Centers of Excellence: Email marketing
This summer, you, like me, might have received an email from one of your friends indicating that he or she “sent you private photos on Tagged .” Although the message was sent from the email address email@example.com, the alias that appeared in most people’s inboxes was the name of the friend. Additionally, if you hit reply (like I did), the reply went to your friend, not to Tagged.com. The messages we all received (and apparently, in addition to me, there were 20 million others who also received these messages) asked us if we wanted to see our friends’ photos. We had the option of selecting “yes” or “no,” and were told “click yes if you want to see [friend's] photos, otherwise click No. But you have to click! . . . Please respond or [friend] may think you said no .” Both the New York and Texas state attorneys general took exception to these messages, alleging not that they violated email-specific laws like the CAN-SPAM Act, but instead that they violated state deceptive trade practices laws. According to the “Assurance of Discontinuance” negotiated between the New York state attorney general and Tagged.com, after this first batch of deceptive messages was sent, additional, slightly modified (yet still deceptive) messages were sent, as well as frequent reminders if the recipients failed to reply. In addition, according to the Assurance, visitors to the Tagged.com site did not intend to authorize Tagged.com to send messages on their behalf, regardless of their content.
Tagged.com settled with both states and agreed to pay a collective amount of $750,000 ($500,000 to New York and $250,000 to Texas). It also agreed to modify its email practices, first by clearly disclosing that it intends to access an individual’s third-party email address book (such as contacts that the person might have in programs like Gmail or Microsoft Outlook) before doing so. It also promised Texas that it would obtain express, verifiable consent before sending messages to individuals in users’ address books, if those messages were to be marked as coming from the user (like the one that I received this summer). To New York, Tagged.com promised that it would give the user a conspicuous way to decline having such messages sent before they went out. The settlement with Tagged.com serves as a reminder that companies that engage in sending email messages, especially when sending messages on behalf of users, not only need to worry about the restrictions of CAN-SPAM, but also need to keep in mind deceptive trade practices issues as well.
These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.