Earlier this month a federal judge ordered a Las Vegas-based company to pay a whopping $2.5 million fine for making false advertising claims and sending illegal email messages in violation of the FTC Act and the CAN-SPAM Act. The company was sending unsolicited email to people promoting human growth hormone (HGH) related drugs (you know, the stuff that Roger Clemens never took).

The judge found that the defendants violated the FTC Act (which outlaws fraudulent and deceptive business practices) because their ads falsely claim that the drugs cause rapid, substantial and permanent weight loss, in addition to having anti-aging qualities.

But what makes the case most interesting for our Roundtable’s members, of course, is the CAN-SPAM component. The violations cited by the FTC are very basic; they’re not “high-tech” offenses such as using open relays or forged headers to physically distribute spam. What this particular company got hit for was, in large part, three very simple CAN-SPAM violations: (1) using misleading subject lines; (2) not including a valid postal address in their emails; and (3) not including—or facilitating—opt-out functionality.

So for anyone who ever doubted that the CAN-SPAM Act had “teeth,” make no mistake about it: The FTC can and will make use of the full scope of CAN-SPAM to bring cases against offenders, and it ain’t hard to do so.

Our advice: Never overlook the basics. Check, check and check again to make sure that your email programs are 100% compliant. Make sure strict governance and procedures are in place. Because all it takes is one untrained new email marketing associate to click “send” without including a postal address and the FTC will come knocking on your door.

You can wag your finger at the camera and claim “misremembrance” all you want, but regardless of whether you’re pushing HGH in baseball locker-rooms or email inboxes, no one’s going to believe you.

—eec Advocacy Roundtable co-chairs Jordan Cohen of Epsilon and Robb Walters of Costco

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What is the status of the FTC’s CAN-SPAM rulemaking and is the agency going to reduce the opt-out timeframe?

It’s already been more than two-and-a-half years since the FTC issued its discretionary CAN-SPAM Notice of Proposed Rulemaking (NPRM) in which the agency proposed, among other things, to reduce marketers’ allowable opt-out processing timeframe from 10 to three business days.

At last summer’s DMA Email Policy Summit, FTC Spam Coordinator Sana Chriss told attendees that “a team is in place,” and the FTC was working on finalizing its rules. However, at the same time Chriss noted that, because the rulemaking is discretionary, it’s up to the agency as to if and when final CAN-SPAM rules are issued at all, and if so what they’d ultimately say.

So will the opt-out timeframe be reduced? Nothing can be said for certain, but it is encouraging that Chriss acknowledged at that meeting that the vast majority of the 151 organizations who submitted comments to the agency in response to its NPRM described operational challenges that would make it overly burdensome to comply with a 3-day opt-out. You can review those comments for yourself here.

Another positive development has been the agency’s December 2007 report to Congress on the current state of the spam problem. In its “Next Steps” section, the document made no reference to reducing the opt-out timeframe, instead looking to technological developments like email authentication, collaborative government-industry initiatives and consumer education programs as more promising anti-spam measures.

So what should marketers do?

● Stay “in-the-know.” Keep in mind that the opt-out period still could be reduced, and closely follow developments on the Hill as relates to any changes to CAN-SPAM. One way to make sure you’re not out in the cold when it comes to knowing what to comply with and how to do so is by participating in the eec’s Advocacy Roundtable! Members can sign up today by shooting an email to Ali Swerdlow at ali@emailexperience.org. Not an eec member yet? Ali can help you with that too!

● Make opting-out fast and simple. Some very reputable marketers have some very legitimate reasons for needing a full 10 business days to process opt-outs, and it’s essential that we preserve the status quo in that regard. That said, for the sake of maintaining positive customer relationships and improving deliverability, we always recommend processing opt-outs as fast as possible. Making the process shorter for your company will also put you on solid footing in the event that the FTC does eventually decide to reduce the opt-out timeframe.

We’d like to hear your thoughts on this subject. How would a reduced opt-out timeframe impact your company and/or clients? Also, has the lack of decisive clarity on additional outstanding CAN-SPAM issues such as “forward to a friend” and “multiple sender” campaigns been an impediment to your marketing efforts? Let us know by commenting below or emailing the Advocacy Roundtable at advocacy@emailexperience.org.

—eec Advocacy Roundtable co-chairs Jordan Cohen of Epsilon and Robb Walters of Costco

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When asked in a JupiterResearch Consumer survey, just 17% of the online population cited adware as a strong concern that had impacted their use of the Internet in the last 12 months. Moreover, 15% of the online population stated that they had paid for anti-adware software, indicating that this portion of the population that is rightly concerned with ad-tracking and malicious attempts to monitor their behavior are already self-regulating this situation.

Such a do-not-track list is impractical for a number of reasons. JupiterResearch continues to find that consumers regularly clear their cache and delete cookies in order to protect their surfing behavior. Beyond that engrained behavior, the notion of computer sharing at home, work and school makes the notion of a do-not-track list a logistical nightmare. This reality coupled with the comparison to the do-not-call list that the document cites is not accurate. The Do Not Call list works particularly because of the friction involved with setting up a phone number. While difficult, a malicious advertiser could circumvent such friction by setting up a new IP address and thus such a do-not-track list is merit-less just as the failed proposal for a do-not-email list was. Malicious email senders can hide behind a new and changing array of IP addresses and the same is true for those bad actors in the online ad space.

Furthermore, such a system would undermine a significant and growing portion of the online economy that is behavioral targeting. Many technology companies—and increasingly, legitimate publishers—are using behavioral tracking to increase advertising revenue versus one ad for all.

Lastly, such a notion of a an IP-based do-not-track list would fly in the face of the FCC mandate requiring digital transmission of TV signals (coming to a set-top box in the near future). The advertiser/publisher benefit of that FCC mandate is to potentially target the IP address of a set-top box in order to deliver more meaningful and relevant ads and content. The FTC proposal is in conflict with the promise of the FCC plan and would simply raise costs and stifle the innovation of relevance.

—David Daniels of JupiterResearch