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What does the CAN SPAM ACT OF 2003 mean for Affiliate Marketing?

As of the date of this writing, Congress is close to passing the CAN SPAM Act. We, at LinkShare, view this as a positive development. It clearly outlaws and prohibits the kinds of offenses that are commonly committed by spammers, offenses that have threatened to destroy what is and can be a legitimate and powerful marketing tool when used responsibly and properly. At the same time, by preempting and overriding the nearly forty state laws that have been enacted or are currently pending, the CAN SPAM Act provides the foundation for the establishment of a national standard, which we believe is the only practical way to address a marketing channel which traverses the Worldwide Web.

Many of Affiliates have asked us about how this new CAN SPAM Act, if passed, might affect the way they conduct their affiliate marketing activities and approach their merchant engagements in the LinkShare Network. We hope the following will answer your questions or provide some inside on how to think about the Act, assuming it will be passed, within the affiliate marketing context.

Summary of Major Provisions

Under the CAN SPAM ACT:

 Commercial email, if practiced properly, can continue to be used as a mainstream marketing channel. The CAN SPAM Act will preempt and override the nearly 40 state laws that currently exist or are pending on unsolicited commercial email, including the recently-passed California law.

 Many of the practices commonly employed by the more egregious and offending email spammers are outlawed:

o Commercial emails are required to be labeled as such (though, please note that no uniform standard is prescribed).

o Commercial emails must include an "opt out" link and must also include the postal address of the sender. Once a recipient opts out, the sender and any person initiating emails on the sender's behalf cannot contact the recipient (unless, of course, he or she opts back in).

o Commercial emails, including header information, cannot be deceptive or misleading.

 The FTC, any state attorney general or internet service provider is authorized to bring action under the Act. There is no private right of action, such as class actions by consumer groups or other individuals, permitted. Under some parts of the Act, only the FTC may bring action.

 The FTC is authorized to study and, only if it determines to do so, to establish and enforce a "do not email" registry, similar to the highly publicized "do not call" registry. Please note that the FTC is not required to establish a "do not email" registry.



Differences between the CAN SPAM Act and the California Law

We have received many inquiries from Merchants and Affiliates about how the CAN SPAM Act differs from the recently passed California anti-spam law (SB 186 or the so-called "Murray" bill). As noted above, the CAN SPAM Act, if passed, will preempt and override the California law. Here are some of the key differences between the California law and the CAN SPAM Act:

Difference California SB 186 CAN SPAM Act

Scope Applies to (a) emailers and businesses advertised in any commercial email sent to email addresses of residents or persons located within California and (b) businesses doing business in California. Applies to all emails sent to the United States. If passed, the federal law would, for the most part, override the California law and create a national standard.


Start Date January 1, 2004, if not preempted by the federal law. January 1, 2004. Will override the California law's prohibition on sending unsolicited commercial email and create a national standard.


Prohibition Prohibits all commercial emails unless the marketer has a pre-existing business relationship or the recipient has directly consented to receiving such email. It is a strict standard. No prohibition. As long as the person initiating the commercial email complies with the labeling requirements, the email is not deceptive or misleading and contains an unsubscribe link and postal address information, then no liability. Arguably, marketers may send as many commercial emails as they wants, until recipient elects to unsubscribe.


Opt Out May require both an unsubscribe link and an 800 telephone opt out line. Requires an email address to "unsubscribe."

Right to sue Permits both government enforcement and private right of action. In other words, individual recipients may sue senders and advertisers directly, potentially opening the door for class action law suits. Individual recipients have no right to sue. Under the federal law, only the FTC, a State Attorney General or an Internet service provider may bring action against the alleged violator. In certain cases, only the FTC has the right to bring action.

Affiliate Marketing Imposed burdensome requirements and potential liability for Merchants working with Affiliates that engage in email marketing. The Merchant would either have to make sure that no recipient of commercial email containing its advertising resides or is physically located in California or would need to get direct consent from or be able to verify a prior business relationship with the recipient. Does not prevent Merchants from working with Affiliates that engage in email marketing, but the Merchants should still take reasonable steps to ensure that such Affiliates are not permitted to send email that would violate the requirements of the Act (such as being deceptive or misleading or not having an opt-out methodology).


The Impact of the CAN SPAM Act on You

In the affiliate marketing context, Affiliates act as a merchant's virtual sale force. As such, you are provided with access to a Merchant's qualifying links for those Merchant programs you have joined, and you may want to market such qualifying links via commercial email to your users and/or members. The CAN SPAM Act imposes many new requirements on you should you employ commercial email in the way your participate as a LinkShare Affiliate.

First, it should be noted that both LinkShare and the Merchants whose programs you have joined fully expect that you will at all times comply with all applicable laws. This includes not just the CAN SPAM Act and any other federal, state or local law that may apply to your activities, but it also includes being in compliance at all times with LinkShare's Affiliate Membership Agreement and Network Operating Policies and Procedures as well as each Merchant's terms and conditions that govern your participation in its affiliate program.

LinkShare will be amending the Affiliate Membership Agreement and many Merchants are amending the terms and conditions of their engagements to take into account these recent legislative developments. Please keep on the look out for notices and postings. You will be expected to comply fully with all such amended terms and conditions.

Further, we highly recommend that, if you currently promote or plan to promote Merchant offerings through commercial email campaign, you also do following:

 Consult with legal counsel to understand how the CAN SPAM Act will impact that your ability to send commercial email, especially those containing Merchant links.

 Review all of your email lists and, if possible, get express consent from each of the individual email accounts on those lists. Merchants, LinkShare and your end users would all appreciate your diligence in making this a part of your standard business practice.

 When sending any commercial email, take steps to label and identify the email properly.

 When sending any commercial email, make sure that the source of the email is clear to the recipient. In other words, don't send any commercial email that contains false header information or other false or misleading data. The CAN SPAM Act takes an extremely harsh view of commercial email designed to deceive or mislead recipients.

 Include a link or email address that will permit any recipient to "opt-out" of any future communications. Of course, having an opt-out email address is a minimum. Anything additional that an affiliate can do to make it easier for a recipient to opt-out would be beneficial.

 Once a recipient opts out, you must refrain from sending that recipient any additional commercial email. You may be required to provide such opt-out requests to your Merchant partners.

 Include a physical postal address in each commercial email.

 Communicate with your Merchants. This includes:

 Letting them know that you are engaged in email marketing.

 Carefully reviewing the terms of their engagements and complying with those terms.

 Providing them with current opt-out information, as Merchant may also want to include the email address of a recipient that opted out of your commercial email communications on their own internal "do not email" list.

Conclusion

We hope that this summary provides you with some initial answers and guidance as to how you might think about how the new CAN SPAM Act, if it passes, might change or affect the way you approach your affiliate marketing program. We strongly recommend that you seek legal counsel to help you determine how the CAN SPAM Act might affect your business and affiliate marketing activities. Please feel free to contact your service representative if you have would like to discuss any thoughts with us.


LinkShare Corporation