BILL ANALYSIS
SENATE COMMITTEE ON BILL NO: AB
1676
BUSINESS AND PROFESSIONS AUTHOR: Bowen
Senator Richard G. Polanco, Chairman As
Amended: 4/28/98
HEARING DATE: June 22, 1998 FISCAL: Yes
SUBJECT: Advertising: electronic mail (e-mail) - prohibiting
the transmission of unsolicited advertisements ("spam")
to consumers upon request.
DIGEST:
Existing law:
1. Regulates advertising and provides that any violation of
those provisions generally is a misdemeanor, as well as
subject to injunctive relief and civil penalties.
2.As part of that advertising law, specifically prohibits a
person conducting business in this state from faxing
unsolicited advertising material, unless certain conditions
are satisfied, including a toll-free telephone number
recipients may call to stop such unsolicited faxes ("opt out")
and notice thereof in the fax. Makes a failure to comply with
a recipient's request to stop unsolicited faxes an infraction
with up to a $500 fine for each and every fax transmission.
3. Does not require e-mail to be labeled to disclose its
content.
This bill would:
1.Expand the existing prohibition against unsolicited faxed
advertisements by amending it to include the transmission of
unsolicited advertising by electronic mail (e-mail).
2.Require the sender of the unsolicited e-mail advertisement, to
provide either a toll-free telephone or valid sender operated
return e-mail address that the recipient of the advertisement
may call or e-mail to notify the sender not to e-mail further
unsolicited documents (" opt-out " provision).
3. Require the unsolicited e-mail advertisements to contain a
statement , of specified size type, disclosing the toll-free
number or e-mail address which the recipient may notify to
stop further unsolicited e-mail advertisements.
4. Prohibit sending unsolicited e-mail ads to any recipient who
has notified the sender to stop further unsolicited e-mails.
5. Make it an infraction , punishable by a fine of up to $250,
for each and every transmission sent in violation of a
recipient's request to stop. (In doing so, the bill also
amends the current infraction penalty against junk faxes,
actually lowering the existing fine on prohibited faxes from
the current $500 to $250.)
6. Exclude from these prohibitions, a telecommunications utility
or Internet service provider which merely carries the
transmission over its network.
7. Require any unsolicited e-mail advertisements for the sale,
lease, rental, gift offer, or other disposition of property or
services, or the extension of credit - to include the acronym
label "ADV." in the first four characters of the e-mail's
subject line , and to include the acronym label "ADV.ADULT" in
the first eight characters of an e-mail's subject line when
the goods or services may only be viewed or purchased by
someone 18 years of age or older ( e-mail labeling
requirement ).
FISCAL EFFECT:
Unknown. This is a "fiscal" bill. According to the Assembly
Appropriations Committee (4/22/98), there would be no state
costs. The bill contains reimbursement disclaimer of any local
law enforcement costs due to its modification of provisions the
violation of which are crimes (misdemeanors).
COMMENTS:
1. Sponsorship and Purpose.
This bill is sponsored by its author to prevent unsolicited
e-mail advertisements by providing consumer recipients with
the right to "opt-out" of spam distribution lists, and
penalizing and fining spammers who do not provide consumers
with the specified means to opt-out or who fail to comply with
their requests to stop transmitting unsolicited
advertisements. It is modeled after the current prohibitions
against unsolicited junk fax advertisements and federal
telemarketing law that make it illegal for telemarketers to
make unsolicited calls to individuals who have requested not
to be called. The author's office notes that the bill
contains similar provisions to those being proposed currently
at the federal level.
2. Background.
Opponents of unsolicited mass e-mail advertisements argue that
Internet users face a daily onslaught of unsolicited e-mail
from Internet businesses advertising goods and services. The
practice of sending mass unsolicited e-mails, known as
"spamming," often imposes a significant time burden on
Internet users and often can slow down or completely disrupt
on-line service, and can be a costly and time consuming
nuisance for recipients who are a captive audience.
America OnLine, a major Internet Service Provider (ISP) has
reported that, on average, about 30 percent of the estimated
30 million e-mail messages transmitted on its network each day
are unsolicited commercial e-mail. Supporters of
anti-spamming legislation argue that the high volume of junk
e-mail places a tremendous burden on ISPs when they have to
process and store such high amounts of data. Spam opponents
note that simply deleting junk e-mail does not end the problem
for consumers or ISPs because there is no real cost to sending
mass e-mails. Rather, such junk e-mail shifts the majority of
advertising costs from the advertiser to the recipient
because individuals and their ISPs bear the costs in lost
time, damaged equipment, lost productivity, and lost business
opportunities.
3. Similar or Related Legislation This Session.
AB 1629 (Miller), also scheduled to be heard today by the
Business and Professions Committee, is another anti-spamming
bill this Session. That bill takes a different approach to
the junk e-mail problem by: (1) providing ISP's, whose
networks are used by spammers to transmit their e-mail ads, a
private civil action to recover damages from spammers who
violate legal prohibitions, and (2) criminalizing a spammer's
forged use of another person's Internet domain name (e-mail
name address which is used to transmit and receive e-mail).
AB 2640 (Bowen), currently in Assembly Judiciary Committee, is
another anti-spamming bill that would create additional civil
remedies recoverable by ISPs for unauthorized domain name
usage - allowing recovery of actual damages or an amount
determined as specified.
4. Arguments in Support.
The bill is supported by Consumer Action (CA), Californians
Against Waste (CAW) and the American Federation of State,
County and Municipal Employees (AFSCME). CA states that the
problem of spam has exploded in recent years and that without
the bill consumers will have no method to remove themselves
from spam e-mail lists. CA states that the Internet community
has done what they can to stop spam, that it is a losing
battle as there is no disincentive to deter commercial users
from sending unwanted e-mail. CA believes the bill's "opt-out
feature and a$250 fine is a good first step. CAW states that
the ability of advertisers to send unsolicited ads to millions
at the click of a button has brought "waste" to a whole new
level and that the bill's provisions would help curb spam and
ensure that e-mail is used only for legitimate purposes.
5. Arguments in Opposition and Requested amendment regarding
labeling.
The California Internet Industry Alliance (CIIA) has taken an
Oppose Unless Amended position on this bill. The CIIA agrees
with the author's purpose to curtail unsolicited e-mail
advertisements but questions the effectiveness of the bill's
approach to the problem, and opposes the provisions of the
bill that would require the subject line of unsolicited e-mail
advertising to include acronym labels related to content
("ADV." and "ADV. ADULT"). The CIIA will remove its
opposition if the bill is amended to remove that subject line
labeling requirement.
The CIIA argues that "labeling" of e-mail in that manner has
never been tried; would be very damaging to Internet users,
would be misunderstood by foreign Internet users, would
conflict with labeling requirements that other states may
impose, and is impracticable to enforce given the global
nature of Internet use.
Other opponents of the bill argue that it's opt-out feature
essentially condones unsolicited e-mail by permitting it
unless and until a recipient attempts to opt-out. They
further argue that given the unscrupulous nature of spammers,
their use of forged e-mail return addresses, the constant
mobility and anonymous nature of the sender, and various means
to avoid providing a valid address/toll-free number - the
bill's remedies will be unworkable, ineffective and burdensome
to consumers.
6. Requested Amendment regarding criminal penalty.
The California District Attorneys Association (CDAA) has taken a
support if amended position on this bill. The CDAA believes
criminalizing unsolicited e-mail ads is a good idea but believes
the bill's penalty for failing to stop transmitting unsolicited
e-mail after requested to do so by a recipient should be changed
from an infraction to a misdemeanor (page 3, line 12 of the
bill), so it will be consistent with the misdemeanor penalty
applicable to the other prohibitions in the bill (in proposed
B&P 17538.4 (a) and (b)) at pages 1-2 of the bill.
As noted previously, the California Internet Industry Alliance
(CIIA) is seeking an amendment to remove the bill's proposed
subject labeling acronym requirement as imposing an unreasonable
and unworkable burden on both Internet service providers and all
legitimate e-mail users.
7. Policy Questions.
Given the two anti-spamming bills before the B&P Committee
today, will either be effective? Which is less costly? Will
either create too much intrusion by government into the Internet
marketplace? Will either place too much control in the hands of
those who control access to the Internet? Should both bills be
enacted given they are both addressing the same problem?
The global nature of the Internet, the difficulty in
identifying/ tracking down unscrupulous spammers, the low level
nature of the criminal penalty, and the potential burden of
using the "opt-out" feature raise questions regarding the
effectiveness of this bill's provisions to curtail unscrupulous
spammers. As has been the case with junk faxes and
telemarketing, it seems that federal legislation with nationwide
application may prove more effective - though given the state of
telemarketing scam complaints, even that level of action may be
relatively ineffective.
Another alternative before the B&P Committee, SB 1629, is
supported by Internet industry service providers because it
makes it more economically feasible for them to sue spammers in
court. However, SB 1629 is opposed by the American Civil
Liberties Union (ACLU), which believes that bill unreasonably
burdens protected commercial speech and believes the "opt-out"
approach (contained in this bill) accomplishes the same goals in
a less burdensome manner.
8. Assembly Votes.
Assembly Consumer Protection Committee: 13 - 0
(3/17/98)
Assembly Appropriations Committee: 12 - 7
(4/22/98)
Assembly Floor: 62 - 13
(5/18/98)
SUPPORT AND OPPOSITION:
Support: Consumer Action
Californians Against Waste
American Federation of State, County and Municipal
Employees (AFSCME)
California Alliance for Consumer Protection
The Adult Entertainment Industry Education Fund
(AEIEF)
Your ALERT (Adult Liberties & Erotic Rights are
Threatened)
California Adult Webmasters Association
Support if Amended: California District Attorneys Association
(CDAA)
Oppose unless Amended: California Internet Industry Alliance
(CIIA)
Opposition: Dr. Robert Jacobson
Dan Zerkle
Consultant: Jay J. DeFuria