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Court Rules that the CAN-SPAM Act Applies to Facebook Broadens Definition of
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In a unique case of first impression,
a federal court ruled that the transmission of Facebook pages bearing
materially false or materially misleading advertising to Facebook contacts
constituted an electronic mail message in violation of the Controlling the
Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM
Act”). The court’s expansive definition of what represents an
electronic mail message raises significant issues for communications and
media companies that use Facebook and other social media platforms for
advertising and other promotional purposes. This ruling came in review
of a motion to dismiss filed by MaxBounty, Inc. in its dispute with Facebook.
Facebook, Inc. v. MaxBounty, Inc. (Case No. CV-10-4712-JF, N.D.
Cal., March 28, 2011). Ordinarily, there is no private right of action
for violations under the CAN-SPAM Act; however, the Act excludes Internet
Service Providers (“ISP”) from such prohibitions. Facebook is an ISP
and can bring lawsuits to protect its network and operations. MaxBounty
is an advertising and marketing company that uses a network of online
publishers to drive traffic to websites of third party advertisers. In
its complaint, Facebook alleged that MaxBounty used a network of affiliates
to create numerous “fake” Facebook pages that displayed a commercial message
urging users to take advantage of a “limited time offer” to receive gift
cards or other merchandise. Interested users then began a registration
process that required them to become a “fan” of the page, invite all of the
users’ Facebook friends to join the page, and complete additional
registration requirements. At the end of this process, users were
directed to a website managed by MaxBounty, which in turn redirected them to
a third party commercial website. Facebook argued that the
creation of these “fake” Facebook pages, and their subsequent distribution to
a user’s “wall,” “news feed,” the home page of a user’s friends, or a
Facebook inbox or external email address, constituted delivery of an
electronic mail message. The CAN-SPAM Act defines an “electronic mail
message” as a “destination commonly expressed as a string of characters,
consisting of a unique user name or mailbox and a reference to an Internet
domain name (commonly referred to as a “domain part”), whether or not
displayed, to which an electronic mail message can be sent or
delivered.” MaxBounty argued that this definition applied solely to
traditional email messages – i.e., messages sent directly to a user’s
electronic mail box – and that, as a consequence, MaxBounty’s
actions did not violate the CAN-SPAM Act. The court disagreed.
In particular, the court noted that users were instructed to “effect
transmission” of the Facebook pages at issue to all of their Facebook
friends. These transmissions, wrote the court, “required at least some
routing activity on [the] part of Facebook,” and “any routing necessarily
implicates issues regarding volume and traffic utilization of infrastructure
issues which CAN-SPAM seeks to address.” The court concluded that the
communications involving the transmission of the Facebook pages was an
“electronic message” for purposes of the CAN-SPAM Act and MaxBounty’s
motion to dismiss the CAN-SPAM Act claim was denied. Although the substantive
case is still pending, the court’s decision to interpret broadly the
definition of an “electronic mail message” means that any company that uses a
social media platform to promote itself must closely monitor its advertising
and marketing practices, as well as the practices of the online advertisers
it works with, to ensure that neither violates the CAN-SPAM Act by
transmitting a commercial or transaction/relationship electronic mail message
that contains, or is accompanied by, header information that is materially
false or materially misleading. It is not clear whether other CAN-SPAM
Act requirements, including requirements for electronic mail sent to a
mobile device, extend to all parts of a social networking platform, or if it does, how those requirements would be implemented.
For example, the CAN-SPAM Act requires that every commercial electronic
message disclose that it is an advertising message and include a functioning
opt-out mechanism. However, implementing such disclosures and opt-out
mechanisms in other social networking platform areas may be problematic
except for messages transmitted to a Facebook inbox or external email
address. Therefore, all companies need to assess carefully the ways in
which they utilize social media platforms to avoid liability under the
CAN-SPAM Act or other related statutes. If you have any questions
or concerns about this case, compliance with the CAN-SPAM Act generally, or
compliance with Facebook’s promotional and platform policies, which were
recently revised, please do not hesitate to contact S. Jenell Trigg (strigg@lermansenter.com) or Louis
J. Levy (llevy@lermansenter.com). June 8, 2011 |
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This memorandum is intended only as a general discussion of these issues and should not be regarded as legal advice. We would be pleased to provide additional details or advice about specific situations if desired. Copyright © 2011, Lerman Senter PLLC 2000 K Street NW,
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