Don’t Pin Enforcement Hopes on FTC

This is the last in a series of columns on spam.

How will the new federal CAN-SPAM law be enforced? The law has all kinds of penalties, including the prospect of jail time for spammers. The government has to catch the spammers and make its case, but the law may make that easier to do.

I would hate to be a spammer facing a criminal charge with a jury of computer users deciding my fate. I envision the jury asking the judge whether the death penalty is available. Nevertheless, I doubt the Justice Department will drop terrorism and drug trafficking cases in order to prosecute many spammers.

Much of the civil enforcement will come from state attorneys general or the Federal Trade Commission. The states may be more aggressive because many attorneys general are political creatures, and going after spammers appeals to voters. We already see this happening. The FTC isn’t immune to politics, but commissioners are appointed rather than elected, and they cater to a different constituency.

What can we expect from the FTC on the civil side? My guess is not much, other than a few early high-profile cases designed to get press attention. Why won’t the FTC be effective? Let’s look at the record.

Most spam already violates existing federal law prohibiting unfair or deceptive trade practices. The FTC enforces this law. So why do we need a new law? The main reason is that Congress wanted to have an anti-spam trophy law to show voters. Another reason is that the FTC has been too lazy to bring many cases against spammers. Going after spammers is hard work. A law that simplifies prosecution will ease the burden. That’s the argument, anyway.

I doubt the new law will make much of a difference. The FTC’s record as a protector of consumer interests is poor. The same day that the CAN-SPAM Act cleared Congress, the FTC issued a press release and staff report on deception in weight-loss advertising. The report is the second from the commission documenting widespread deceptive weight-loss advertising. The FTC reached this conclusion despite what it called “unprecedented levels of FTC law enforcement and substantial consumer education efforts.”

The level of enforcement by the FTC may be unprecedented for that agency, but it is clearly inadequate to meet the needs of and to protect consumers. The commission basically admitted that it cannot effectively enforce the law against deceptive weight-loss advertising. Its response was to ask newspapers, magazines and television to reject advertising with false claims. The FTC originally made noise about suing broadcasters and publishers for running ads for fraudulent weight-loss products. However, it backed off that ill-considered, shoot-the-messenger approach and asked for self-policing.

The FTC’s action on weight-loss advertising is pathetic. The commission cannot carry out its responsibilities in this area, and it is reduced to begging others to do its work. If we looked closely at any other area where the FTC has jurisdiction over consumer matters – funeral home operations, credit repair, mail fraud or work-at-home schemes, to name a few – we probably would find the same pattern of FTC ineffectiveness and indifference.

The FTC accomplishes little to prevent or discourage most unfair or deceptive trade practices. It is more effective at getting press attention for itself. The agency argues that the few cases it brings serve as a deterrent against others, but that is a cover story. The record on weight-loss advertising makes the case that the FTC can’t or won’t do its job.

Can anyone believe that the FTC will be more successful against spammers than it has been against known and identifiable weight-loss advertisers? Fraudsters in many areas are willing to take the risk that they will be selected for prosecution. Even when the FTC undertakes an investigation, the result is often a consent decree that dings the target with a small fine and a promise to sin no more. The odds favor fraudsters and spammers, especially when there are a lot of them.

What’s missing from the enforcement side of the new law? The law does not allow private civil lawsuits for the most part. If a computer user receives a commercial e-mail message, opts out, and subsequently gets another message from the same sender, the user has no real remedy. She can complain to the FTC, but the chances of getting a meaningful reaction are about the same as winning the lottery.

Why no private right of action? The Republicans who control Congress hate trial lawyers because the lawyers give political contributions almost exclusively to the Democrats. Private rights of action to enforce laws are out of favor on Capitol Hill these days, and class actions are anathema.

The result is that even legitimate companies probably can get away with ignoring some obligations of the CAN-SPAM Act as long as they don’t flaunt their intention to disobey. Here’s an example: When you send commercial e-mail with an opt out, see to it that the mailbox for opt outs is small or full before the campaign begins. When people opt out, their messages will bounce, but they probably will not have the interest to keep pursuing the opt out.

If the FTC comes sniffing around in a year or two, apologize, plead incompetence and promise to clean up your act. The commission likely will let you off the hook cheap. Just don’t circle this paragraph and leave a copy in your files.

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