Email Marketing: Are You Liable For Your Affiliates' CAN-SPAM Violations?

How you build and use your email list involves the federal CAN-SPAM Act of 2003 (CAN-SPAM). CAN-SPAM applies to essentially all businesses in the United States which send commercial email, which is defined as any email message "the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose)".

Nearly any business email is covered by CAN-SPAM, including email newsletters as well as standalone promotional emails.CAN-SPAM's Regulatory Impact

Specifically, CAN-SPAM prohibits:

* false and misleading header information - your email "From," "To," and routing information - including the originating domain name and email address - must be accurate and identify the person who initiated the email; and

* deceptive subject lines - your subject line cannot mislead the recipient about the contents or subject matter of the message.

In addition to the foregoing prohibitions, CAN-SPAM imposes these requirements:

* a functioning email unsubscribe system or reply address that operates for at least 30 days after the last emailing; and

* a system for obtaining "prior affirmative assent" from the email recipient if your client desires not to include in each email the client's postal address and a clear indication that the email includes a solicitation.

The consequences of non-compliance are severe. CAN-SPAM permits damages up to $2 million for violators, and a U.S. District Court may treble the damages to $6 million. Deceptive commercial email also is subject to laws banning false or misleading advertising.

Are You Liable For Your Affiliate's Spamming Activities?

One issue that will receive attention in the near future regarding CAN-SPAM is when is an advertiser liable for the spamming activities of its downstream affiliates? In other words, while you might not send email in violation of CAN- SPAM yourself, you may engage affiliates who do. Will you be liable for your affiliates' spamming activities?

The text of CAN-SPAM plainly contemplates a situation where one entity or person either pays for or otherwise induces another on their behalf to send email in violation of CAN-SPAM. In such a case, the result would be a joint violation of CAN-SPAM. So, you could be held liable for the spamming activities of your affiliates.

In order for you to be held liable for the spamming activities of your affiliates, it would seem to depend significantly on facts indicating your knowledge and control of your affiliates' actions.

If you market through affiliate programs, be aware of this potential liability, and keep a close watch on the legal developments in this area.

Conclusion

In summary, the easiest way to stay in compliance with CAN-SPAM is to be mindful of CAN-SPAM's rules and to outsource your commercial email to an online service that exclusively uses double opt-in email lists and otherwise strictly complies with the law. In addition, monitor your affiliates carefully, make it clear that you require strict CAN-SPAM compliance, and terminate the ones that do not comply.

Chip Cooper is a leading intellectual property, software, and Internet attorney who advises software and ecommerce businesses nationwide. Chip's easy and affordable online contract drafting service coordinates website contracts such as Terms of Use, Privacy Policy, Subscription, Membership, and SaaS agreements. Visit Chip's http://www.digicontracts.com/ site and download his FREE report, "12 Sure-Fire Ways Your Website Can Get You Sued".