BILL NUMBER: AB 2950 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Huffman FEBRUARY 22, 2008 An act relating to commercial e-mail messages. LEGISLATIVE COUNSEL'S DIGEST AB 2950, as introduced, Huffman. Computers: false or deceptive commercial e-mail messages. Existing state law prohibits a person or entity from advertising in a commercial e-mail advertisement that is sent either from California or to a California e-mail address if the e-mail contains or is accompanied by a 3rd party's domain name without permission, contains or is accompanied by falsified, misrepresented, or forged header information, or has a misleading subject line, and makes a violation of the prohibition a misdemeanor. Existing law authorizes the Attorney General, an e-mail service provider, or the recipient of an unsolicited commercial e-mail advertisement transmitted in violation of these provisions to bring an action to recover liquidated damages of $1,000 per unsolicited commercial e-mail advertisement transmitted in violation of the provisions, up to $1,000,000 per incident, subject to reduction by the court, as specified. This bill would declare the intent of the Legislature to prohibit false and deceptive spam, as specified. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares all of the following: (a) Prohibiting false and deceptive commercial e-mail is a matter vitally affecting the public interest for the purpose of protecting consumers and businesses in California. Falsity or deception in commercial e-mail messages is not reasonable or necessary for the development and preservation of commerce, is unconscionable, and demands consumer protection. (b) The economic harm and invasion of privacy resulting from the transmission and receipt of false and deceptive commercial e-mail constitutes a threat to the welfare of residents of California. It is the intent of the Legislature that this act shall afford maximum protection to consumer and business recipients of commercial e-mail messages. (c) Because there are limited resources for the Attorney General to undertake action against out-of-state spammers, authorizing a private right of action for recipients of unlawful spam is necessary in order to protect consumers and further efforts to combat unlawful spam. (d) False and deceptive commercial e-mail costs California residents more than one billion dollars ($1,000,000,000) per year as a result of the following: (1) The need to acquire additional capacity for computer systems. (2) The need to acquire software programs to filter and control false and deceptive commercial e-mail messages. (3) The time and productivity lost when businesses and public bodies must devote personnel resources to the following: (A) Creating and maintaining e-mail message filters for users, computers, networks, and e-mail service providers. (B) Removing infestations of false and deceptive commercial e-mail messages from computers, networks, and e-mail inboxes. (C) Unclogging transmission paths. (D) Repairing and restarting computer systems that have experienced system failures resulting from false and deceptive commercial e-mail messages. (E) Disruptions of legitimate e-mail communications and abandonment of e-mail addresses. (e) Federal and state laws have proven inadequate to prevent the harm to the public welfare that results from the transmission and receipt of false and deceptive commercial e-mail messages. (f) Existing federal law has preempted the regulation of truthful and nondeceptive commercial e-mail advertisements. Consequently, the Legislature only seeks to regulate false and deceptive commercial e-mail advertisements, until such time as federal law is amended. (g) At the present time, over 90 percent of all e-mail traffic in the United States is comprised of unsolicited commercial e-mail advertisements (spam), including false and deceptive spam. (h) The increase in spam is not only an annoyance but is also an increasing drain on corporate budgets and possibly a threat to the continued usefulness of the most successful tool of the computer age. (i) Complaints from irate businesses and home-computer users regarding spam have skyrocketed, and polls have reported that 74 percent of respondents favor making mass spamming illegal and only 12 percent are opposed, and that 80 percent of respondents consider spam very annoying. (j) According to Ferris Research Incorporated, a San Francisco consulting group, in 2005, spam cost United States organizations more than seventeen billion dollars ($17,000,000,000), including lost productivity and the additional equipment, software, and manpower needed to combat the problem. California represents 12 percent of the United States population with an emphasis on technology business and it is, therefore, estimated that spam, including false and deceptive spam, cost California organizations well over two billion dollars ($2,000,000,000). (k) Like junk fax, false and deceptive spam imposes a cost on users, using up valuable storage space in e-mail inboxes, as well as costly computer bandwidth, and on networks and the computer servers that power them, and discourages people from using e-mail. (l) Spam filters have not proven effective because they are subject to spammers' ever-changing attempts at circumvention. (m) Like traditional paper "junk" mail, spam can be annoying and waste time, but spam causes many additional problems because it is easy and virtually free to create, but difficult and costly to eliminate. (n) The "cost shifting" from deceptive spammers to Internet businesses and e-mail users has been likened to sending junk mail with postage due or making telemarketing calls to someone's pay-per-minute cellular phone. (o) Many spammers have become so adept at masking their tracks that they are rarely found, often due to return addresses that show up on the display as "unknown," are fake, or are located outside of the United States. Spammers are technologically sophisticated and they can adjust their systems to counter special filters and other barriers against spam and can electronically commandeer unprotected computers, turning them into spam-launching weapons of mass production. At present, more than 80 percent of spam is sent through compromised computers, known as "zombie" machines. (p) There is a need to regulate the advertisers who promote their products and services through false or deceptive spam, as well as the actual senders of false or deceptive spam, because the advertisers are the ultimate beneficiaries of that spam and because spammers who actually "hit the send key" can be impossible to track down and are often outside of California or outside of the United States. (q) A significant amount of spam, including false and deceptive spam, is sent by affiliates or subaffiliates who act as marketing agents for the advertisers, through advertising networks that act as middlemen to connect advertisers with spammers, or through third-party e-mailing services. These advertising networks and e-mailing services also have a financial stake in any transactions resulting from this spam. (r) In addition, false and deceptive spam is responsible for virus proliferation that can cause tremendous damage both to individual computers and to business systems. (s) It is not necessary that recipients attempt to opt out of spam. Indeed, to attempt to do so is often ineffectual and often results in being a direct method of placing one's e-mail address on even more spammers' lists. E-mail service providers and the California Attorney General advise consumers not to attempt to opt out of spam lists. Furthermore, clicking on an "opt-out" line can place the recipient's computer at high risk of being compromised or infected with malicious software. (t) Many, if not most, e-mail users have been forced to use spam filters to automatically sort and delete e-mails so that the user does not have to open or read spams unless they specifically desire to. However, these spam filters have not proven to be 100 percent effective, as spammers continually find new ways to bypass or defeat the spam filters, and sometimes the filters miscategorize solicited e-mail as spam. (u) Because of the above problems, it is the intent of the Legislature to prohibit false and deceptive spam.