FTC Seeks Comment on Proposed Rule Defining Primary Purpose of Commercial E-mail; FCC Adopts Rule Governing Commercial E-mail Sent to Wireless Devices

Date: Aug 16, 2004

As directed by Congress in the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN SPAM Act of 2003), the Federal Trade Commission (FTC) has proposed a rule defining the relevant criteria determine the "primary purpose" of a commercial e-mail for purposes of the CAN SPAM Act (69 Fed. Reg. 50091 (Aug. 13, 2004)). Also pursuant to the CAN SPAM Act, the Federal Communications Commission (FCC) has adopted rules governing commercial messages to wireless devices. In today's e-connected world, both rules will have a major impact on an array of businesses, both for-profit and non-profit.


The CAN SPAM Act defines a "commercial electronic mail message" as "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service" (emphasis added). In an Advance Notice of Proposed Rulemaking (ANPR) published on March 11, 2004, the FTC solicited comments on the definition of "primary purpose," as well as several issues of discretionary rulemaking raised by the CAN SPAM Act. The FTC received more than 13,000 comments, approximately 220 of which addressed the "primary purpose" issue. Due to the approaching statutory deadline for completing the primary purpose rulemaking (December 16, 2004), the FTC now seeks comment on its proposed rule defining "primary purpose" for messages with "mixed" content largely based on the net impression of the recipient. Comments are due September 13, 2004. The FTC will address the discretionary rulemaking issues in a future notice.

The FTC's proposed rule on the "primary purpose" definition for CAN SPAM purposes would affect both for-profit and non-profit e-mail communications, including the transmission of advertising-supported electronic content, such as newsletters. The FTC's proposed rule sets forth three sets of criteria for determining the "primary purpose" of an e-mail message:

  • If an e-mail only contains content advertising or promoting a product or service, then the primary purpose of the e-mail would be deemed commercial.
  • If an e-mail contains both commercial and "transactional or relationship" content, then the primary purpose of the e-mail would be deemed commercial if
    • a recipient "reasonably interpreting the subject line of the message" would conclude that the message advertises or promotes a product or service, or
    • the transactional/ relationship component does not appear at or near the beginning of the message.
  • If an e-mail contains both commercial content and content that is neither commercial nor transactional/ relationship, then the primary purpose of the e-mail would be deemed commercial if
    • a reasonable interpretation of the subject line would be that the message advertises or promotes a product or service, or
    • a reasonable interpretation of the body of the message would be that the primary purpose of the message is to advertise or promote a product or service. The FTC has suggested that such a consideration focus on the placement of commercial content in an e-mail message, the proportion of commercial content, and the use of color, graphics, type size, etc. to highlight commercial content.

As noted above, the focus of the above criteria is the recipient's interpretation of an e-mail, based on the recipient's net impression of the e-mail (i.e., whether it is commercial or not), not the sender's intent or any qualitative factors. Whether the proposed definition is adequately clear to avoid compromising protected speech is likely to be a significant concern.

Among the issues on which the FTC seeks comment are the impact of the FTC's proposed rule on consumers, businesses, and industry; the usefulness of the proposed criteria in determining the primary purpose; whether certain messages covered by the FTC's rule should not be deemed commercial (or vice-versa); and whether the FTC's approach considers appropriate factors. An issue of particular interest to non-profits is whether the three criteria proposed by the FTC should apply equally to messages sent by for-profit entities and those sent by non-profit entities, since the FTC rejected proposals that communications sent by non-profits should be exempt. In addition, the FTC seeks comment on whether electronically delivered content, such as a newsletter, should be deemed a transactional or relationship message, and how the inclusion of commercial information in such e-mails affects that analysis.


On August 12, 2004, the FCC released an Order adopting rules pertaining to commercial messages sent to mobile devices. The Order prohibits the transmission of commercial messages to "any address referencing an Internet domain name associated with wireless subscriber messaging services," and requires service providers to submit Internet domain names to the FCC for inclusion in a list that will be publicly available. "Affirmative consent" is required to send mobile service commercial messages (MSCMs). Although the FCC declined to require senders to obtain a subscriber's authorization in writing, it specified that pre-checked boxes at a website would not qualify.

The FCC's Order also distinguishes between the FCC's new rules implementing the CAN SPAM Act and FCC rules pertaining to messages sent to wireless devices under the Telephone Consumer Protection Act (TCPA). Specifically, the CAN SPAM Act prohibits any commercial e-mail messages sent to an address that references the Internet, but the Act does not apply to technologies that use other types of addresses or numbers to send messages to wireless devices, such as text messaging. By contrast, the TCPA prohibits calls to a wireless number made with an automatic telephone dialing system or artificial or prerecorded message, which includes text messaging calls.

As new rules governing telemarketing, faxing and electronic messages proliferate, the tension between the right of free speech and the right to be left alone is becoming more pronounced. The situation is complicated further by the global electronic environment, particularly with e-mail communications. Organizations seeking to use the electronic media to promote goods and services must remain aware of these changing rules.

For more information, please contact Sheila A. Millar at (202) 434-4143, or by e-mail at millar@khlaw.com, Vanessa R. Hamilton at (202) 434-4111, or by e-mail at hamilton@khlaw.com, or Tracy P. Marshall at (202) 434-4234, or by e-mail at marshall@khlaw.com.