Good Spam vs. Bad Spam

And then there’s Congress and its wimpy, half-hearted anti-spam legislation which would allow a company to send unsolicited e-mail until a recipient specifically says to stop. The Washington Post reports that the proposed law, which already has been sharply criticized by anti-spam activists as being too cozy with the interests of the bulk e-mail industry, now includes a provision to let the e-mailers regulate themselves via some sort of electronic seal of approval. The idea, apparently, is to draw a sharp distinction between good and bad e-mailers and thereby legitimate the junk messages from the good ones. Never mind that many Internet users draw no such distinction.

Congress appears to be headed toward feel-good anti-spam legislation, which will let politicians on the campaign trail claim success against Internet pornographers and swindlers without actually having to do anything that might upset corporate interests. Congress also may forbid states to impose restrictions on e-mailers that are harsher than the federal standard, so expect any law that emerges from Capitol Hill to take a protracted detour through the courts. The states will complain that Congress has exceeded its authority, and the government will counter that the Internet is properly overseen only by federal authorities.

California’s new law may be in court soon, too. Marketers are already howling that their constitutional right to free speech will be trampled by the anti-spam law, a dubious claim which we’ll consider in a moment and the US Supreme Court may be forced to take up shortly thereafter. But other provisions of California’s legislation seem less likely to survive a constitutional challenge: the law would forbid California companies to send unsolicited commercial e-mail outside the state and companies outside of California to send spam into the state, and that raises some thorny issues about unconstitutional interference with interstate commerce.

Playing Hardball With Spammers

But if the cross-border provisions survive, the benefits would likely be felt far beyond the Golden State. The executive director of Network Advertising Initiative, a group of companies which handle marketing e-mails for technology companies, told the New York Times that California accounts for up to 20 percent of all incoming and outgoing e-mail and that would incline marketers to make the state’s new standards the “lowest common denominator” in their e-mailing strategies. It’s just too much work to determine where an e-mail address holder lives; it’s easier to make all e-mail conform.

The provision of the new law that should scare marketers the most appears to be safe from a court challenge: unlike most state anti-spam laws, California’s gives the state, providers of e-mail service, and all spam recipients—in other words, just about anyone—the right to file suit against spammers. Uninterested, disinterested, and overworked prosecutors would be no impediment to action.

California’s anti-spam law allows companies to send e-mail only to existing customers, to people who inquire about products and services, and to those who have “expressly consented to receive e-mail advertisements from the advertiser.” Bought or rented lists of e-mail addresses, even those legitimately gathered by another advertiser, would not skirt the law’s requirements on consent. If other legal challenges fail, expect the definition of “consent” and when and if it has been granted to be the battleground on which marketers fight back.

It will be interesting, and probably entertaining, to see Californians make use of their new law. E-mail marketers predict that small claims courts will be clogged by people who don’t remember agreeing to receive e-mail and are unfairly implicating legitimate marketers. Such accusations would be a terrible travesty of justice, of course, because marketers would never send e-mail to someone who didn’t want it.

Another provision of the anti-spam law may open the door to cases bigger than small claims courts can handle. Unlike most anti-spam laws, which apply only to the company that actually sends the marketing e-mail, California’s measure does not shield the company whose product is being advertised. Advertising and marketing agencies, and the guy shipping penis enlargers out of his basement, will have to factor this new liability into marketing plans.

Sure, the law may create a whole new field for ambulance-chasing trial lawyers, but that’s OK with me. It may not be pretty, but there is a genuine public benefit in flogging recalcitrant insurance companies, health care providers, and government bureaucrats. I welcome the addition of spammers to the list.

The Microsoft Loophole

Despite the “no loopholes” claim by the bill’s sponsor, Microsoft apparently managed to create at least a small one. The Times reports that the anti-spam bill “exempts some e-mail advertising sent by the provider of a free e-mail service” such as Microsoft’s Hotmail. The Times calls this an apparent concession to Microsoft, which had opposed similar California legislation earlier this year but is now on board with the new bill. I usually don’t condone Microsoft throwing its weight around, but this time it seems reasonable: Hotmail customers already know, or should know, that there is no such thing as free; the quid pro quo for Hotmail is advertising.

But let’s get back to that constitutional question. Do e-mail marketing companies have a right to free speech? Would California violate the First Amendment if it restricts their ability to send spam? My first impulse is an unequivocal “no!” but the issue isn’t that simple, and I’m forced to fall back to an equivocal “no” while we await judicial clarification. The issue of corporate speech is coming to a head on several fronts (including campaign finance reform), and it’s only a matter of time, and not much time at that, until the US Supreme Court will have no choice but to clarify a hodgepodge of free speech rulings (and non-rulings) and Congress will be forced to put up or shut up.

A Dilemma for the Whirlwind Congress

A federal judge in Denver recently put the national do-not-call registry on hold saying regulators discriminated against commercial telemarketers by exempting political parties, charities, religious institutions, and pollsters from the restrictions. It was the second time in a week that a federal court had blocked the no-call plan. Earlier, a court ruled that the Federal Trade Commission had not been given the legal authority to establish the registry. In a whirlwind of activity, a nearly unanimous Congress took care of the problem. And no wonder: 50 million potential voters have signed up for the do-not-call list and that was more than enough votes to shove corporate interests to the back seat. But no speedy vote followed the second court ruling; the free speech issue is more complicated and the most likely solutions may prove painful for Congress.

The federal judge didn’t specifically instruct regulators on what to do to pass congressional muster, but he suggested in his ruling that broadening the no-call list to include the exempted organizations might be enough. Or, Congress could create a mechanism thorugh which people could choose which, if any, categories of annoying phone calls to accept. You could, for example, opt out of all marketing calls except those from churches and charities.

Oooh!—such a dilemma for Congress! Either bag the registry and risk handing 50 million votes to the opposition in the next election or jettison the self-serving exemptions for political parties and polling.

The registry may be tied up in court for while, but no matter how the constitutional issues are resolved, you can bet that Congress will still bend to the collective will of those 50 million Americans and do something about abusive telemarketing even at the expense of its own interests.

Critical Mass

Congress snapped to when it saw how Americans jammed the FTC’s phone lines and Web site in a rush to sign up for do-not-call registry. And it snapped to again when it became clear that Americans objected to an FCC plan to further loosen restrictions on mega-media mergers and broadcasting industry consolidation. Now it’s time for 50 or 60 million Americans to tell Congress to get serious about spam, too.

The pending federal legislation isn’t nearly good enough; Congress needs to get out of bed with the spammers and follow California’s lead in flat out banning unsolicited e-mail.

Stopping spam may be just as important as the do-not-call registry to tens of millions of Americans, but the issue hasn’t reached critical mass. The stunning popularity of the do-not-call registry and the defeat of the FCC suggest that it will, and likely sooner than later.

When it does, every politician who wants to get re-elected will suddenly, miraculously, become a champion of the people.