[Congressional Record Volume 150, Number 7 (Wednesday, January 28, 2004)]
[Extensions of Remarks]
[Pages E72-E73]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   S. 877--CONTROLLING THE ASSAULT OF NON-SOLICITED PORNOGRAPHY AND 
        MARKETING ACT OF 2003--CAN-SPAM ACT OF 2003 (PL 108-187)

                                 ______
                                 

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                      Wednesday, January 28, 2004

  Mr. DINGELL. Mr. Speaker, this statement represents my views as well 
as the views of W.J. ``Billy'' Tauzin, Chairman of the Committee on 
Energy and Commerce, on S. 877 the Can-Spam Act of 2003 (``the Act''). 
Our views on Sections one through five of the Act are contained in a 
separate statement submitted today by Chairman Tauzin.
  Section 6 of the legislation prohibits a person from allowing 
commercial e-mail messages in violation of section (5)(a)(1) to be sent 
by a third party if that person had knowledge of such promotion, 
expected to receive economic benefit from such promotion, and took no 
action to prevent the transmission of the e-mail messages or report 
such messages to the Federal Trade Commission. This section should not 
be interpreted to preclude any action brought under section 5 arising 
out of the same conduct.
  Section 7 of the legislation sets forth enforcement provisions for 
the Act.
  Subsection (a) provides for enforcement of the Act by the Federal 
Trade Commission (FTC) under section 18(a)(1)(B) of the Federal Trade 
Commission Act.
  Subsection (b) provides for enforcement of the Act by certain other 
Federal functional regulators.
  Subsection (e) provides the FTC and the Federal Communications 
Commission (FCC) may seek injunctive relief or cease and desist orders 
without the showing of knowledge otherwise required under this Act.
  Subsection (f) sets forth enforcement of the legislation by the 
States.
  Paragraph (1) provides that the attorney general, or other official 
or agency of the State, may bring civil actions exclusively in Federal 
district court to enjoin violations of section 5 of the Act or obtain 
damages on behalf or residents of the State, equal to the greater of 
actual damages or statutory damages as determined under paragraph (3).
  Paragraph (2) provides that State attorneys general may seek 
injunctive relief without the showing of knowledge otherwise required 
under the Act.
  Paragraph (3) sets forth statutory damages.
  Subparagraph (A) provides that for purposes of paragraph (1)(B)(ii) 
damages are determined by multiplying the number of violations, with 
discrete separately addressed unlawful messages each counting as a 
separate violation, by up to $250.
  Subparagraph (B) limits the damages a state attorney general may 
recover for violations of section 5, other than section 5(a)(1) to no 
greater than $2,000,000.
  Subparagraph (C) allows the court, in its discretion, to increase the 
amount of damages awarded under subparagraph (b) to three times the 
amount set therein if the court finds that the defendant's conduct was 
willful and knowing or the defendant's unlawful activity includes one 
or more of the aggravating violations set forth in section 5(b).
  Subparagraph (D) provides for a reduction of damages. In assessing 
damages under subparagraph (A), the court may consider factors 
including whether the defendant has established and implemented, with 
due care, commercially reasonable practices and procedures designed to 
prevent violations of section 5. The court may consider whether the 
violation occurred despite commercially reasonable efforts to maintain 
compliance with the practices and procedures designed to prevent such 
violations.
  Subsection (f) also provides that in the case of a successful action 
under paragraph (1), the court, in its discretion, may award costs of 
the action and reasonable attorney's fees to the State.
  Subsection (g) provides for a limited right of action by bona fide 
Internet service providers. Paragraph (1) grants to Internet service 
providers adversely affected by a violation of section 5(a)(1), 5(b), 
or 5(d) or a pattern or practice that violates paragraph (2), (3), (4), 
or (5) of section 5(a) the right to bring civil action in Federal 
district court. The term ``Internet access service'' is defined to have 
the same meaning given that term in section 231(e)(4) of the 
Communications Act of 1934.
  Subsection (g)(2) contains a special definition of ``procure'' for 
purposes of ISP enforcement actions that includes a scienter 
requirement with regard to whether a person who initiates commercial 
email on their behalf is engaging or will engage in a pattern or 
practice that violates this Act. It is the intent, with regard to the 
falsification violations of Section 5(a)(1), that ``conscious avoidance 
of actual knowledge'' be construed broadly in a manner consistent with 
a fundamental purpose of this Act to prohibit and deter falsification 
techniques in commercial e-mail. Therefore if the procurer has an 
indication that the initiator is

[[Page E73]]

or has engaged in any falsified spamming technique prohibited by 
Section 5(a)(1) or 18 U.S.C. 1037, the Act is intended to be read so 
that such a procurer meets the standard of ``conscious avoidance of 
actual knowledge'' of violations of the Act by an initiator unless the 
procurer and takes reasonable steps to prevent such violations by the 
initiator.
  Actual knowledge or conscious avoidance of actual knowledge could be 
evidenced, for example, by information obtained by the procurer 
directly from an initiator, or via a complaint, warning or cease and 
desist communication received from a recipient, Internet access 
service, or law enforcement alerting the procurer that an initiator to 
whom the procurer is providing consideration is violating the law. 
Conscious avoidance of actual knowledge could also be evidenced, for 
example, by: (1) Doing little or nothing to determine whether suspect 
initiators who are marketing partners, resellers, affiliates, agents or 
contractors of the procurer are violating or have violated Federal or 
State law; (2) failing to follow the procurer's stated policies or 
procedures prohibiting illegal e-mail advertising methods by initiators 
who are marketing partners, resellers, affiliates, agents or 
contractors; (3) repeatedly allowing initiators who are engaged in 
illegal e-mail advertising methods to provide false information or to 
fail to identify themselves when they sign up to conduct e-mail 
advertising for the procurer's products or services; (4) repeatedly 
paying initiators whom the procurer has terminated for violating the 
procurer's e-mail policies prohibiting illegal spamming methods; or (5) 
allowing initiators who have been terminated for violating the 
procurer's policies prohibiting illegal e-mail activities repeatedly to 
sign up for new accounts. The above is not an exhaustive list of ways 
in which the requisite state of mind can be evidenced.

  Subparagraphs (f) and (g) allow enforcement actions for violations of 
certain parts of Section 5 to be brought by States and ISPs only for a 
``pattern or practice'' of violations. The Act regulates a wide variety 
of commercial e-mail practices, some of which are deemed more 
deplorable than others and subject to higher penalties.
  Such action may seek to enjoin further violations by defendants, or 
collect certain limited monetary damages. It is our intention that 
these cases be based on bona fide violations and not used as tools for 
anti-competitive behavior among competitors. Additionally, we intend 
that Internet access service providers provide actual Internet access 
service to customers.
  Statutory damages for Internet service providers are at a lower level 
than those provided to federal and state regulators.
  Section 8 provides for the effect of the legislation on other law.
  Section (b) provides for preemption of state laws that expressly 
regulate the use of e-mail to send commercial messages, including laws 
that regulate the form or manner of sending commercial e-mail (e.g. 
labeling requirements). It does not preempt statutes dealing with 
fraud, falsity, or deception in any portion of a commercial e-mail 
message or attachment thereto. Thus, State opt-in spam laws, such 
California S.B. 186 enacted in the fall of 2003, state opt-out spam 
laws, and state ADV labeling requirements for commercial e-mail would 
be entirely preempted, except to the limited extent that those laws 
also prohibited use of falsification techniques or deception such as 
those prohibited in 18 U.S.C.1037, Section 5(a)(1) and Section 5(a)(2) 
of this Act. Similarly, State anti-spam laws, such as Virginia's, that 
expressly regulate or criminalize e-mail falsification techniques would 
not be preempted. In addition, Section 8(b) is not intended to preempt 
general purpose State deceptive trade practice laws, or State common 
law rules, such as State trespass to chattels theories, that have been 
used in anti-spam litigation. Nor does Section 8(b) preempt State laws 
relating to acts of fraud or computer crime. However, to the extent any 
State or local law regulates the manner of sending commercial e-mail, 
the mere titling of the law as an ``anti-fraud statute'' or the 
combination of commercial e-mail regulation provisions with actual 
falsification or computer crime provisions in the same statute is not 
sufficient to avoid preemption of those regulatory provisions by this 
Act.
  Section 9 provides the FTC with authority to establish a do not e-
mail registry.
  The provision requires the FTC to set forth a plan and timetable for 
establishing a national do not e-mail registry. The FTC is required to 
report to the Congress on any practical, technical, security, privacy, 
enforceability or other concerns the FTC may have with such a registry.
  We expect that the FTC will proceed with due care in this important 
inquiry. In particular, the FTC should take care not to inadvertently 
adopt a do not e-mail registry that would facilitate the availability 
of working e-mail addresses to persons who might use them in violation 
of this Act.
  Section 14 requires the FCC to promulgate rules to prevent the 
sending of unsolicited e-mail messages to wireless customers, without 
the express consent of such customers.

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