FTC Opens the Door To Spam Regulation

This new initiative underscores the Commission's interest in exploring the far reaches of its authority to regulate deceptive practices and threatens more traditional e-mail marketers who try to get their messages opened amid the clutter of other e-mail in consumers' in boxes.

New Study Supports Focus On 'From' and 'Subject' Lines

On April 29, the FTC released study results of 1,000 unsolicited pieces of commercial e-mail. Results showed that 66% contained false 'From' lines, 'Subject' lines or message text. Of the sample studied, 22% contained information in the subject line that appeared to be false. Almost half of the sample (42%) misrepresented that the sender had a personal relationship with the recipient.

Until now, the FTC's regulation of spam has focused on whether the text of a message was deceptive or misleading. To that end, the FTC has brought a number of actions against the deceptive marketing of work-at-home schemes, investment opportunities, dietary supplements and similar products and services. The Commission's new focus on information in the from and subject lines is a significant expansion of the Commission's regulation of spam because marketers in legitimate industries often use attention-grabbing techniques aimed at getting consumers to notice and read their messages.

Opening the Door

On April 17, the Commission filed a complaint in U.S. District Court charging the defendant used deceptively bland subject lines, false return addresses, and empty 'reply-to' links in an attempt to promote an adult Web site. According to the FTC complaint, the deceptive subject lines enabled the spam to evade filters meant to block spam and exposed consumers ' including children and individuals at their workstations ' to unwanted, and often graphic, sexual material. The e-mails contained subject lines such as 're: your email address,' 'Did you hear the news,' 'New movie info,' and 'Payment Declined' ' which suggested the sender had a pre-existing relationship with the recipient. The FTC alleged that because the subject lines were deceptive, consumers had no reason to expect pornographic material and were subsequently injured.

The FTC's focus on deceptive subject lines relies on an old theory designed to protect consumers from overly-aggressive door-to-door salesmen who gained access into consumers' homes through deceptive representations or material omissions. Under the so-called 'deceptive door-opener' theory, initial material misrepresentations may violate Section 5 of the FTC Act, even if they are followed by truthful statements. As applied to e-mail, the Commission now takes the position that false information in a 'from' or 'subject' line is material, and thus may violate Section 5 because consumers often decide to open an e-mail based on such information.

The Commission's use of its 'deceptive door-opener' theory is important because it is a direct attack on practices that have long been common in the direct marketing industry. Marketers often embellish direct mail envelopes in an effort to get consumers to open the mail. The FTC's renewed application of the deceptive door-opener theory, however, should make marketers pause before using such techniques in the future. Under this theory, marketers can expect the FTC to scrutinize any subject line that may misrepresent e-mail content. E-mail marketers, then, must carefully consider subject lines used when attempting to solicit consumers to review message content.

Recent FTC Commercial E-mail Sampling

• 66% of consumers received e-mail containing false 'From' lines, 'Subject' lines, or message text.
• 22% of e-mails had apparently false subject line information.
• 42% misrepresented a pre-existing relationship with recipients.

D. Reed Freeman Jr. is a partner in the competition group of Collier Shannon Scott in Washington, DC. He counsels clients on a wide range of consumer-protection issues, including privacy, information security, advertising and consumer-credit law. He is a member of E-commerce Law & Strategy's editorial advisory board. W. David Hubbard is an associate at Collier Shannon Scott.

The Federal Trade Commission (FTC) is under enormous pressure to address the growing proliferation of spam. n light of Constitutional and statutory limitations, the FTC has been forced to focus its efforts on deceptive spam, as opposed to the broader problem of too many unsolicited messages crowding consumers' in boxes.

Recent FTC activities ' a study and an accompanying enforcement action ' however, represent a significant expansion of the types of e-mail that are likely to draw the FTC's scrutiny.

The Commission's new focus is on spam that contains deceptive 'from' and 'subject' lines, even if this information does not relate to the text of the e-mail and even if its entire effect is to cause consumers to open an e-mail they otherwise might have deleted without opening.

This new initiative underscores the Commission's interest in exploring the far reaches of its authority to regulate deceptive practices and threatens more traditional e-mail marketers who try to get their messages opened amid the clutter of other e-mail in consumers' in boxes.

New Study Supports Focus On 'From' and 'Subject' Lines

On April 29, the FTC released study results of 1,000 unsolicited pieces of commercial e-mail. Results showed that 66% contained false 'From' lines, 'Subject' lines or message text. Of the sample studied, 22% contained information in the subject line that appeared to be false. Almost half of the sample (42%) misrepresented that the sender had a personal relationship with the recipient.

Until now, the FTC's regulation of spam has focused on whether the text of a message was deceptive or misleading. To that end, the FTC has brought a number of actions against the deceptive marketing of work-at-home schemes, investment opportunities, dietary supplements and similar products and services. The Commission's new focus on information in the from and subject lines is a significant expansion of the Commission's regulation of spam because marketers in legitimate industries often use attention-grabbing techniques aimed at getting consumers to notice and read their messages.

Opening the Door

On April 17, the Commission filed a complaint in U.S. District Court charging the defendant used deceptively bland subject lines, false return addresses, and empty 'reply-to' links in an attempt to promote an adult Web site. According to the FTC complaint, the deceptive subject lines enabled the spam to evade filters meant to block spam and exposed consumers ' including children and individuals at their workstations ' to unwanted, and often graphic, sexual material. The e-mails contained subject lines such as 're: your email address,' 'Did you hear the news,' 'New movie info,' and 'Payment Declined' ' which suggested the sender had a pre-existing relationship with the recipient. The FTC alleged that because the subject lines were deceptive, consumers had no reason to expect pornographic material and were subsequently injured.

The FTC's focus on deceptive subject lines relies on an old theory designed to protect consumers from overly-aggressive door-to-door salesmen who gained access into consumers' homes through deceptive representations or material omissions. Under the so-called 'deceptive door-opener' theory, initial material misrepresentations may violate Section 5 of the FTC Act, even if they are followed by truthful statements. As applied to e-mail, the Commission now takes the position that false information in a 'from' or 'subject' line is material, and thus may violate Section 5 because consumers often decide to open an e-mail based on such information.

The Commission's use of its 'deceptive door-opener' theory is important because it is a direct attack on practices that have long been common in the direct marketing industry. Marketers often embellish direct mail envelopes in an effort to get consumers to open the mail. The FTC's renewed application of the deceptive door-opener theory, however, should make marketers pause before using such techniques in the future. Under this theory, marketers can expect the FTC to scrutinize any subject line that may misrepresent e-mail content. E-mail marketers, then, must carefully consider subject lines used when attempting to solicit consumers to review message content.

Recent FTC Commercial E-mail Sampling

• 66% of consumers received e-mail containing false 'From' lines, 'Subject' lines, or message text.
• 22% of e-mails had apparently false subject line information.
• 42% misrepresented a pre-existing relationship with recipients.

D. Reed Freeman Jr. is a partner in the competition group of Collier Shannon Scott in Washington, DC. He counsels clients on a wide range of consumer-protection issues, including privacy, information security, advertising and consumer-credit law. He is a member of E-commerce Law & Strategy's editorial advisory board. W. David Hubbard is an associate at Collier Shannon Scott.