DMA SUBMITS COMMENTS TO FTC ON DO-NOT-E-MAIL LIST PROPOSAL

NEW YORK, March 31, 2004 – The Direct Marketing Association (The DMA) today submitted comments to the Federal Trade Commission (FTC) regarding a potential National Do Not E-mail Registry, a proposal the FTC is required to study by direction of the CAN SPAM Act of 2003. Many of The DMA’s comments are based on data from a newly released Association white paper, entitled "Preserving the Promise of the E-mail Marketplace: An Economic Assessment of the Proposed Federal Do-Not-E-mail Registry."

The DMA believes that a no e-mail registry will do absolutely nothing to reduce spam in consumers’ inboxes while impeding the growth of legitimate e-commerce. Spammers already violate multiple federal and state-level anti-spam and fraud statutes, so it would be naïve to think that they would obey a new do-not-e-mail list.

"Only one thing is for certain," said H. Robert Wientzen, president & CEO, The DMA. "If the FTC is forced to create a do-not-e-mail list, it will not be a do-not-spam list."

The DMA’s comments to the FTC note that, while the Association supported the CAN SPAM Act, it strongly opposes the creation of a do-not-e-mail registry. "The DMA believes that a do-not-e-mail registry will not reduce spam while limiting the use of electronic mail for legitimate marketing purposes." Moreover, it would "create significant privacy and security risks for consumers while at the same time creating unrealistic [consumer] expectations that by signing onto the registry consumers will not receive spam."

The DMA’s comments explain that, "spammers will not comply with a do-not-e-mail registry… ISPs have indicated that, in their [own] spam fighting efforts, spam that reaches their customers inboxes, [thus evading] ISP spam filters and spam-fighting techniques, in most cases is in violation of the CAN SPAM Act and other laws."

Moreover, in a nationwide poll of over 1,000 American adults commissioned by The DMA and the subject of the new white paper, the majority of respondents said they would not support the creation of a registry that is ineffective against pornographic and/or fraudulent spam.

Referring to The DMA’s white paper, the comments explain that a significant portion of the $33 billion in sales from November 2002 – November 2003 that resulted from e-mail could be eliminated by the creation of a registry. Additionally, an individual may place their e-mail address on the registry thinking it would reduce spam and not realize that they would no longer receive offers they have become accustomed to and take advantage of such things as discounts from booksellers or airlines. These and the many similar examples will result in a reduction of billions of dollars of annual sales.

Today’s economic assessment by The DMA indicates that a do-not-e-mail registry would increase costs for marketers by about $5.7 billion – and approximately $12.6 billion will be lost to the entire U.S. economy as a result of such a no-e-mail registry. Approximately $6.9 billion in savings enjoyed by consumers would disappear.

The DMA further noted that legitimate small businesses will be disproportionately injured by a do-not-e-mail list, with net revenue loses of approximately $3.9 billion, more than twice that of larger, well-established companies. Significantly, e-mail marketing drove over $8 billion in small business sales between November 2002 – November 2003, representing nearly one-quarter of all e-mail driven sales in the U.S.

The DMA also commented on the specific types of registries currently under consideration by the FTC. These potential approaches are: a database of registered e-mail addresses, a domain-wide registry, and an e-mail forwarding system. "Any of the versions of the e-mail registry that the Commission is considering would be ineffective in combating spam," The DMA told the FTC.

Meanwhile, each of these approaches would create new sets of challenges and risks. For example, The DMA pointed out that under the database approach, the list would become an irresistible target for hackers, and "spammers would attempt to obtain the list and use it as a source of e-mail addresses to which to send spam." Also, The DMA said, "the list would forever grow in size as there would be no reliable means of determining whether an e-mail account is no longer operable…. On average the annual rate for e-mail address turnover is 32 percent."

"A do-not-e-mail list will not address the source of the problem and will impose significant and unnecessary costs on legitimate senders of commercial e-mail," said Wientzen. "The DMA remains committed to constructively work with all government and private entities to craft and effect appropriate remedies to the spam crisis."

To view The DMA’s comments in their entirety, please visit:

http://www.the-dma.org/cgi/disppressrelease?article=562

The DMA’s white paper on the list will be available online on Thursday April 1, 2004 at 11AM EST.

The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned economic-impact study, direct and interactive marketing sales in the United States are projected to have surpassed $1.7 trillion in 2003, including $133 billion in catalog sales and $41 billion in sales generated by the Internet. The DMA's Web site is www.the-dma.org, and its consumer Web site is www.shopthenet.org.

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