for subscriber information.)

In a speech in August, Muris warned that under Can-Spam, "the FTC would have to prove that the seller (who hires a spammer to advertise a product or service) knew, or consciously avoided knowing, that the third-party mailer intended to violate the law. This standard requires proof of both the seller's and spammer's level of knowledge...These requirements to prove intent pose a serious hurdle that we do not have to meet to obtain an injunction under our current jurisdiction." In a private meeting in November, according to a participant, Muris told one antispam advocacy group that even after Can-Spam is enacted, the FTC would probably continue to use pre-existing laws against spammers.

The National Association of Attorneys General, which would also be charged with enforcing Can-Spam, is more blunt. In November, the group sent a letter to Congress that warned: "The bill creates so many loopholes, exceptions, and high standards of proof, that it provides minimal consumer protections and creates too many burdens for effective enforcement...We respectfully request that you not move forward..."

In defense of Can-Spam
Can-Spam's proponents say critics are overreacting. Chris Fitzgerald, a spokesman for Sen. Ron Wyden, D-Ore., said the federal law would leave intact some state laws dealing with deception and fraud.

Spammers must pay
Laws like Can-Spam go only so
far. The one permanent solution
to the spam problem is to charge
for e-mail.

"We're going to have a difference of opinion," Fitzgerald said. "The bottom line here is the Internet doesn't recognize state borders. What you need is a single, uniform, nationwide standard that puts spammers on notice...You need a single nationwide standard to crack down on kingpin spammers that are filling up the nation's in-boxes and threatening the future of the Internet."

Other members of Congress have argued that while Can-Spam may be flawed, it is better than no federal legislation.

Rep. Ed Markey, D-Mass., said in a floor speech that Can-Spam includes regulations on wireless spam, an area that state laws have not addressed. "Imagine if you reach a point where there are 150 unwanted rings on your phone, your cell phone, this zone of privacy which we all have, as these marketers are calling you on your cell phone all day long," Markey said. "What this legislation does is it ensures that the Federal Communications Commission and the Federal Trade Commission take the actions which give protections in this new battleground."

Other portions of Can-Spam are set to do the following:

• Prohibit recipients from suing spammers, even if they are repeatedly and maliciously spammed. An unsuccessful House of Representatives bill introduced

"What you need is a single, uniform, nationwide standard...to crack down on kingpin spammers that are filling up the nation's in-boxes and threatening the future of the Internet."
--Sen. Ron Wyden,
defending CAN-SPAM
by Rep. Zoe Lofgren, D-Calif., would have given Americans this "private right of action." An equally unsuccessful Senate bill would have done the same, letting spammees sue spammers for $1,000 per unlawful spam. The Can-Spam act does not.

• Force spammers to let recipients unsubscribe from their list--but they won't have to make it easy. They won't have to offer an obvious click-to-unsubscribe link. Instead, Can-Spam will let them use any "Internet-based mechanism," prompting complaints that an unsubscribe feature could be buried in a Web site clogged with pop-ups.

• Impose no labeling requirement on e-mail unless it was sexually explicit. Currently at least 15 states require "ADV:" or a similar label on all unsolicited commercial e-mail, according to law professor David Sorkin's Spam Laws site. Because Can-Spam would zap those laws and includes no labeling requirement of its own, spammers in those states could no longer be sued if they chose not to label. (The list of states includes Arizona, California, Colorado, Illinois, Michigan, Nevada, Texas and Utah.)

• Refrain from regulating spam from political, religious or nonprofit groups. No other antispam law in the United States appears to do this either, primarily because of questions about whether levying such regulations on noncommercial speech would jibe with the First Amendment's guarantee of freedom of expression. Also, politicians sometimes engage in spam themselves and prefer to keep their options open.

Technologists' views
Technology companies are split on whether Can-Spam will prove to be a boon or a bust. Microsoft and AOL have applauded Can-Spam, as have the Direct Marketing Association and other e-mailers worried about being dragged into court on frivolous charges under California's antispam law. The state law is set to take effect on Jan. 1, 2004.

"The bill creates so many loopholes, exceptions, and high standards of proof, that it provides minimal consumer protections and creates too many burdens for effective enforcement...We respectfully request that you not move forward..."
--The National Association
of Attorneys General
in a November letter to Congress
DMA public affairs director Louis Mastria said it is "imperative that we have a national standard for e-mail marketing, because it's at the very least a national marketplace. To have anything that's less than a federal standard would be, No. 1, ineffective and, No. 2, put a (damper) on the larger marketplace."

Analysts and spam-fighting companies have warned, however, that Can-Spam could lead to even more unsolicited commercial e-mail. MessageLabs predicts that it "could increase already growing volumes of spam and adversely affect consumers and businesses." Gartner warns spam would likely worsen despite the existence of a federal law.

Ray Everett-Church, a lawyer at antispam firm ePrivacyGroup.com, says that even with the FTC and state attorneys general, there is not "enough enforcement to make spammers think twice about engaging in the practice."

Everett-Church and other spam opponents have said that because Can-Spam will legalize nonfraudulent spam, every business in the United States could send an unspecified amount of unsolicited e-mail repeatedly, until the recipient asks to be removed. The Small Business Administration says there are 22.9 million small businesses in the country, and each one would be able to take advantage of this new legal right.

It's also unclear what effect any U.S. law can have internationally, something that Congress appears to be slowly recognizing. Two U.S. senators and three U.K. members of Parliament endorsed close "cross-border" cooperation between the two countries in a joint letter on Dec. 8. The agenda of a United Nations summit that began Dec. 10 in Geneva urges governments to "take appropriate action on spam at national and international levels," and an Organization for Economic Cooperation and Development summit is scheduled for Brussels in February.

Perhaps that explains why, even before Bush signed Can-Spam into law, some U.S. politicians are already talking about what to do next. Rep. John Dingell, D-Mich., predicted in November that "it is quite possible that we will have to revisit this matter again."