[Federal Register Volume 69, Number 48 (Thursday, March 11, 2004)]
[Proposed Rules]
[Pages 11776-11782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5500]



[[Page 11775]]

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Part V





Federal Trade Commission





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16 CFR Part 316



Definitions, Implementation, and Reporting Requirements Under the CAN-
SPAM Act; Proposed Rule

  Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / 
Proposed Rule  

[[Page 11776]]


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FEDERAL TRADE COMMISSION

16 CFR Part 316

[Project No. R411008]
RIN 3084-AA96


Definitions, Implementation, and Reporting Requirements Under the 
CAN-SPAM Act

AGENCY: Federal Trade Commission (FTC).

ACTION: Advance notice of proposed rulemaking; request for public 
comment.

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SUMMARY: The FTC is requesting comment on various topics related to 
Sec. Sec.  3(2)(c), 3(17)(B), 5(c)(1), 5(c)(2), and 13 of the 
Controlling the Assault of Non-Solicited Pornography and Marketing Act 
of 2003 (``CAN-SPAM Act'' or ``the Act''). In addition, the FTC is 
requesting comment on topics relevant to certain reports to Congress 
required by additional provisions of the CAN-SPAM Act.

DATES: Comments addressing the ``National Do Not E-mail'' Registry must 
be submitted on or before March 31, 2004. Comments addressing any other 
aspect of the CAN-SPAM Act must be submitted on or before April 12, 
2004.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``CAN-SPAM Act Rulemaking, Project No. 
R411008'' to facilitate the organization of comments. A comment filed 
in paper form should include this reference both in the text and on the 
envelope, and should be mailed to the following address: Federal Trade 
Commission, CAN-sySPAM Act, Post Office Box 1030, Merrifield, VA 22116-
1030. Please note that courier and overnight deliveries cannot be 
accepted at this address. Courier and overnight deliveries should be 
delivered to the following address: Federal Trade Commission/Office of 
the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Comments containing confidential material must be filed in paper 
form.
    An electronic comment can be filed by (1) clicking on http://www.regulations.gov; (2) selecting ``Federal Trade Commission'' at 
``Search for Open Regulations;'' (3) locating the summary of this 
Notice; (4) clicking on ``Submit a Comment on this Regulation;'' and 
(5) completing the form. For a given electronic comment, any 
information placed in the following fields--``Title,'' ``First Name,'' 
``Last Name,'' ``Organization Name,'' ``State,'' ``Comment,'' and 
``Attachment''--will be publicly available on the FTC Web site. The 
fields marked with an asterisk on the form are required in order for 
the FTC to fully consider a particular comment. Commenters may choose 
not to fill in one or more of those fields, but if they do so, their 
comments may not be considered.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments with all 
required fields completed, whether filed in paper or electronic form, 
will be considered by the Commission, and will be available to the 
public on the FTC Web site, to the extent practicable, at http://www.ftc.gov. As a matter of discretion, the FTC makes every effort to 
remove home contact information for individuals from the public 
comments it receives before placing those comments on the FTC Web site. 
More information, including routine uses permitted by the Privacy Act, 
may be found in the FTC's privacy policy, at http://www.ftc.gov/ ftc/
privacy.htm.

FOR FURTHER INFORMATION CONTACT: Michael Goodman, Staff Attorney, (202) 
326-3071; or Catherine Harrington-McBride, Staff Attorney, (202) 326-
2452; Division of Marketing Practices, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION:

I. Background

    The CAN-SPAM Act, which took effect on January 1, 2004, imposes a 
series of new requirements on the use of commercial electronic mail 
messages (``email''). In addition, the Act gives federal civil and 
criminal enforcement authorities new tools to combat unsolicited 
commercial email (``UCE'' or ``spam''). The Act also allows state 
attorneys general to enforce its civil provisions, and creates a 
private right of action for providers of Internet access services.
    The CAN-SPAM Act directs the Commission to issue regulations, not 
later than 12 months following the enactment of the Act, ``defining the 
relevant criteria to facilitate the determination of the primary 
purpose of an electronic mail message.''\1\ The term ``the primary 
purpose'' is incorporated in the Act's definition of the key term 
``commercial electronic mail message.'' Specifically, ``commercial 
electronic mail message'' encompasses ``any electronic mail message the 
primary purpose of which is the commercial advertisement or promotion 
of a commercial product or service (including content on an Internet 
website operated for a commercial purpose.)'' \2\
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    \1\ CAN-SPAM Act, Sec.  3(2)(C).
    \2\ CAN-SPAM Act, Sec.  3(2)(A) (emphasis supplied).
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    The CAN-SPAM Act also provides discretionary authority for the 
Commission to issue regulations concerning certain of the Act's other 
definitions and provisions.\3\ Specifically, the Commission is 
authorized to:
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    \3\ The Act authorizes the Commission to use notice and comment 
rulemaking pursuant to the Administrative Procedures Act, 5 U.S.C. 
553. CAN-SPAM Act, Sec.  13.
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     Modify the definition of the term 
``transactional or relationship message'' under the Act ``to the extent 
that such modification is necessary to accommodate changes in 
electronic mail technology or practices and accomplish the purposes of 
[the] Act;'' \4\
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    \4\ CAN-SPAM Act, Sec.  3(17)(B).
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     Modify the 10-business-day period prescribed in 
the Act for honoring a recipient's opt-out request;\5\
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    \5\ CAN-SPAM Act, Sec.  5(c)(1)(A)-(C).
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     Specify activities or practices as aggravated 
violations (in addition to those set forth as such in Sec.  5(b) of the 
CAN-SPAM Act) ``if the Commission determines that those activities or 
practices are contributing substantially to the proliferation of 
commercial electronic mail messages that are unlawful under subsection 
[5(a) of the Act];'' \6\ and
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    \6\ CAN-SPAM Act, Sec.  5(c)(2).
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     Issue regulations to implement the provisions of 
this Act.'' \7\
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    \7\ CAN-SPAM Act, Sec.  13(a). This provision excludes from the 
scope of its general grant of rulemaking authority Sec.  4 of the 
Act (relating to criminal offenses) and Sec.  12 of the Act 
(expanding the scope of the Communications Act of 1934). In 
addition, Sec.  13(b) limits the general grant of rulemaking 
authority in Sec.  13(a) by specifying that the Commission may not 
use that authority to establish ``a requirement pursuant to Sec.  
5(a)(5)(A) to include any specific words, characters, marks, or 
labels in a commercial electronic mail message, or to include the 
identification required by Sec.  5(a)(5)(A) in any particular part 
of such a mail message (such as the subject line or body).'' Section 
5(a)(5)(A) provides that ``it is unlawful for any person to initiate 
the transmission of any commercial electronic mail message to a 
protected computer unless the message provides clear and conspicuous 
identification that the message is an advertisement or solicitation 
* * * ''
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    In issuing this Advance Notice of Proposed Rulemaking (``ANPR''), 
the Commission initiates the mandatory ``primary purpose'' rulemaking 
proceeding by soliciting comment on issues relating to that term and 
its use in the Act. In addition, this notice solicits comments on the 
several areas of discretionary regulation listed above. Finally, the 
Commission also seeks

[[Page 11777]]

comment in this ANPR on a variety of topics relevant to certain reports 
that, pursuant to the mandate of the CAN-SPAM Act, the Commission must 
issue within the coming two years.

II. Mandatory ``Primary Purpose'' Rulemaking

    The CAN-SPAM Act mandates that the FTC issue regulations ``defining 
the relevant criteria to facilitate the determination of the primary 
purpose of an electronic mail message.'' This mandate is integral to 
the Act's definition of ``commercial electronic mail message.'' \8\ 
Generally, the Act applies only to messages that fall within this 
definition.\9\ Thus, the ``primary purpose'' regulation will elucidate 
how to determine whether a particular message constitutes a 
``commercial electronic mail message,'' and is therefore subject to the 
CAN-SPAM Act's requirements and prohibitions. Accordingly, the FTC 
seeks comment on how to determine an electronic mail message's primary 
purpose, including comment on criteria that would facilitate this 
determination.
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    \8\ CAN-SPAM, Sec.  3(2)(C).
    \9\ One provision, Sec.  5(a)(1), which prohibits false or 
misleading transmission information, applies equally to ``commercial 
electronic mail messages'' and ``transactional or relationship 
messages'; otherwise, CAN-SPAM's prohibitions and requirements cover 
only ``commercial electronic mail messages.''
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III. Subjects for Discretionary Rulemaking Under the CAN-SPAM Act

    In addition to seeking comment on the mandatory ``primary purpose'' 
rulemaking, the Commission also seeks comment on the four areas of 
discretionary rulemaking that were established in the Act. These four 
areas, described in detail below, are: (1) The Act's definition of 
``transactional or relationship messages;'' (2) the 10-business-day 
period for processing opt-out requests; (3) the Act's enumeration of 
``aggravated violations;'' and (4) the implementation of the provisions 
of the CAN-SPAM Act generally.

A. Transactional or Relationship Messages

    The CAN-SPAM Act designates five broad categories of messages as 
``transactional or relationship messages.''\10\ The Act excludes these 
messages from its definition of ``commercial electronic mail message,'' 
\11\ and thus excludes them from most of the Act's substantive 
requirements and prohibitions.\12\ ``Transactional or relationship 
messages'' are those, the primary purpose of which is either:
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    \10\ CAN-SPAM Act, Sec.  3(17).
    \11\ CAN-SPAM Act, Sec.  3(2)(B).
    \12\ See note 9 above.
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     To facilitate, complete, or confirm a commercial 
transaction that the recipient has previously agreed to enter into with 
the sender;
     To provide warranty information, product recall 
information, or safety or security information with respect to a 
commercial product or service used or purchased by the recipient;
     To provide specified types of information with 
respect to a subscription, membership, account, loan, or comparable 
ongoing commercial relationship involving the ongoing purchase or use 
by the recipient of products or services offered by the sender; \13\
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    \13\ The specified types of information are: notification 
concerning a change in the terms or features; notification of a 
change in the recipient's standing or status; or regular periodic 
account statement or balance information. CAN-SPAM Act, Sec.  
3(17)(A)(iii).
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     To provide information directly related to an 
employment relationship or related benefit plan in which the recipient 
is currently involved, participating, or enrolled; or
     To deliver goods or services, including product 
updates or upgrades, that the recipient is entitled to receive under 
the terms of a transaction that the recipient has previously agreed to 
enter into with the sender.
    Section 3(17)(B) gives the Commission the authority to modify the 
definition in Sec.  3(17)(A) to ``expand or contract the categories of 
messages that are treated as ``transactional or relationship messages'' 
for the purposes of this Act to the extent that such modification is 
necessary to accommodate changes in electronic mail technology or 
practices and accomplish the purposes of the Act.'' \14\ Accordingly, 
the FTC seeks comment on the categories of ``transactional or 
relationship messages'' identified in the Act, and on how changes in 
technology or practices might warrant modifications with respect to 
these categories to accomplish the purposes of the Act. The Commission 
seeks comment on additional categories of messages that changes in 
technology or practices might warrant excluding from the definition of 
``commercial electronic messages'' by designating them as 
``transactional or relationship messages.'' The Commission also seeks 
comment on additional categories of messages that might warrant 
designation as ``transactional or relationship messages'' to accomplish 
the purposes of the Act. The Commission also seeks comment on 
categories listed in Sec.  3(17) that, due to changing technology or 
practices, might become inappropriate to exclude from coverage of CAN-
SPAM's provisions as ``transactional or relationship messages.''
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    \14\ CAN-SPAM Act, Sec.  3(17)(B).
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B. 10-Business-Day Period for Processing Opt-Out Requests

    Section 5(a)(4) of the CAN-SPAM Act addresses the time within which 
a request to ``opt-out'' of receiving additional electronic mail 
messages must be honored. Section 5(a)(4)(A) prohibits senders and 
persons acting on their behalf from initiating the transmission of a 
commercial email message to any recipient who has opted out of 
receiving their commercial email messages. This section also provides 
that senders have ten (10) business days after receiving a recipient's 
opt-out request to process it and put it into effect.
    Section 5(c)(1) gives the Commission the authority to issue 
regulations modifying the 10-business-day period for processing 
recipients' opt-out requests if the Commission determines that a 
different time period would be more reasonable ``after taking into 
account (A) the purposes of [subsection 5(a)]; (B) the interests of 
recipients of commercial electronic mail; and (C) the burdens imposed 
on senders of lawful commercial electronic mail.'' \15\ Accordingly, 
the FTC seeks comment on the reasonableness of the 10-business-day time 
period for processing opt-out requests, and on whether a different time 
period would be more reasonable, in view of the three considerations 
enumerated in the statute and the relative costs and benefits.
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    \15\ CAN-SPAM Act, Sec.  5(c)(1).
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C. Additional Aggravated Violations

    Section 5(c)(2) of the Act grants the Commission rulemaking 
authority with respect to the list of ``aggravated violations'' set 
forth in Sec.  5(b) of the Act. The practices listed in Sec.  5(b) 
include email address harvesting and dictionary attacks. The Act's 
provisions relating to enforcement by the States and by providers of 
Internet access service create the possibility of increased statutory 
damages if the court finds a defendant has engaged in one of the 
practices specified in Sec.  5(b) while also violating Sec.  5(a). 
Specifically, Sec. Sec.  7(f)(3)(C) and (g)(3)(C) permit the court to 
increase a statutory damages award up to three times the amount that 
would have been granted without the commission of an aggravated

[[Page 11778]]

violation.\16\ The Commission seeks comment on what activities and 
practices, if any, should be added to the list of aggravated violations 
under Sec.  5(b) of the Act.
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    \16\ This heightened statutory damages calculation also applies 
when a court finds that the defendant's violations of Sec.  5(a) 
were committed ``willfully and knowingly.'' CAN-SPAM Act, Sec. Sec.  
7(f)(3)(C) and (g)(3)(C).
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D. Implementation of Provisions of the CAN-SPAM Act Generally

    Section 13 of the Act details the fourth and final area of 
discretionary rulemaking by the Commission under the CAN-SPAM Act. 
Specifically, Sec.  13(a) provides that the Commission may issue 
regulations to implement the provisions of the Act.\17\ Accordingly, 
the Commission seeks comment on any additional regulations that may 
help implement the provisions of the Act.
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    \17\ As noted above, the Act expressly excludes from this grant 
of rulemaking authority the criminal provisions in Sec.  4 and its 
amendment of the Communications Act of 1934 in Sec.  12. Section 
13(b) further limits the scope of this rulemaking authority by 
prohibiting the Commission from requiring any specific words, 
characters, marks, or labels in a commercial email pursuant to Sec.  
5(a)(5)(A), or from requiring the identification required by Sec.  
5(a)(5)(A) in any particular part of a commercial email, such as the 
subject line or body. See note 7, above.
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    Since the effective date of CAN-SPAM, several issues have 
repeatedly arisen that potentially may warrant rulemaking under Sec.  
13. The first of these involves a scenario where a sender of a 
commercial email message seeks to induce recipients to forward the 
message to friends and acquaintances, who, in turn, are urged to 
forward the message. The Commission seeks comment on whether it would 
further the purposes of CAN-SPAM or assist the efforts of companies and 
individuals seeking to comply with the Act if the Commission were to 
adopt rule provisions clarifying the legal obligations of initiators 
and recipients who forward messages in such ``forward-to-a-friend'' 
scenarios.
    The second issue involves whether several entities or persons 
simultaneously could be considered the ``sender'' of a particular 
electronic mail message under the terms of the Act. For example, an 
email message that promotes an upcoming conference and also includes 
ads from the companies sponsoring the conference may have more than one 
sender. A common concern regarding this type of message is whether it 
may be sent to a recipient who has previously opted out of receiving 
messages from one of the sponsoring companies whose ad is in the 
message. The Commission seeks comment on whether it would further the 
purposes of CAN-SPAM or assist the efforts of companies and individuals 
seeking to comply with the Act if the Commission were to adopt rule 
provisions clarifying the obligations of multiple senders under the 
Act.
    The third issue involves the requirement of Sec.  5(a)(5)(A)(iii) 
of the Act for initiators of commercial electronic mail to include in 
their messages, inter alia, ``a valid physical postal address of the 
sender.'' Some companies and individuals seeking to comply with the Act 
have sought guidance on what is necessary for an address to meet the 
requirements of the Act. Some have asked whether a valid physical 
postal address would include a Post Office box or commercial mail drop. 
The Commission seeks comment on whether it would further the purposes 
of CAN-SPAM or assist the efforts of companies and individuals seeking 
to comply with the Act if the Commission were to adopt rule provisions 
clarifying what constitutes a valid physical postal address of the 
sender.
    There may be other issues of interpretation or compliance that have 
not yet come to the attention of the Commission but that might warrant 
consideration for rulemaking under Sec.  13 of the Act. The Commission 
seeks comment on any such issues, and solicits specific recommendations 
for proposed provisions that might further the purposes of CAN-SPAM or 
assist the efforts of companies and individuals seeking to comply with 
the Act.

IV. Reports Required by CAN-SPAM

    CAN-SPAM requires the Commission to prepare and submit to Congress 
four separate reports within the next two years: A report on 
establishing a nationwide marketing Do Not E-mail registry to be 
submitted by June 16, 2004; a report on establishing a system for 
rewarding those who supply information about CAN-SPAM violations by 
September 16, 2004; a report setting forth a plan for requiring 
commercial email to be identifiable from its subject line by June 16, 
2005; and a report on the effectiveness of CAN-SPAM by December 16, 
2005.

A. National Do Not E-Mail Registry

    Section 9(a) of the CAN-SPAM Act mandates a Commission report 
setting forth ``a plan and timetable for establishing a nationwide 
marketing Do-Not-E-Mail registry.'' The report is to include ``an 
explanation of any practical, technical, security, privacy, 
enforceability, or other concerns that the Commission has regarding 
such a registry; and * * * an explanation of how the registry would be 
applied with respect to children with email accounts.''\18\ Moreover, 
Sec.  9(b) provides that ``the Commission may establish and implement 
the plan, but not earlier than 9 months after the date of enactment of 
this Act.'' Thus, Congress has authorized establishment of a National 
Do Not E-Mail Registry, but is interested in learning of potential 
concerns about practicality, technical feasibility, privacy, and 
enforceability that such a registry raises. The Commission issued a 
Request for Information (``RFI'') to potential vendors seeking 
information on how an effective registry might be structured,\19\ and 
is also seeking comment in response to this Notice that would assist it 
in preparing this report.
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    \18\ CAN-SPAM Act, Sec.  9(a).
    \19\ This RFI is available at: http://www.ftc.gov/ftc/oed/fmo/procure/040224donotemailrfi.pdf. Responses to this RFI were due on 
or before March 10, 2004.
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B. A System for Rewarding Those Who Supply Information About CAN-SPAM 
Violations

    Section 11(1) of the Act requires the Commission, on or before 
September 16, 2004, to submit a report to the Senate Committee on 
Commerce, Science, and Transportation and the House of Representatives 
Committee on Energy and Commerce setting forth a system for rewarding 
those who supply information about violations of the Act. The statute 
further specifies that the report include ``procedures for the 
Commission to grant a reward of not less than 20 percent of the total 
civil penalty collected for a violation of the Act to the first person 
that identifies the person in violation of the Act, and supplies 
information that leads to the successful collection of a civil penalty 
by the Commission.'' (The Act, however, does not authorize the 
Commission to establish or implement such a reward system.) In 
addition, the statute requires that the report also include 
``procedures to minimize the burden of submitting a complaint to the 
Commission concerning violations of [the CAN-SPAM] Act, including 
procedures to allow the electronic submission of complaints to the 
Commission.'' Accordingly, the Commission seeks comment that would 
assist it in preparing this report.

C. Labeling Commercial Electronic Mail

    Section 11(2) of the Act requires the Commission to submit a report 
that sets forth a plan for requiring commercial email to be 
identifiable from its subject line, or an explanation of any concerns 
the Commission has that cause the Commission to recommend against the

[[Page 11779]]

plan.\20\ This report is due on or before June 16, 2005. Accordingly, 
the Commission seeks comment on how best to require that commercial 
email be identifiable from its subject line, and on concerns about 
implementing this type of labeling requirement. In particular, 
information is sought concerning the feasibility, costs, and benefits 
of labeling commercial email.
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    \20\ Section 11(2) expressly contemplates that the means for 
making commercial electronic mail identifiable from its subject line 
should be ``by means of compliance with Internet Engineering Task 
Force Standards, the use of the characters ``ADV'' in the subject 
line, or other comparable identifier.''
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D. Effectiveness and Enforcement of the CAN-SPAM Act

    Section 10 of the CAN-SPAM Act requires the Commission to submit a 
report to Congress providing a detailed analysis of the effectiveness 
and enforcement of the Act and the need (if any) for Congress to modify 
such provisions. This report is due on or before December 16, 2005, and 
must include:
     An analysis of the extent to which technological 
and marketplace developments, including changes in the nature of the 
devices through which consumers access their electronic mail messages, 
may affect the practicality and effectiveness of the Act;
     Analysis and recommendations concerning how to 
address commercial email that originates in or is transmitted through 
or to facilities or computers in other nations; and
     Analysis and recommendations concerning options 
for protecting consumers, including children, from receiving and 
viewing commercial email that is obscene or pornographic.
    Accordingly, the Commission seeks comment on how the effectiveness 
and enforcement of the Act should be assessed, and on the specific 
areas of inquiry set forth in Sec.  10 of the Act.

V. Communications by Outside Parties to Commissioners or Their Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding from any 
outside party to any Commissioner or Commissioner's advisor will be 
placed on the public record. See 16 CFR 1.26(b)(5).

VI. Invitation to Comment

    All persons are hereby given notice of the opportunity to submit 
written data, views, facts, and arguments addressing the issues raised 
by this Notice. Written comments on the National Do Not E-Mail Registry 
must be submitted on or before March 31, 2004. Written comments on all 
other aspects of the CAN-SPAM Act must be submitted on or before April 
12, 2004. Comments should refer to ``CAN-SPAM Act Rulemaking, Project 
No. R411008'' to facilitate the organization of comments. A comment 
filed in paper form should include this reference both in the text and 
on the envelope, and should be mailed to the following address: Federal 
Trade Commission, CAN-SPAM Act, Post Office Box 1030, Merrifield, VA 
22116-1030. Please note that courier and overnight deliveries cannot be 
accepted at this address. Courier and overnight deliveries should be 
delivered to the following address: Federal Trade Commission/Office of 
the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC 
20580. If the comment contains any material for which confidential 
treatment is requested, it must be filed in paper (rather than 
electronic) form, and the first page of the document must be clearly 
labeled ``Confidential.''\21\
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    \21\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    An electronic comment can be filed by (1) clicking on http://www.regulations.gov; (2) selecting ``Federal Trade Commission'' at 
``Search for Open Regulations;'' (3) locating the summary of this 
Notice; (4) clicking on ``Submit a Comment on this Regulation;'' and 
(5) completing the form. For a given electronic comment, any 
information placed in the following fields--``Title,'' ``First Name,'' 
``Last Name,'' ``Organization Name,'' ``State,'' ``Comment,'' and 
``Attachment''--will be publicly available on the FTC Web site. The 
fields marked with an asterisk on the form are required in order for 
the FTC to fully consider a particular comment. Commenters may choose 
not to fill in one or more of those fields, but if they do so, their 
comments may not be considered.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments with all 
required fields completed, whether filed in paper or electronic form, 
will be considered by the Commission, and will be available to the 
public on the FTC Web site, to the extent practicable, at http://www.ftc.gov. As a matter of discretion, the FTC makes every effort to 
remove home contact information for individuals from the public 
comments it receives before placing those comments on the FTC Web site. 
More information, including routine uses permitted by the Privacy Act, 
may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
    Without limiting the scope of issues on which it seeks comment, the 
Commission is particularly interested in receiving comments on the 
following questions. In responding to these questions, include 
detailed, factual support whenever possible.

A. Criteria for Determining Whether ``The Primary Purpose'' of an 
Electronic Mail Message is Commercial

    1. The term ``the primary purpose'' could be interpreted to mean 
that an email's commercial advertisement or promotion is more important 
than all of the email's other purposes combined. Does this 
interpretation provide relevant criteria to help determine the primary 
purpose of an email? Why or why not? When an email has more than one 
purpose, what determines whether one purpose is more important than all 
other purposes combined?
    2. The term ``the primary purpose'' could be interpreted to mean 
that the email's commercial advertisement or promotion is more 
important than any other single purpose of the email, but not 
necessarily more important than all other purposes combined. Does this 
interpretation provide relevant criteria to help determine the primary 
purpose of an email? Why or why not? When an email has more than one 
purpose, what determines whether one purpose is more important than any 
other purpose?
    3. In other contexts, the FTC has stated that marketing material is 
to be judged by the net impression that the material as a whole makes 
on the reasonable observer. The ``net impression'' standard has been 
used to assess the meaning of an advertisement and the adequacy of 
disclosures. This standard takes into account placement of disclosures 
within the marketing material, the proximity of disclosures to the 
relevant claims, the prominence of the disclosures, and whether other 
parts of the marketing material distract attention from the disclosure. 
Should this ``net impression'' analysis be applied to determining 
whether the primary purpose of an email is a commercial advertisement 
or promotion? Why or why not? Are there considerations unique to 
electronic mail that would influence the application of such analysis, 
and if so, how?

[[Page 11780]]

    4. The term ``the primary purpose'' could be interpreted to mean 
that a commercial advertisement or promotion in an email is more than 
incidental to the email. Does this interpretation provide relevant 
criteria to help determine ``the'' primary purpose of an email? Why or 
why not?
    5. In determining whether a commercial advertisement or promotion 
in an email is the primary purpose of the email, one approach could be 
to base the analysis on whether the commercial aspect of the email 
financially supports the other aspects of the email. For example, an 
electronic newsletter may be funded by advertising within the 
newsletter. Such advertising arguably would not constitute the primary 
purpose of the newsletter. Does the issue of whether the commercial 
aspect provides the financial support for non-commercial content 
provide relevant criteria to help determine the primary purpose of an 
email? Why or why not? Does it matter what the overall purpose of the 
newsletter is? Why or why not? Is this an appropriate way to approach 
the question of whether an email's primary purpose is commercial? Why 
or why not?
    6. Should the identity of an email's sender affect whether or not 
the primary purpose of the sender's email is a commercial advertisement 
or promotion? Why or why not? For example, if a professional sports 
league sends email promoting its involvement with a charitable 
organization, should that email be considered to have a commercial 
``primary purpose'' under the Act based on the league's ``for-profit'' 
status?
    7. Are there other ways to determine whether a commercial 
advertisement or promotion in an email is the primary purpose of the 
email? Do these approaches provide relevant criteria to help determine 
the primary purpose of an email? Why or why not?

B. Modifying What Is a ``Transactional or Relationship Message''

    1. Have any changes in electronic mail technology or practices 
occurred since the CAN-SPAM Act became effective on January 1, 2004, 
that would necessitate modification of the CAN-SPAM Act's definition of 
``transactional or relationship message'' to accomplish the purposes of 
the Act?
    2. Email messages that facilitate, complete, or confirm a 
commercial transaction that the recipient has previously agreed to 
enter into with the sender are considered transactional or relationship 
messages under the Act. Are the terms ``facilitate, complete, or 
confirm'' clear, or is further clarification needed to prevent evasion 
of the Act's requirements and prohibitions?
    3. Email messages that provide warranty information, product recall 
information, or safety or security information with respect to a 
commercial product or service used or purchased by the recipient are 
considered transactional or relationship messages under the Act. Should 
the Commission modify or elaborate on this definition? Why or why not?
    4. Email messages that provide notice concerning a change in the 
terms or features of a subscription, membership, account, loan, or 
comparable ongoing commercial relationship involving the ongoing 
purchase or use by the recipient of products or services offered by the 
sender are considered transactional or relationship messages under the 
Act. Should the Commission modify or elaborate on this definition? Why 
or why not?
    5. Email messages that provide notification of a change in the 
recipient's standing or status with respect to a subscription, 
membership, account, loan, or comparable ongoing commercial 
relationship involving the ongoing purchase or use by the recipient of 
products or services offered by the sender are considered transactional 
or relationship messages under the Act. Are the terms used in this 
subsection of the Act (Sec.  3(17)(A)(iii)) clear, or is further 
clarification needed to prevent evasion of the Act's requirements and 
prohibitions?
    6. Email messages that provide, at regular periodic intervals, 
account balance information or other types of account statements with 
respect to a subscription, membership, account, loan, or comparable 
ongoing commercial relationship involving the ongoing purchase or use 
by the recipient of products or services offered by the sender are 
considered transactional or relationship messages under the Act. Should 
the Commission modify or elaborate on this definition? Why or why not?
    7. Email messages that provide information directly related to an 
employment relationship or related benefit plan in which the recipient 
is currently involved, participating, or enrolled are considered 
transactional or relationship messages under the Act. Should the 
Commission modify or elaborate on this definition? Why or why not?
    8. Email messages that deliver goods or services, including product 
updates or upgrades, that the recipient is entitled to receive under 
the terms of a transaction that the recipient has previously agreed to 
enter into with the sender are considered transactional or relationship 
messages under the Act. Should the Commission modify or elaborate on 
this definition? Why or why not?
    9. Some transactional or relationship messages may also advertise 
or promote a commercial product or service. In such a case, is ``the 
primary purpose'' of the message relevant? If so, what criteria should 
determine what is ``the primary purpose'? Should such messages be 
deemed to be commercial email messages? Should they be deemed 
transactional or relationship messages? Why?

C. Modifying the 10-Business-Day Time Period for Processing Opt-Out 
Requests

    1. Is ten (10) business days an appropriate deadline for acting on 
an opt-out request by deleting the requester's email address from the 
sender's email directory or list? Why or why not? If not, what time 
limit would be appropriate? Why?
    2. What procedures are required to delete a person's email address 
from the sender's email directory or list? What reasons, if any, 
prevent such deletion in a time period shorter than ten (10) business 
days? What burdens, including costs, would be borne by senders if the 
time period were shortened? What benefits to consumers would result 
from a time deadline shorter than ten (10) business days for 
effectuating an opt-out request?
    3. What costs are associated with deleting a person's email address 
from a sender's email directory or list? What costs does the recipient 
bear from unwanted electronic mail during the period from submission of 
the request to the effectuation of that request?
    4. What currently is the average time to create and implement 
procedures to delete a person's email address from a sender's email 
directory or list following that person's opt-out request? What factors 
affect the length of time necessary to create and implement these 
procedures?
    5. What currently is the average time in which a request to be 
removed from an email list is processed once these procedures have been 
created and implemented? What factors affect the length of time 
necessary to process such a request?
    6. What is the industry standard, if any, regarding the time frame 
to create and implement procedures for processing opt-out requests? 
What is the industry standard, if any, regarding the time frame to 
process opt-out requests once procedures have been created and 
implemented?

[[Page 11781]]

    7. How are lists of email addresses used for electronic mail 
marketing maintained, distributed, and used? What impact, if any, do 
the maintenance, distribution, and use of these lists have on the time 
it takes to effectuate an opt-out request?
    8. How do the size and structure of the sender's business, the use 
of third-party e-mailers, and the manner in which opt-out requests are 
received affect the time it takes to effectuate an opt-out request?

D. Identifying Additional ``Aggravated Violations''

    1. Section 5(c)(2) of the Act gives the Commission authority to 
``specify additional activities or practices to which [Sec.  5(b)] 
applies if the Commission determines that those activities or practices 
are contributing substantially to the proliferation of commercial 
electronic mail messages that are unlawful under [Sec.  5(a)].'' 
Section 5(b) identifies four ``aggravated violations.'' What additional 
activities or practices, if any, should be treated as ``aggravated 
violations'' under the Act? Why should these activities or practices be 
considered ``aggravated violations'? How do these activities or 
practices contribute substantially to the proliferation of commercial 
e-mail that violates Sec.  5(a)? Do these activities or practices have 
any use other than initiating e-mail that violates the Act?
    2. Are there new technologies that have been developed or are in 
development that would contribute substantially to the proliferation of 
commercial e-mail that is unlawful under Sec.  5(a)? If so, what are 
they? Should they be added to the list of ``aggravated violations'' 
under Sec.  5(b)? Why or why not? What are the costs and benefits to 
industry in implementing procedures to overcome these technologies? 
What are the costs and benefits to consumers? Do these new technologies 
have any use other than initiating e-mail that violates the Act?

E. Issuing Regulations Implementing the Act

    1. Section 3(16) of the Act defines when a person is a ``sender'' 
of commercial e-mail. The definition appears to contemplate that more 
than one person can be a ``sender'' of commercial e-mail; for example, 
an e-mail containing ads for four different companies. In such a case, 
who is the ``sender'' of the e-mail? What costs or burdens may be 
imposed on such entities if all are determined to be ``senders''? What 
costs or burdens may be imposed on consumers if only the entity 
originating the e-mail is determined to be the ``sender''? If a 
consumer previously has exercised his or her rights under Sec.  5(a)(3) 
by ``opting out'' from receiving commercial e-mail from one of the 
companies advertised in the e-mail example above, has Sec.  5(a)(4) of 
the Act been violated? If so, by whom?
    2. Should the Commission use its authority in Sec.  13 to issue 
regulations clarifying who meets the definition of ``sender'' under the 
Act? If so, how? If not, why not?
    3. The Act defines ``initiate'' to mean originate or transmit, or 
procure the origination or transmission of, a message. In turn, the 
term ``procure'' means to pay, provide consideration, or ``induce'' a 
person to initiate a message on one's behalf.
    a. Do ``forward-to-a-friend'' and similar marketing campaigns that 
rely on customers to refer or forward commercial e-mails to someone 
else fall within the parameters of ``inducing'' a person to initiate a 
message on behalf of someone else?
    b. Are there different types of such ``forwarding'' marketing 
campaigns? What forms do these campaigns take?
    c. Should these marketing campaigns have to comply with the Act? 
Why or why not? If so, who should be considered a person who 
``initiates'' the message when one recipient forwards the message to 
another person? Who should be required to provide an ``opt-out'' 
mechanism for the message? Should each person who forwards the message 
be required to comply with the Act? Should the original sender of the 
message remain liable for compliance with the Act after the original 
recipient forwards the message to someone else? Why or why not?
    d. Do the Act's requirements and prohibitions reach e-mail messages 
containing advertisements sent by using a Web site that urges or 
enables individuals to e-mail articles or other materials to friends or 
acquaintances? How, if at all, does the Act apply to this situation 
when recipients have previously ``opted-out'' of receiving e-mails from 
the advertised entities?
    e. Should unsolicited commercial e-mail campaigns that rely on 
having customers refer or forward the e-mail to other parties be 
treated differently from other unsolicited commercial e-mail? Why or 
why not? If there are different types of these campaigns, should the 
different types be treated differently? Why or why not?
    f. If referrals or forwarding of e-mails should be distinguished 
from other types of e-mail, how should they be distinguished? What, if 
any, restrictions should be placed on them? Why? What disclosures, if 
any, should be required? Why? Should the Commission distinguish between 
different types of ``forwarding'' campaigns? Why or why not?
    g. What are the costs and benefits of forwarded commercial e-mail 
campaigns to consumers? To businesses? Are the costs and benefits to 
consumers and industry different for forwarded commercial e-mail 
campaigns than for other types of unsolicited commercial e-mail? Why or 
why not?
    4. Section 5(a)(5)(A)(iii) requires the disclosure of ``a valid 
physical postal address of the sender'' in each commercial electronic 
mail message. How should this required disclosure be interpreted? 
Should a PO Box be considered a ``valid physical postal address''? Why 
or why not? Should a commercial mail drop be considered a ``valid 
physical postal address''? Why or why not?
    5. Section 5(a)(1), regarding false or misleading transmission 
information, addresses information displayed in a message's ``from'' 
line. Is the Act sufficiently clear on what information may or may not 
be disclosed in the ``from'' line? What ``from'' line information 
should be considered acceptable under the Act? Why? If a sender's e-
mail address does not, on its face, identify the sender by name, does 
that e-mail address comply with Sec.  5(a)(1)?

F. National Do Not E-Mail Registry Report

    1. The Commission is required to write a report setting forth a 
plan and timetable for establishing a nationwide marketing Do Not E-
mail Registry, including an explanation of any practical, technical, 
security, privacy, enforceability, or other concerns regarding such a 
registry, and an explanation of how the registry would be applied with 
respect to children with email accounts. The Commission issued a 
Request for Information (``RFI'') to potential vendors seeking 
information on how an effective registry might be structured, and is 
also seeking information from the public in this Notice. What 
practical, technical, security, privacy, enforceability, and other 
concerns exist with respect to establishment of such a registry? Can 
these concerns be overcome so that a registry would be workable and 
effective? If so, what might be an appropriate plan and timetable for 
establishing a registry? Is such a registry a practical, efficient, and 
workable method of solving the spam problem? What are the relative 
costs and benefits?

[[Page 11782]]

    2. How could such a registry be structured and applied to best 
protect children with email accounts? Could such a registry be 
effective as a means to protect children from inappropriate spam?

G. System for Rewarding Those Who Supply Information About CAN-SPAM 
Violations

    1. What kinds of information would be most useful in facilitating 
enforcement of the Act? What kinds of information can the FTC 
reasonably expect to receive? Would such information likely be received 
in a form and manner that would make it useful in an enforcement action 
to prove violations of the Act? How would this information advance the 
Commission's ability to identify and locate people who violate the Act? 
How could a system for rewarding those who supply information about 
violations of the Act be structured? What are the relative costs and 
benefits?
    2. What procedures would be necessary to determine who is ``the 
first person that identifies the person in violation of the Act, and 
supplies information that leads to the successful collection of a civil 
penalty by the Commission,'' as specified by the Act? What other 
procedures would be necessary to implement a reward system, e.g., to 
resolve disputes among competitors seeking to be ``the first person 
that identifies the person in violation of the Act''?
    3. Is the phrase ``identifies the person in violation of the Act'' 
sufficiently clear to provide a bright line with respect to who will be 
entitled to a reward? If not, how can deciding this issue be made more 
certain?
    4. How would the prospect of receiving a portion of civil penalties 
collected by the FTC affect existing incentives for persons who have 
information about the identity of spammers to come forward with such 
information?
    5. How would a reward system affect the behavior of ISPs and other 
industry participants with regard to initiating and conducting 
investigations of spammers, and other approaches to addressing 
unsolicited commercial email? Under what circumstances, if any, would 
ISPs and other industry participants likely submit information under a 
proposed reward system? What factors would be relevant to an ISP's 
choice whether to proceed under a reward system as opposed to 
proceeding under the private right of action for ISPs created by Sec.  
7(g) of the Act? Specifically, what kind of information would ISPs and 
other industry participants likely supply, and in what format? Would 
such information likely be received in a form and manner that would 
make it useful in an enforcement action to prove violations of the Act?
    6. How successful have been the efforts of private entities or 
others to establish and operate reward programs similar to the one 
contemplated in the Act? Have such reward programs been successful in 
eliciting information otherwise unavailable to support enforcement or 
other legal action? Have such reward programs been successful in 
achieving the goal of reducing or deterring certain conduct?
    7. How might the Commission implement ``procedures to minimize the 
burden of submitting a complaint to the Commission concerning 
violations of [the CAN-SPAM Act], including procedures to allow the 
electronic submission of complaints to the Commission,'' as provided by 
the Act?

H. Study of Effects of the CAN-SPAM Act

    1. The Commission is required to write a report providing a 
detailed analysis of the effectiveness and enforcement of the 
provisions of the Act and the need (if any) for the Congress to modify 
such provisions. What measures of the effectiveness of the Act should 
the Commission consider?
    2. Are there any developments likely to reach the market in the 
next two years that are likely to affect the effectiveness of the Act? 
How should the Commission monitor these developments?
    3. This report must include an analysis and recommendations 
concerning how to address commercial email that originates in or is 
transmitted through or to facilities or computers in other nations, 
including initiatives or policy provisions that the Federal government 
could pursue through international negotiations, fora, organizations, 
or institutions. Given the ease of falsifying header information, how 
can the Commission determine the extent to which email originates in or 
is transmitted through or to facilities or computers in other nations? 
How should the Commission conduct this analysis?
    4. This report must include an analysis and recommendations 
concerning options for protecting consumers, including children, from 
the receipt and viewing of commercial email that is obscene or 
pornographic. How should the Commission conduct this analysis?

I. Study of Subject Line Labeling

    1. Prior to the enactment of the CAN-SPAM Act, many states required 
that unsolicited non-adult commercial email have an ``ADV'' label. How 
was this provision enforced by the States? What obstacles to 
enforcement did the States encounter? What, if any, limitations were 
found in these laws that the Commission should consider addressing in 
the required report regarding subject line labeling?
    2. How effective is labeling?
    3. Should the Commission recommend that all unsolicited non-adult 
commercial email be labeled ``ADV ''? Why or why not?
    4. Would labeling, as part of a regime that includes other 
technological or law enforcement approaches, be an appropriate and 
effective tool to help control spam? Why or why not?
    5. What are the costs and benefits to industry of labeling?
    6. What are the costs and benefits to consumers of labeling?
    7. If the Commission recommends that non-adult commercial email 
have an ``ADV'' label, should it also recommend that senders be allowed 
to provide additional explanatory information in the subject line; 
e.g., ``ADV: Automobiles''? Why or why not?

J. Regulatory Flexibility Act

    1. What burden to small business does the Act impose in the Act's 
requirements that certain disclosures be made in commercial electronic 
mail messages? How, if at all, may the burdens associated with required 
disclosures be minimized?
    2. Does the Act impose any disparate impact on small businesses? If 
so, how may this disparate impact be minimized?
    3. Describe and, where feasible, estimate the number of small 
entities to which the Act applies.

VII. Conclusion

    The Commission will proceed from this ANPR with proposed rulemaking 
and drafting of required reports. Evaluation of comments submitted in 
response to this ANPR will comprise part of the Commission's rulemaking 
and report-drafting processes.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-5500 Filed 3-10-04; 8:45 am]
BILLING CODE 6750-01-P