BILL ANALYSIS
AB 2950
Page 1
Date of Hearing: April 9, 2008
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mike Eng, Chair
AB 2950 (Huffman) - As Amended: April 3, 2008
SUBJECT : Computers: false or deceptive commercial e-mail
messages.
SUMMARY : Modifies existing prohibitions against unsolicited
commercial electronic mail (e-mail). Specifically, this bill :
1)States legislative intent that the provisions of this bill
shall operate within the exception to federal preemption to
the full extent permitted by the CAN-SPAM Act of 2003 and any
other provision of federal law.
2)Prohibits any person or entity from sending, initiating, or
knowingly enabling or assisting another to send, initiate, or
advertise in a commercial e-mail message that contains falsity
or deception in any portion of the message or information
attached thereto.
3)Specifies that falsity or deception in any portion of a
commercial e-mail message or e-mail attachment includes but is
not limited to the following:
a) The commercial e-mail message contains or is accompanied
by a third party's domain name without the permission of
the third party.
b) The e-mail advertisement's header information contains
or is accompanied by materially false or misleading
information, as defined in federal law.
c) The e-mail advertisement has a subject line that a
person knows would be likely to mislead a recipient, acting
reasonably under the circumstances, about a material fact
regarding the contents or subject matter of the message.
4)Authorizes the Attorney General (AG), district attorney or
city attorney, e-mail service provider, or a recipient of an
unsolicited e-mail to bring action against a person or entity
that violates any provision of this bill.
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5)Specifies that a person or entity bringing an action may
recover or be awarded any or all of the following:
a) Actual damages.
b) Liquidated damages are of one thousand dollars ($1,000)
for each commercial e-mail message transmitted in violation
of the provisions of this bill, up to one million dollars
($1,000,000) per incident.
c) Authorizes a court, when it finds that the defendant
willfully or knowingly violated the provisions of this
bill, to increase the amount of the award to an amount
equal to not more than three times the amounts of actual
and liquidated damages.
d) An order enjoining future violations.
6)Allows the AG, district attorney, city attorney, e-mail
service provider, or recipient of the e-mail, to recover
reasonable attorney's fees and costs.
7)Specifies that there will be no cause of action under this
section against an electronic mail service provider that is
only involved in the routine transmission of the commercial
e-mail message over its computer network. For this purpose,
"routine transmission" does not include actions taken as an
advertising network.
8)Specifies that if the court finds that the defendant
established and implement practices and procedures reasonably
designed to effectively prevent commercial e-mail messages
that are in violation of the provisions of this bill, the
court shall reduce the liquidated damages recoverable to a
maximum of one hundred dollars ($100) for each unsolicited
commercial e-mail advertisement, or a maximum of one hundred
thousand dollars ($100,000) per incident.
9)Specifies that the provisions of this bill are severable.
EXISTING LAW
1)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
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accompanied by a third 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.
2)Authorizes the AG, an internet service provider (ISP), or the
recipient of an unsolicited commercial e-mail advertisement
transmitted in violation of state law to bring an action to
recover liquidated damages of $1,000 per unsolicited
commercial e-mail advertisement transmitted in violation of
provisions, up to $1,000,000 per incident, subject to
reduction by the court, as specified.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "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?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 estimated that spam, including false and deceptive spam, cost
California organizations well over two billion dollars
($2,000,000,000).
"Despite CAN-SPAM, today 90 percent of all e-mail is spam.
Filters have not proven effective, and spam is threatening the
viability of e-mail as a means of communication, for individuals
and businesses alike. A significant amount of spam has false or
deceptive content, either technically or in terms of the
advertised content. Advertisers benefit from, but deny
liability for, their advertising agents' unlawful activities.
Spammers are adept at hiding their tracks. Recipients bear the
costs of spam, not he spammers/advertisers."
Background . This bill follows SB 186 (Murray) Chapter 487,
Statutes of 2003, which completely banned e-mail spam in
California. To enforce this ban, SB 186 created a private right
of action whereby a consumer or an ISP could sue spammers and
recover damages.
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Within months of its passage, SB 186 was preempted by the
federal CAN-SPAM Act of 2003 which allows for spam as long as
various conditions are met. These conditions include offering
the ability to opt-out, a valid e-mail address contact, and the
disclosure of the name and location of the spam sender.
According to the author, "Although this federal measure
preempted California's complete prohibition of spam, it did not
preempt the private right of action consumers and ISPs have
against those who send spam with misleading or falsified headers
and information, as well as the advertisers of those products.
California's current law?is better than most states' laws, by
specifying that individual recipients of spam can bring legal
action, setting liquidated damages at $1000 per spam, and
authorizing attorney's fees for a prevailing plaintiff, but
there are still too many loopholes and ambiguities. Existing
laws have not stopped unlawful spam; in fact, the volume of spam
has increased since CAN-SPAM."
CAN-SPAM . In 2003, Congress enacted CAN-SPAM to curb spam. As
required by CAN-SPAM, the Federal Communications Commission
(FCC) adopted rules that prohibit sending unwanted commercial
e-mail messages to wireless devices without prior permission.
This ban took effect in March 2005. In addition, the Federal
Trade Commission adopted detailed rules that restrict sending
unwanted commercial e-mail messages to computers.
The FCC's ban on sending unwanted e-mail messages to wireless
devices applies to all "commercial messages." The CAN-SPAM Act
defines commercial messages as those for which the primary
purpose is to advertise or promote a commercial product or
service. The FCC's ban does not cover "transactional or
relationship" messages, or notices to facilitate a transaction
already agreed to by the consumer. These messages would include
statements about an existing account or warranty information
about a product purchased by the consumer. The FCC's ban also
does not cover non-commercial messages, such as messages about
candidates for public office.
Previous legislation . SB 186 (Murray) Chapter 487, Statutes of
2003, prohibits the sending of unsolicited e-mail ads from
California or to a California e-mail address and modifies the
provisions governing the recipient of unsolicited electronic
mail (e-mail) advertisements (ads) to contact the sender to
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remove his or her e-mail address from the sender's mailing list,
and
Double-referred . This bill is double-referred to the Assembly
Judiciary Committee. Further analysis of the legal implications
of this bill will be reviewed in that committee's analysis.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Rebecca May / B. & P. / (916) 319-3301