FTC Reports to Congress on Effectiveness and Enforcement of CAN-SPAM Act

Posted by Ronald London

At year's end, the Federal Trade Commission issued a report to Congress required by the Controlling the Assault of Non-Solicited Pornography and Marketing Act (i.e., the "CAN-SPAM Act") to provide a detailed analysis of the Act's effectiveness and enforcement and the need, if any, for Congress to modify the Act. The report was based on a variety of FTC fact-gathering mechanisms. In addition to its own direct enforcement experience under the CAN-SPAM Act and that of other entities empowered to enforce it, FTC staff interviewed consumer groups, email marketers, Internet service providers ("ISPs"), and others, and used compulsory process powers to obtain data from 9 ISPs that collectively control over 60% of the market for consumer email accounts. In addition, the FTC stated that it considered "the views of the general public about the effectiveness of the Act" as voiced during CAN-SPAM rulemakings held by the agency, as well as a "broad review" conducted by agency staff of "articles published about CAN-SPAM since its passage." The FTC also consulted with "two preeminent computer scientists for their independent evaluations of the Act's effectiveness."

Ultimately, in "Effectiveness and Enforcement of the CAN-SPAM Act," the FTC concluded that the Act is effective in providing protection for consumers, and that it is aggressively enforced by state and federal regulators and by the private sector. The report noted that the FTC has brought 21 cases under the CAN-SPAM Act and another 62 that targeted spam before Congress adopted the Act. In reaching its conclusions, the report distinguished between spam sent by legitimate marketers promoting legitimate products or services, and that sent by "てutlaw' spammers who ignore the law, take great effort to hide their identities and whereabouts, and may well infect consumers' computers with malware." With respect to the former, the FTC found that legitimate marketers are following the "best practices" codified by the CAN-SPAM Act. Perhaps more importantly for the prospect of future regulation in this area, the FTC notes that technological advancements "may be the most useful tool in combating outlaw spammers."

The report found that the volume of spam has begun to level off and, more significantly, the amount reaching consumers has decreased due to enhanced anti-spam technology. The FTC also noted a significant decrease in the number of sexually-explicit spam messages, and that overall, consumers have begun to report decreased annoyance with spam. The FTC concludes, in short, that developments suggest spam has not destroyed email as a viable communications channel, as was once feared.

At the same time, however, the report noted that some aspects of the spam problem, such as its international dimension, have not changed materially since the CAN-SPAM Act became law, and that they continue to pose problems. The email landscape also has changed in potentially troubling manners as well. The FTC cited the example that there has been a shift toward the inclusion in spam of content that is increasingly malicious, and it noted that spammers have sought to frustrate enforcement efforts by using increasingly complex multi-layered business arrangements and continuing to hide their identities by providing false information to domain name registrars.

The report accordingly went on to recommend three proposed steps that could improve the efficacy of the CAN-SPAM Act. First, while no changes to the CAN-SPAM Act itself were recommended, the FTC urged Congress to enact the "US SAFE WEB Act" to improve the FTC's ability to trace spammers who operate outside the U.S. Second, the FTC stated that it should continue education efforts to ensure consumers are aware of the various ways they can protect themselves from spam, spyware, and sexually-explicit material. Third, improvements should continue with respect to anti-spam technology, and in particular, tools that prevent spammers from operating anonymously, including domain-level authentication, and reputation and accreditation systems.

Shortly after the FTC issued its report, AOL released data on its own spam-fighting efforts. It noted that its filters blocked more than a half-trillion spam emails in 2005, slightly above that it blocked in 2004, with approximately 8 in 10 emails received at its gateway being blocked, and that the number of spam emails that AOL's subscribers reported worldwide has decreased by approximately 75% since 2003. AOL's findings also echoed the FTC's observation that sexually explicit spam has taken a downturn. It also reported that emails that use more sophisticated "back alley" tactics to deceive are beginning to replace more typical product promotions.

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