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E-mail Shake-up or E-mail Shake-down?
 

New e-mail laws threaten to undermine reputable marketers.
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Imagine sending a routine e-mail marketing message to someone who has opted-in to your list. Only instead of landing a sale, it lands you in court--or jail.

In what I wish were only a scene from my imagination, new laws in two U.S. states, and similar ones currently being considered in seven others, make this scenario increasingly probable for reputable marketers, and threaten to undermine the most effective marketing channel ever for smaller businesses.

Last summer in a well-intentioned but erroneous effort to shield children from adult-oriented e-mail, Michigan and Utah enacted child protection laws establishing "do not contact" e-mail registries for children. Seven other states currently are considering similar legislation: Alaska, Georgia, Hawaii, Iowa, Mississippi, Ohio and Wisconsin.

The laws, which were written to sidestep federal law governing e-mail, prohibit e-mailers from sending messages to registered addresses containing information that is illegal for children to see or act on, such as advertising for pornography, alcohol, tobacco, firearms, gambling and illegal drugs and activities. Parents, guardians and schools can register their children's e-mail addresses and in some cases entire domains at no cost, and affected senders must pay a sizeable fee to "scrub" their lists monthly against each registry. Companies face substantial criminal and civil penalties if they send material to an e-mail address that has been in either state's registry for more than 30 days.

As the parent of youngsters I appreciate lawmakers' desire to help me to keep my kids safe from inappropriate e-mail. However, the laws themselves raise serious concerns. Besides their questionable validity under the 2003 CAN-SPAM Act, they won't make a dent in the volume of harmful spam sent to children. The shadowy, illicit spam rings responsible for the bulk of offensive e-mail will continue to send messages to kids and everyone else without regard for the law. Instead, the Michigan and Utah laws and others like them place an onerous burden on law-abiding companies. And last, and worst, they expose rather than protect children from online predators. How can something that sounds so good--Children's Protective Registry--be so bad?

Bad laws hurt good companies

Under the laws, companies that send adult-oriented content must "scrub" their subscriber lists monthly against each state's registry to prevent inappropriate messages from reaching e-mail addresses listed on the registries. Proponents dismiss the cost to marketers as nominal, but let's take a closer look.

Fees are charged on a per-name-checked basis--$7 per 1,000 in Michigan, and $5 per 1,000 in Utah. So a company with 100,000 e-mail addresses is paying $14,400 a year to compare its list against both registries. If other states currently weighing legislation pass similar laws, and charge $6 per 1,000 names (Georgia is considering $10), that figure jumps to $66,000. For 20 states, the company will pay more than $145,000, and for all 50 states, more than $360,000 a year in monthly list-scrubbing fees. That's just crazy.

And if you think you're safe because you don't send adult-oriented material, think again. The Michigan and Utah laws are so broadly and vaguely worded, that companies could find themselves in hot water in one state or the other over an array of promotions legally restricted to minors, such as automobiles, airline tickets, mortgages and R-rated DVDs, to name just a few. Although state officials say their laws aren't aimed at reputable marketers, both laws also allow individuals to sue e-mail senders. Plaintiff lawyers will have a field day going after the legitimate companies that the laws were never intended to affect. Multiply this growing morass by 10, 20 or more states, each with their own unique tweaks, and you begin to see the nightmare unfolding for marketers.

Well-meaning but bad for children

Although "do not e-mail" registries may seem like a good solution to spam, studies repeatedly have shown they don't work. Most notably, the Federal Trade Commission's 2004 comprehensive report to Congress, found that such registries in regard to children would be ineffective at best, and at worst could cripple the e-mail system or actually facilitate more spam to children.

The report also expressed "serious concerns" about the security and privacy risks inherent in any type of do-not-e-mail registry. It said any list that earmarked addresses as belong to or used by a child would raise "very grave" privacy concerns. "The possibility that such a list could fall into the hands of the Internets most dangerous users, including pedophiles, is truly chilling," it said.

What can you do?

The frustration over inappropriate spam is understandable. But enacting bad laws does more harm than good.

This January, Illinois state Rep. Jack Franks surprised e-mail marketers by shelving a bill that would have established a children's do-not-e-mail registry in his state. The previously staunch advocate of registries said, "We all have the same goal, and that's to protect our children, but we have to do it in such a way that's not going to endanger them."

Mr. Franks, who was quoted in a Jan. 31 news story by online Direct Magazine, also said an avalanche of calls from the E-mail Sender & Provider Coalition and e-mail marketers convinced him that his bill was fatally flawed. "They made good points," he said. "I'm not trying to put anybody out of business."

As these laws face mounting opposition and legal challenge by a wide array of advertising, e-mail, consumer advocacy and online privacy groups, I encourage you to learn more, and to contact your legislators. Urge them to make the right choice--for children as well as marketers.

Last updated: Mar 1, 2006




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