Legislators looking out for privacy

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Congress wants to can the spam. But how? With e-mail marketing on the rise, sharp differences have emerged over what is the best legislative formula to reduce the growing problem of junk e-mail, or spam. The rub for Congress is to protect consumers from unsolicited e-mail while also protecting the rights of legitimate marketing companies that are boosting their e-mail efforts. Indeed, any bill targeting the Internet is fraught with complexity because this legislation must tackle questions about the First Amendment, e-commerce, telecommunications and technology. And although the bills target consumers, they would most certainly impact b-to-b companies.

"Privacy has been a wave for awhile," said Diana McKenzie, a senior partner with the Chicago-based law Gordon & Glickson L.L.C., which specializes in technology law. "But now, with the proliferation of the Web, [marketing] companies are accumulating data on consumers in ways they never have before, and that’s making Congress nervous."

The House passed the Unsolicited Electronic Mail Act of 1999 in July 2000. The Senate hasn’t yet acted on the legislation, which would require all unsolicited e-mail senders to provide accurate return addresses on their e-mail and to explicitly label unsolicited commercial e-mail. Although anti-spam legislation has been introduced in the Senate, the agenda there is unclear since Vermont Sen. James Jeffords bolted the GOP to become an independent, giving Democrats control.

House action

Two bills have recently emerged from House committees that go beyond mandating return Web addresses. Because of this, both bills have piqued the interest—and in some cases, the ire—of marketing companies conducting business on the Web.

The bill introduced by Rep. Heather Wilson (R-N.M.), for example, would allow Internet service providers who bear the costs of having to deliver unwanted e-mail messages the right to sue those who dump spam into their networks.

The Wilson bill passed the House Energy and Commerce Committee earlier this year, recently passed the House Judiciary Committee and is now headed to the House Rules Committee. The Rules Committee will try and wed the Wilson bill with similar legislation introduced by Rep. Bob Goodlatte (R-Va.) that would prohibit unsolicited e-mail.

However, the bills bifurcate when it comes to opt-out, or the virtual equivalent of hanging up a "No solicitations" sign. The Wilson bill includes an opt-out clause for both consumers and ISPs after the initial point of contact, whereas the Goodlatte bill includes no such provision.

Wilson said the language in the bill concerning opt-out ought to be amenable to Web marketers. "These are customers who don’t want [marketers’] products and don’t want to see their ads. All [marketers] have to do is maintain their databases," she said, adding that the language in the bill allowing both individuals and ISPs to sue companies that send spam provides the bill’s legislative teeth.

Goodlatte said he’s hopeful the Rules Committee will be able to work out a compromise. "We want to fight spam but don’t want to expand legislation that would be too excessive or serve as a disincentive to legitimate businesses" marketing via e-mail. He stressed he does not want ISPs to become "mini Federal Trade Commissions."

Open invitation for trial lawyers?

The Interactive Advertising Bureau has kept a close eye on both bills. The group fully supports Goodlatte’s bill, but has some concerns about the Wilson bill, according to John Kamp, a lawyer with the Washington law firm Wiley, Rein & Fielding and counsel for the IAB.

"There’s enough ambiguity in the [Wilson] bill to invite activist plaintiff lawyers to file lots of suits against e-mailers," Kamp said. "We’re worried about the costs of frivolous lawsuits against e-mail marketers."

Tony Hadley, director of government affairs for Experian Information Solutions Inc., which provides e-mail and direct marketing services, said, "The narrower bill the better, because then it allows industry to mature around the market and develop its own standards."

But John Mozena, co-founder and VP of the Coalition Against Unsolicited Commercial E-mail, said the Wilson bill doesn’t go far enough.

"There are far too many marketers for the average user to effectively opt out after the initial point of contact," Mozena said. He pointed to statistics showing that if 1% of the nation’s 24 million small-business operations sent one e-mail per day it would equal 657 messages every day for the average Internet user. The coalition calls for a pure opt-out, or a pre-emptive strike against any e-mail marketing.

Yet Web marketers bristle at such restrictions. "The question should be, ‘What is the information I want people to have about me?’" said Frank Ingari, chairman and founder of Wheelhouse Corp., a marketing technology services firm. "There’s some information that is private in context but the individual wants the vendor to have. Junk e-mail is in the eye of the receiver."

Because enacting federal legislation can be a long and arduous process, it may behoove b-to-b companies to cultivate their own e-mail marketing standards.

International Data Group, for instance, created an e-mail marketing policy five years ago that includes an opt-out clause at the end of the text.

Deb Goldstein, president of IDG List Services, said privacy and permission should be the cornerstones of e-mail marketing. "As long as it’s clear to the user that he is being asked permission for a particular purpose, then the marketing company has done its job."

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