The first
piece of legislation this article looks at had arguably
among the biggest impacts on monetization strategies in our
space thus far. Ironically though, the law does not appear
to have curbed that for which it was intended - spam.
Towards the middle to end of 2003, many states rushed
through anti-spam laws. Fortunately, congress passed
the CAN-SPAM Act of 2004 that superseded the fragmented and
unnavigable local laws. The federal CAN-SPAM Act of 2004
requires unsolicited commercial email senders to identify
themselves clearly in the "from" line, include subject line
text consistent with message content, provide a valid postal
address and contain an opt-out mechanism.
As is the case with almost any law, it’s hard to
please everyone. Spam fighters for instance argued there
were too many loopholes, and they disapproved intensely of
the act’s omission for private action, i.e. the ability for
a person to sue a spammer. Marketers on the other hand
complained that the law was too vague and would cover
welcome electronic messages. They also argued that their
ability to communicate with existing customers could become
illegal. To address such concerns, the FTC developed rules
for determining the primary purpose of an e-mail that will
become effective at the end of March 2005. The rules
distinguish between "transactional/relationship" messages
versus "commercial" e-mails. Transactional e-mails relate to
purchases that already have been completed, while commercial
messages solicit opportunities to buy or sign-up.
https://www.lynxtrack.com/signup.php
How effective has CAN-SPAM been? Since the
measure took effect in January 2004, unsolicited junk e-mail
on the Internet has come to total perhaps 80 percent or more
of all e-mail sent, up from 50 percent to 60 percent of all
e-mail before the law went into effect. Chances are this
rise would have occurred anyway, and the law is just
starting to see some of its first major prosecutions.
Efforts to curb spam are not aided by the growing number of
so-called bulletproof Web host services that offer spam-friendly
merchants access to stable offshore computer servers.
Compound this with the widespread belief that that bulk
e-mailers are partnering with virus writers to scrape
working e-mail addresses and hijack the personal computers
of millions of unwitting Internet users, creating legions of
hard to defend against spam cannons.
The second major area for legislation is the
“spam” of 2004 – spyware. Legislation dealing with spyware
parallels the development of the Can-Spam Act in that
efforts to curb it take place on both the state level and
the federal level, with state level actions having already
made it into law. And similar to CAN-SPAM, the rush to
legislate arises form exponentially increasing consumer
frustration and helpless – feelings only exacerbated by a
general lack of understanding of the marketplace.
Consequently, the reaction on the part of lawmakers has,
similar to spam, been not just swift but potentially far too
wide reaching. As stated in MediaPost, the laws aim to
correct the problem caused by a subset of software and that
the hard part is not capturing the sentiment but defining
exactly the specific subset of software known as spyware.
Good software and really bad software tend to be easy to
identify. On the spectrum of good and bad, picking a
stopping point for including the bad means that some good
will most likely be impacted. The level of good impacted is
what matters to those in our industry and is likely to
include even those outside of software development.
The federal "Securely Protect Yourself Against
Cyber Trespass Act" (SPY-ACT) was first introduced in 2003
as bill HR 2929. It passed 399-1 in the House of
Representatives in October, 2004, but didn't reach a vote in
the Senate before the end of the 108th Congress. As was the
case with that bill, California Representative Mary Bono is
also the sponsor for the reintroduced version known as HR
29. The bill, having just been introduced, starts from
scratch in its march toward becoming law. It begins in the
House Committee on Energy and Commerce and, if successful,
goes to the House floor for a vote. There is little doubt it
will pass again in the House, and if passed by the Senate
could become law later this year.
While the federal law has a
long way to go before becoming a law, in September 2004,
California passed the Consumer Protection Against Spyware
Act. The Act requires websites to inform the user whenever
any kind of spyware is about to be installed and makes the
installation of such applications against a user's wishes
illegal. The law came into effect as of January 1, 2005, and
breaching of the law carries a potential penalty of up to
$1,000 per infected user.
The spyware laws have good
intentions, but the federal law still has some refinement
needed for it to fully alleviate marketers concerns. The
bill questions the legality of using any code to capture and
store user information, including many of the first- and
third-party cookies employed in online advertising. What
this means is that potentially, the use of cookie tracking
by ad networks as it is employed today could become illegal.
Targeting aside, this greatly impacts online advertising at
a fundamental level. Without third party cookies advertisers
for example wouldn’t be able to properly frequency cap. CPA
networks would have a hard time doing real time tracking.
Behavioral targeting would also be hit; as it relies on the passing of
non-identifiable user data using cookies placed by
third-parties. That is why critics argue
the federal bill targets the technology more so than the
behavior. According to Rep. Cliff Stearns (R-Florida)
though, chairman of the Subcommittee on Commerce, Trade and
Consumer Protection "We don't want to necessarily stop those
third-party cookies from working..."
Political party affiliation
aside, let’s hope third-party cookies are not impacted. The
cookie is an endangered species, especially with the
proliferation of Norton, Ad-aware, and other popular
programs already treating it as dangerous. These programs,
like the law are just another challenge that we face. The
good news in all of this is that we face it together, which
means we will most likely find solutions faster. I’d rather
the playing field move but be level rather than become
uneven. I can only hope whatever law comes out of Utah will
be livable.
Jay Weintraub
