DMA Concerned by Court Ruling on Children s E-mail Registries

Washington, DC, March 27, 2007 — The Direct Marketing Association (DMA) today expressed concern that a ruling issued last Friday by the US District Court could undermine the national standard set forth the “CAN-SPAM Act,” the Federal law regulating commercial e-mail.

On March 23, a Utah judge refused to grant an injunction that would have shut down the operation of that state's Child Protection Registry. The Utah law passed last year creates a voluntary registry for e-mail addresses and domains used by children. The law prohibits sending an e-mail advertisement (or link to an online advertisement) to contacts on the registry when a minor would be prohibited by law from purchasing the advertised product or service. The intent of the law was to keep children from receiving inappropriate advertisements for products such as tobacco, alcohol, pornography or firearms.

DMA has long expressed serious reservations about the constitutionality, safety, and workability of state e-mail registries. DMA fully supports efforts to protect children from harmful or inappropriate online content, but believes that the Utah law and similar laws passed in Michigan and considered in other states take the wrong approach.

DMA shares the concerns of the Federal Trade Commission (FTC) that a list of children's e-mail addresses collected in such a registry may pose a threat to children. FTC staff expressed this concern last year in a letter to legislators in Illinois considering an identical law, stating that such registries could actually put children at risk by creating a list of children’s e-mail addresses that would be a tempting target for hackers and online predators.

This Utah law, if ultimately upheld, also threatens a uniform national standard for regulation of commercial e-mail. In particular, DMA is concerned that the court’s ruling, if interpreted broadly, could undermine the clear national standard enacted in the CAN-SPAM Act and seriously interrupt the flow of online commerce. Numerous differing laws regulating e-mail at the state level could make it impossible to send e-mail where the sender does not know the off-line location of the recipient.

DMA supported the CAN-SPAM Act, which created a national standard for e-mail communications. The Act preempted state laws, with exemptions granted only in the case of trespass, contract or tort law, or where state laws are aimed at combating fraud or computer crime.

“If interpreted broadly, this ruling could undermine the preemption of state laws written into the CAN-SPAM Act,” said Jerry Cerasale, DMA’s senior vice president for government affairs. “Without a clear national standard, marketers would quickly become subject to a patchwork of confusing and conflicting state laws that would make compliance next to impossible and, in the long run, ill-serve consumers.”

Cerasale pointed out that companies in compliance with CAN-SPAM already offer a simple, clear way to unsubscribe from receiving e-mails. He also noted that the vast majority of inappropriate and illegal e-mails come from spammers operating outside US borders and beyond the reach of Federal or state laws.

“Discarding the tenet of national preemption in this case sets us on a slippery slope that could ultimately undermine the intent and effectiveness of CAN-SPAM protections,” added Cerasale. “It would make it difficult for legitimate American companies to do business while doing nothing to stop the vast majority of inappropriate and fraudulent e-mails that appear in the mailboxes of children and adults alike.”

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About DMA

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents more than 3,600 companies from dozens of vertical industries in the US and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations.

In 2006, marketers — commercial and nonprofit — spent $166.5 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated $1.93 trillion in incremental sales. Last year, direct marketing accounted for 10.3 percent of total US GDP. Also, there are today 1.7 million direct marketing employees in the US alone. Their collective sales efforts directly support 8.8 million other jobs. That accounts for 10.5 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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