Hardwood Floors February/March 2019

LEGAL BUSINESS BEST PRACTICES

DON’T GET IN A SPAM: Marketing Considerations Related to the CAN-SPAM Act

The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, better known as the CAN-SPAMAct of 2003 (the Act), was created due to an increase in the amount of unsolicited commercial emails sent to all types of individuals and businesses. Many of these emails could have an abusive reason for being sent, such as extracting personal information about the email recipient. Fifteen years later, many are still unsure of the Act’s requirements. So here’s an update on how you can market your business without running afoul of the Act. Does your commercial communication have to comply with the Act? Certain email messages are not subject to the Act, such as a “transactional or relationship message” (transactional message). The Act defines a transactional message as any email message whose primary purpose is to: • complete or confirm a commercial transaction to which the recipient previously agreed; • provide warranty-like information to a recipient who has bought a product (including product recall, safety, and security information); • provide notification of a change to the company’s terms or account balance information (including a subscription, membership, or loan); • provide information about an employment or benefit plan in which the recipient is currently involved or enrolled; or • deliver goods, services, product updates, or product upgrades to a transaction in which the recipient previously entered. For example, an email from Fred’s Floors about a buyer's previous purchase of flooring and installation tips would be considered a transactional message.

Be aware of what an initiator and a sender are to maintain good business relationships with your email marketing company. Those who are determined to be a sender or an initiator must comply with certain provisions of the Act and are subject to penalties for violating the Act. Under the Act, the definition of a sender is a “person who initiates such a message,” and that person’s good, service, or website is advertised or promoted (sender). For example, Fred’s Floors promotes installation tips of its floors in an email message. Fred’s is a sender under the Act because its products are advertised in the email. Companies can limit their exposure to the Act by communicating in the commercial message to the recipient that the message is from a “particular line of business or division” instead of the entire company. If these installation tips were advertised only by Fred’s Hardwood Floors division instead of Fred’s Floors entirely, the company’s exposure might be limited. Under the Act, "initiate" is defined as “to originate or transmit such message or to procure the origination or transmission of such message” (initiator). Procuring a message typically means to pay or provide some benefit to a third party to send the email on your behalf. For example, Fred’s Floors contracts with Clark’s Marketing to send commercial emails advertising Fred’s Floors' products for a specific dollar amount. Clark’s Marketing is an initiator because it transmits the email. Fred’s Floors is also an initiator since it pays Clark’s Marketing to send the commercial emails on Fred’s Floors' behalf. Therefore, as we see above, it is possible for Fred’s Floors to be both a sender and an initiator. Please be aware that additional requirements apply separately to a sender and an initiator. Certain actions taken by a company, as well as a third party, may not fall under the definition of "initiate." A third party using an automatic process to transmit, route, or store an email

34 hardwood floors www.hardwoodfloorsmag.com