FTC: Consumer Privacy Comments Concerning Russ Smith--P954807
Secretary Consumer Privacy 1997 - Request to Participate, P954807 BACKGROUND Comments were initially filed on April 15, 1997. These reply comments are to respond to comments filed by other participants and to discuss further developments since the initial comments were filed. FTC ACTION There is great concern that the FTC will not take decisive action as a result of the Workshop and continue the process of gathering information on self-regulation. There is often discussion that the Internet is somehow different than the rest of the business world and self-regulation will somehow work differently in this medium. There is no basis for this line of thought. According to a story in MediaCentral at http://www.mediacentral.com/Magazines/DirectNewsline/Archive/1997051402.htmlChairman Pitofsky was quoted in his recent speech to the Direct Marketing Association: "Government regulation would be premature," and added, "We are not looking to legislative proposals or rule-making" in the area of Internet commerce. Hopefully, the FTC will be willing to stand up to the DMA and push for some reasonable action in the same fashion as they have done with other cases concerning mergers and the tobacco industry. Another issue is that the emphasis of the Workshop should be in subjects where the FTC has authority and expertise to initiate rules. An example where this runs into problems is the proposed junk e-mail bill by Senator Murkowski. This bill has a convoluted scheme of FTC and FCC involvement without identifying adequate enforcement mechanisms. This proposed bill and Congressman Chris Smith's proposed amendment to the Telephone Consumer Protection Act. My comments to Senator Murkowski are:
Another objection I have to the bill is the inclusion of ISP's in the enforcement process. In addition to placing an unnecessary burden on them, I believe that as 24 hour a day Internet connections ('nailed line') become ubiquitous ISP's will eventually no longer handle e-mail as a middleman as it will be downloaded directly to the users computer. I already have this type of e-mail in my home. Self-Regulation and Industry Groups The Direct Marketing Association continues to be extremely uncooperative. They have continued to refuse to supply a list of their members. The DMA submitted a report in their comments entitled Case Report From The Direct Marketing Association's Committee On Ethical Business Practice. This report simply ignores several complaints I filed with them. The report does not identify the members of the Committee or name the companies involved in the complaints. They also submitted comments to the National Information Infrastructure entitled Consumer Empowerment and the NII: Self-Regulation and Technology. This report claims the "peer review process is effective," that "most cases are resolved through cooperation with the Committee and its recommendations." They also indicate they have "enjoyed excellent cooperative relationships with consumer organizations." These statements are blatantly false. The fact is that the DMA is covering up valid complaints and in some cases they are providing assistance to telemarketers in violation of the Telemarketing Sales Rule by covering up these complaints. An e-mail sent from Sara Fitzgerald of the DMA (she was formerly with the Interactive Service Association) to me on May 14, 1997 highlights the problem:
The DMA and the ISA have clearly positioned themselves as an enemy to consumers and to any reasonable regulation. I was unable to identify any industry self-regulation procedures available to consumers. The Association of National Advertisers and the Promotion Marketing Association of America also would not release the list of members they represent. Neither organization would provide me with an information on the industry self-regulation procedures. The Interactive Service Association [http://www.isa.net/about/about.html] and the Association of Advertising Agencies [http://www.commercepark.com/aaaa/members/memhome.asp] do make their membership list available on the Internet. The junk e-mail is increasing rapidly. Due to a few postings in newsgroups my e-mail is about 75% to 80% junk e-mail. The vast majority are work-at-home (such as preparing resume writing), pyramid scams (send $5 to the person at the top of the list for a 'report'), long distance service, lists of e-mail addresses for sale, and a multi-level marketing scheme to get more people to buy more e-mail lists to sell the program of sending more e-mail...The e-mailers are also just starting to use overseas accounts more. However, these are easier to filter if that becomes a problem and the companies being represented by the junk mail are often in the US. One consumer complained about an overseas pornographic merchandise e-mail (that I also received) and the response from the administrator blaming the person who complained and stated that is what happens when they post in x-rated newsgroups. The consumer claims never to have posted in such a group. I can attest that my e-mail address was posted in a business related newsgroup. The posting consisted of a list of e-mail addresses culled from a junk-email discussion group. The post was forced to appear as if it came from a person that complains about junk e-mail. It, of course, resulted in numerous multi-level marketing schemes sent to my account. Hacker incidents are on the rise. CyberPromo has reported several hacking incidents and the identity of many of their customers was made available on the Internet. An attachment to a recent CyberPromo message read:
CyberPromo's, and several other junk e-mailer's, provider Apex Global Internet Services was also recently hacked [http://www.news.com/News/Item/0,4,9937,00.html] and they are offering a $25,000 reward for information [http:/www.agis.net/reward.htm]. They claim the FBI is assisting them with their investigation. While the FBI is dealing with AGIS they should also have the opportunity to investigate AGIS for assisting the various scam artists they are assisting. Several AGIS customers, including CyberPromo, formed a group called the Internet EMail Marketing Council [http://www.iemmc.org]. They claimed to follow a code of ethics [http://www.iemmc.orq/code.htm]. The group also put out a news release claiming they would be a 'watchdog' organization for bulk e-mail abuses. Within 48 hours of this code going info effect CyberPromo violated two of the stipulations by sending me a junk e-mail with forged header information from an 'unauthorized' server. This, and numerous other e-mails from CyberPromo's equipment, has been sent to my server after CyberPromo received notification via certified mail to stop sending junk e-mail to my entire domain. When I discussed the matter with Walt Rines, IEMMC spokesman and one of the problem junk e-mailers, he indicated that the agreement only includes the AGIS network so CyberPromo could send e-mail via other networks without violating the agreement. This contradicts the information at their web site. He also told me the complaint process was to bring the complaint in front of their members which includes, of course, CyberPromotions. I have filed a complaint about the incident and notified AGIS. Neither has yet responded. Of course, I could always a complaint with the DMA.... In another incident, the http://homearts.com (home of Good Housekeeping, Popular Mechanics, Country Living, Redbook and others) web site has been collecting information on web surfers. The questions range from income levels to the number of children under 12 After being contacted by me said they would changed plans to sell information about their visitors to their site. Initially the plans would have violated the DMA's marketing industry guidelines selling personal information collected at their web site during 'guestbook' registration and contests. No notice of the sale or chance to "opt-out" was provided with the survey ... in fact it said "Once we know who you are and what you like, we can better tailor our articles and programs to fit your interests." In the May 19th edition of Direct Marketing News the list was put up for sale by 21st century marketing [http://www.21stcm.com]. The ad states, "it's easy to see why these individuals feel comfortable stopping in - these are names they trust!" referring to the magazine names. A spokesperson for the Hearst Corporation contacted me and indicated: most data collection methods included an opt-out provision and the 'guestbook' registration would be updated to include an opt-out provision, Hearst would not sell any information where the opt-out provision was not included, and they agreed to provide a clear opt-out procedure at their web site for anyone deciding to opt-out at a later date. I was told the changes would be made right away but as of this date the promised changes have not been made. The DMA ethics council was contacted about this matter. The DMA has not responded. Respectfully Submitted, Russell Smith May 30,1997 Hand Delivered To: Secretary, Federal Trade Commission PROPOSED AMENDMENT TO THE TCPA BILL INTRODUCTION STATEMENT FOR THE RECORD REP. CHRISTOPHER H. SMITH MAY 21, 1997 BAN UNSOLICITED JUNK ELECTRONIC MAIL Today I am introducing the "Netizens Protection Act of 1997." My legislation is aimed at protecting the internet user from the unseemly practices of the junk e-mailer. The internet user, or "Netizen," is in a vulnerable position in this new medium and we in Congress can not stand by idly as law-abiding citizens have their privacy invaded on an almost regular basis. And no one should have to pay for any such intrusion. This is a bill that has moved, as Justin Newton of the Internet Service Providers' Consortium so succinctly stated, from the community to the legislature, not one that was produced by the legislature and then forced upon the community. We are empowering the consumer and the individual to take action against an egregious breach of consumer and individual rights. As increasing numbers of Americans go on line and become passengers on the information superhighway, consumers' rights must not be eroded, abridged or mitigated along the way. The Internet -- and e-mail -- are becoming part of our everyday lives. And no one -- from the consumer to the small business who runs servers -- should be forced to pay for unsolicited advertisements. This is not a question of curbing speech. I believe in the First Amendment as much as anyone else. However, the idea of shifting the financial burden of speech to an unwilling audience is one that needs to be addressed. From the "netizen" who may incur costs in the form of charges spent online reading and disposing of the messages (there are still millions of internet users who pay in increments of time spent online) to users who assume the costs of both accessing and storing mail they did not want, consumers should not be unwilling, and paying, recipients. Furthermore, junk e-mailers occupy time and space on an Internet Service Provider's (ISP) servers and forces the ISP to make technical improvements. The costs of these improvements are passed on to the consumer -- you and me. In effect, the consumer is paying to have their privacy breached and invaded. And no one remains unaffected by these intrusions. The business owner or ISP with their own server often unwittingly distributes unsolicited advertisements by acting as an exploder site or mail relay site. Not only is this trespassing on another person's "property," but it is an outright theft of another person's resources. Even more disturbing is the fact that a large portion of the unsolicited junk e-mail comes in the form of fraudulent get rich quick schemes, unproven medical remedies, and other unsavory solicitations. Let me reiterate that my legislation is targeted at unsolicited commercial e-mail. The paths of communications between friends and acquaintances and businesses and their customers remains wide open. As a matter of fact, this legislation still offers the opportunity for legitimate direct marketers to do business. Certainly, the traditional avenues of direct marketing which do not shift the burden of cost to the recipient, such as postal mail, remain unchanged; and individuals will have the right to "opt-in" and be reached by legitimate direct marketers via e-mail. And let us not forget that we will still be exposed to electronic billboard and banner advertising on the Internet. My legislation will make unsolicited advertisements unlawful by amending the Telephone Consumer Protection Act of 1991 which banned unsolicited junk faxes. The banning of junk e-mails is a natural extention of existing law. Based on a Ninth Circuit Court decision in _Destination Ventures v. FCC_ (1995), there is "substantial" government interest in protecting consumers from having to bear the costs of third-party advertising. In addition, the court also held that advertisers have no right to turn consumers into a "captive audience" that is "incapable of declining to receive a message." I believe I have crafted a bill -- although it is just the beginning of a process which includes hearings and committee work -- that is acceptable to most parties involved. It allows people to "opt-in" and receive unsolicited advertisements if they give their consent, but it does not put the onus on the individual to stop the unsolicited advertisers as an "opt-out" plan would do. Today, at a press conference, Ray Everett, a representative of the pro-consumer group Coalition Against Unsolicited Commercial E-mail, and Justin Newton, a representative from the probusiness Internet Service Providers' Consortium -- each coming at the issue from different sides -- both came to the same conclusion -- this legislation would be an effective way to put a stop to unsolicited advertisements. To amend the Communications Act of 1934 to ban the transmission of unsolicited advertisements by electronic mail, and to require that sender identification information be included with electronic mail messages. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the "Netizens Protection Act of 1997". SEC.2. PROHIBITION ON TRANSMISSION OF UNSOLICITED ADVERTISEMENTS BY ELECTRONIC MAIL. Section 227(b)(1) of the Communications Act of 1934 (47 U.S.C. 227 (b)(1)) is amended-- (1) by striking "or" at the end of subparagraph (C); (2) by redesignating subparagraph (D) as subparagraph (E); (3) by inserting after subparagraph (C) the following new subparagraph: "(D) to use any computer or other electronic device to send an unsolicited advertisement to an electronic mail address of an individual with whom such person lacks a preexisting and ongoing business or personal relationship, unless such individual provides express invitation or permission; or".SEC. 3. ELECTRONIC MAIL SENDER IDENTIFICATION INFORMATION REQUIRED Section 227(d)(1) of the Communications Act of 1934 (47 U.S.C. 227(d)(1)) is amended-- (1) by striking "or" at the end of subparagraph (A); (2) by striking the period at the end of subparagraph (B) and "; inserting and"; and (3) by inserting at the end the following new subparagraph: "(C) to use a computer or other electronic device to send an unsolicited advertisement to an electronic mail address unless such person clearly provides, at the beginning of such unsolicited advertisement, the date and time the message is sent, the identity of the business, other entity, or individual sending the message, and the return electronic mail address of such business, other entity, or individual." PROPOSED SENATE BILL Please note throughout S. 771, Commission refers to the Federal Trade Commission, not the Federal Communications Commission S. 771 Bill Text Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the "Unsolicited Commercial Electronic Mail Choice Act of 1997". SEC. 2. FINDINGS. Congress makes the following findings: (1) The Internet is a worldwide network of information that growing numbers of Americans use on a regular basis for educational and personal activities. (2) Electronic mail messages transmitted on the Internet constitute an increasing percentage of communications in the United States. (3) Solicited commercial electronic mail is a useful and cost-effective means for Americans to receive information about a business and its products. (4) The number of transmissions of unsolicited commercial electronic mail advertisements has grown exponentially over the past several years as the technology for creating and transmitting such advertisements in bulk has made the costs of distribution of such advertisements minimal. (5) Individuals have available no effective means of differentiating between unsolicited commercial electronic mail advertisements and other Internet communications. (6) The transmitters of unsolicited commercial electronic mail advertisements can easily move from State to State. (7) Individuals and businesses that receive unsolicited commercial electronic mail advertisements often pay for the costs of such receipt including the costs of Internet access and long distance telephone charges. (8) Unsolicited commercial electronic mail can be used to advertise legitimate services and goods but is also used for fraudulent and deceptive purposes in violation of Federal and State law. (9) Individuals and companies that use unsolicited commercial electronic mail for fraudulent and deceptive purposes often use fraudulent identification information in such electronic mail, making it impossible for a recipient to request to be removed from the mailing list or for law enforcement authorities to identify the sender. (10) The inability of recipients of unsolicited commercial electronic mail to identify the senders of such electronic mail or to prevent its receipt impedes the flow of commerce and communication on the Internet and threatens the integrity of commerce on the Internet. (11) Internet service providers are burdened by the cost of equipment necessary to process unsolicited commercial electronic mail. (12) To facilitate the development of commerce and communication on the Internet, unsolicited commercial electronic mail should be readily identifiable and filterable by individuals and Internet service providers. SEC. 3. REQUIREMENTS RELATING TO TRANSMISSIONS OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL. (a) Information on Advertisement (1) Requirement. Unless otherwise authorized pursuant to a provision of section 7, a person who transmits an electronic mail message as part of the transmission of unsolicited commercial electronic mail shall cause to appear in each electronic mail message transmitted as part of such transmission the information specified in paragraph (3). (2) Placement
(b) Routing Information. All Internet routing information contained within or accompanying an electronic mail message described in subsection (a) shall be valid according to the prevailing standards for Internet protocols. (c) Effective Date. The requirements in this section shall take effect 30 days after the date of enactment of this Act. SEC. 4. FEDERAL REGULATION OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL. (a) Transmissions. (1) In general. Upon notice from a person of the person's receipt of electronic mail in violation of a provision of section 3 or 7, the Commission
(2) Deadline. The Commission may not take action under paragraph (1)(B) with respect to a transmission of electronic mail more than 2 years after the date of the transmission. (b) Administration. (1) Notice by electronic means. The Commission shall establish an Internet web site with an electronic mail address for the receipt of notices under subsection (a). (2) Information on enforcement. The Commission shall make available through the Internet web site established under paragraph (2) information on the actions taken by the Commission under subsection (a)(1) (13). (3) Assistance of Federal Communications Commission. The Federal Communications Commission may assist the Commission in carrying out its duties this section. SEC. 5. ACTIONS BY STATES. (a) In General. Whenever an attorney general of any State has reason to believe that the interests of the residents of that State have been or are being threatened or adversely affected because any person is engaging in a pattern or practice of the transmission of electronic mail in violation of a provision of section 3 or 7, the State, as parens patriae, may bring a civil action on behalf of its residents to enjoin such transmission, to enforce compliance with the provision, to obtain damages or other compensation on behalf of its residents, or to obtain such further and other relief as the court considers appropriate. (b) Notice to Commission. (1) Notice. The State shall serve prior written notice of any civil action under this section upon the Commission and provide the Commission with a copy of its complaint, except that if it is not feasible for the State to provide such prior notice, the State shall serve written notice immediately upon instituting such action. (2) Rights of commission. Upon receiving a notice with respect to a civil action under paragraph (1), the Commission shall have the right
(c) Actions by Commission. Whenever a civil action has been instituted by or on behalf of the Commission for violation of a provision of section 3 or 7, no State may, during the pendency of such action, institute a civil action under this section against any defendant named in the complaint in such action for violation of any provision as alleged in the complaint. (d) Construction. For purposes of bringing a civil action under subsection(a), nothing in this section shall prevent an attorney general from exercising the powers conferred on the attorney general by the laws of the State concerned to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary or other evidence. (e) Venue; Service of Process. Any civil action brought under subsection (a)in a district court of the United States may be brought in the district in which the defendant is found, is an inhabitant, or transacts business or wherever venue is proper under section 1391 of title 28, United States Code. Process in such an action may be served in any district in which the defendant is an inhabitant or in which the defendant may be found. (f) Actions by Other State Officials. Nothing in this section may be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any civil or criminal statute of the State concerned. (g) Definition. In this section, the term "attorney general" means the chief legal officer of a State. SEC. 6. INTERNET SERVICE PROVIDERS. (a) Exemption for Certain Transmissions. The provisions of this Act shall not apply to a transmission of electronic mail by an interactive computer service provider unless the provider initiates the transmission. (b) Notice of Transmissions from Commission. Not later than 72 hours after receipt from the Commission of notice that its computer equipment may have been used by another person to initiate a transmission of electronic mail in violation of a provision of section 3 or 7, an interactive computer service provider shall
(c) Notice of Transmissions from Private Individuals. (1) In general. Subject to paragraph (2), not later than 14 days after receipt from a private person of notice that its computer equipment may have been used by another person to initiate a transmission of electronic mail in violation of a provision of section 3 or 7, an interactive computer service provider shall
(2) Minimum notice requirement. An interactive computer service provider shall transmit a notice under paragraph (1) with respect to a particular transmission of electronic mail only if the provider receives notice with respect to the transmission from more than 100 private persons. (d) Blocking Systems. (1) Requirement. Each interactive computer service provider shall make available to subscribers to such service a system permitting such subscribers, upon the affirmative electronic request of such subscribers, to block the receipt through such service of any electronic mail that contains the term"advertisement" in its subject line. (2) Notice of availability. Upon the applicability of this subsection to an interactive computer service provider, the provider shall
(3) Blocking by provider. An interactive computer service provider may, upon its own initiative, block the receipt through its service of any electronic mail that contains the term "advertisement" in its subject line. (4) Applicability. The requirements in paragraphs (1) and (2) shall apply
(e) Records. An interactive computer service provider shall retain records of any action taken on a notice received under this section for not less than 2 years after the date of receipt of the notice. (f) Construction. Nothing in this section may be construed to require an interactive computer service provider to transmit or otherwise deliver any electronic mail message containing the term "advertisement" in its subject line. (g) Definition. In this section, the term "interactive computer service provides" has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. 230(e)(2)). SEC. 7. RECEIPT OF TRANSMISSIONS BY PRIVATE PERSONS. (a) Termination of Transmissions. (1) Request. A person who receives a transmission of unsolicited commercial electronic mail not otherwise authorized under this section may request, by electronic mail to the same electronic mail address from which the transmission originated, the termination of transmissions of such mail by the person initiating the transmission. (2) Deadline. A person receiving a request for the termination of transmissions of electronic mail under this subsection shall cease initiating transmissions of electronic mail to the person submitting the request not later than 48 hours after receipt of the request. (b) Affirmative Authorization of Transmissions Without Information. (1) In general. Subject to paragraph (2), a person may authorize another person to initiate transmissions to the person of unsolicited commercial electronic mail without inclusion in such transmissions of the information required by section 3. (2) Termination.
(c) Constructive Authorization of Transmissions Without Information. (1) In general. Subject to paragraph (2), a person who secures a good or service from, or otherwise responds electronically to, an offer in a transmission of unsolicited commercial electronic mail shall be deemed to have authorized transmissions of such mail without inclusion of the information required under section 3 from the person who initiates the transmission providing the basis for such authorization. (2) Termination.
(d) Effective Date of Termination Requirements. Subsections (a), (b)(2), and(c)(2) shall take effect 30 days after the date of enactment of this Act. SEC. 8. ACTIONS BY PRIVATE PERSONS. (a) In General. Any person adversely affected by a violation of a provision of section 3 or 7, or an authorized person acting on such person's behalf, may, within 1 year after discovery of the violation, bring a civil action in a district court of the United States against a person who has violated the provision. Such an action may be brought to enjoin the violation, to enforce compliance with the provision, to obtain damages, or to obtain such further and other relief as the court considers appropriate. (b) Damages. (1) In general. The amount of damages in an action under this section for a violation specified in subsection (a) may not exceed $5,000 per violation. (2) Relationship to other damages. Damages awarded for a violation under this subsection are in addition to any other damages awardable for the violation under any other provision of law. (c) Cost and Fees. The court, in issuing any final order in any action brought under subsection (a), may award costs of suit and reasonable attorney fees and expert witness fees for the prevailing party. (d) Venue; Service of Process. Any civil action brought under subsection (a)in a district court of the United States may be brought in the district in which the defendant is found, is an inhabitant, or transacts business or wherever venue is proper under section 1391 of title 28, United States Code. Process in such an action may be served in any district in which the defendant is an inhabitant or in which the defendant may be found. SEC. 9. RELATION TO STATE LAWS. (a) State Law Applicable Unless Inconsistent. The provisions of this Act do not annul, alter, or affect the applicability to any person, or otherwise exempt from the applicability to any person, of the laws of any State with respect to the transmission of unsolicited commercial electronic, except to the extent that those laws are inconsistent with any provision of this Act, and then only to the extent of the inconsistency. (b) Requirement Relating to Determination of Inconsistency. The Commission may not determine that a State law is inconsistent with a provision of this Act if the Commission determines that such law places greater restrictions on the transmission of unsolicited commercial electronic mail than are provided for under such provision. SEC. 10. DEFINITIONS. In this Act: (1) Commercial electronic mail. The term " commercial electronic mail" means any electronic mail that
(2) Commission. The term "Commission" means the Federal Trade Commission. (3) State. The term "State" means any State of the United States, the District of Columbia, Puerto Rico, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, the Republic of Palau, and any possession of the United States. |