U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–010

" SENATE ! 107TH CONGRESS

2d Session 

REPORT

2002

107–318

Calendar No. 735

CONTROLLING THE ASSAULT OF NON-SOLICITED PORNOGRAPHY AND MARKETING ACT OF 2002, OR THE ‘‘CAN-SPAM 

ACT OF 2002’’

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION

ON

S. 630

OCTOBER 16, 2002.—Ordered to be printed 


E:\Seals\Congress.#13
(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ERNEST F. HOLLINGS, South Carolina, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

MAX CLELAND, Georgia 

BARBARA BOXER, California 

JOHN EDWARDS, North Carolina 

JEAN CARNAHAN, Missouri 

BILL NELSON, Florida 

JOHN MCCAIN, Arizona 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

KEVIN D. KAYES, Staff Director 

MOSES BOYD, Chief Counsel 

GREGG ELIAS, General Counsel 

JEANNE BUMPUS, Republican Staff Director and General Counsel 

ANN BEGEMAN, Republican Deputy Staff Director 

ROBERT W. CHAMBERLIN, Republican Chief Counsel 

Calendar No. 735

107TH CONGRESS REPORT " SENATE ! 2d Session 107–318

CONTROLLING THE ASSAULT OF NON-SOLICITED PORNOGRAPHY AND MARKETING ACT OF 2002, OR THE 

‘‘CAN-SPAM ACT OF 2002’’

OCTOBER 16, 2002.—Ordered to be printed 

Mr. HOLLINGS, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 630]

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 630) to prohibit senders of unsolicited commercial electronic mail from disguising the source of their 

messages, to give consumers the choice to cease receiving a sender’s unsolicited commercial electronic mail messages, and for other 

purposes, having considered the same, reports favorably thereon 

with an amendment in the nature of a substitute and recommends 

that the bill (as amended) do pass. 

PURPOSE OF THE BILL

The purpose of this legislation is to allow consumers the option 

to decline to receive unsolicited electronic mail (e-mail) from commercial sources. The bill would require senders of unsolicited commercial e-mail (UCE) to include accurate return address or ‘‘header’’ information to identify the sender. The legislation would mandate that senders of UCE provide an Internet-based system for consumers to opt-out of receiving further unsolicited messages from 

that sender. It would also require the sender to include a physical 

address in the e-mail itself for identification and opt-out purposes. 

Criminal sanctions could be imposed on parties who intentionally 

disguise the source of their UCE messages by falsifying header information. Civil sanctions would be available for other violations of 

the bill. 

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BACKGROUND AND NEEDS

UCE, commonly known as ‘‘spam,’’ has quickly become one of the 

most pervasive intrusions in the lives of Americans who use e-mail. 

Software industry analysts report that approximately 15 percent of 

all e-mail traffic is spam. Unlike unsolicited postal mail, spam can 

be sent in massive volumes for very little additional cost, so the 

volume of spam has been rising exponentially—by some estimates, 

more than doubling every 6 months. As a result, e-mail users are 

forced to deal with a deluge of unsolicited, and in most instances 

unwanted, advertisements in their computer e-mail in-boxes. 

The inconvenience and intrusiveness of spam is exacerbated by 

the fact that, in many instances, the senders of UCE purposefully 

disguise the source of the e-mail or include misleading information 

in the e-mail’s subject line. Thus, the recipient is left with no effective ability to manage the inflow of spam—he or she cannot easily 

tell who is sending the messages, what they contain, or how to contact the sender to instruct him or her to take the recipient off the 

mailing list. 

Moreover, the Federal Trade Commission (FTC) has noted that 

many unsolicited e-mail messages contain indecent, misleading, or 

fraudulent content. Common types of fraudulent spam promote 

chain letters, pyramid schemes, stock and investment scams, and 

so forth. Also common is spam with pornographic content or links 

to websites with pornographic content, which some recipients may 

find offensive and may place additional burdens on parents to more 

closely monitor their children’s e-mail. 

Spam imposes economic burdens as well. Massive volumes of 

spam can clog a computer network, slowing Internet service for 

those who share that network. Internet service providers (ISPs) 

must respond to rising spam volumes by investing in equipment to 

increase capacity, and the costs of such investments ultimately get 

passed on to the consumers that ISPs serve. Meanwhile, individual 

consumers and businesses are forced to spend time sorting through 

crowded e-mail in-boxes and deleting unwanted messages. Additionally, some consumers may be assessed fees based on the 

amount of time they spend online, which would include time they 

spend deleting junk e-mail. Left unchecked, spam may significantly 

undermine the usefulness and efficiency of e-mail as a communications tool. 

The CAN-SPAM Act, S. 630, aims to address the problem of 

spam by creating a Federal statutory regime that would give consumers the right to demand that a spammer cease sending them 

messages, while creating civil and criminal sanctions for the sending of spam meant to deceive recipients as to its source or content. 

Under the legislation, enforcement would be undertaken by the 

FTC and, in some cases, industry-specific regulatory authorities. In 

addition, the bill would enable State attorneys general and ISPs to 

bring actions against violators. 

LEGISLATIVE HISTORY

Senators Burns and Wyden introduced S. 630 on March 27, 2001. 

The bill is cosponsored by Senators Lieberman, Landrieu, 

Torricelli, Breaux, Murkowski, Allen, Snowe, Thomas, Hutchinson, 

and Stevens. On April 26, 2001, the Subcommittee on CommunicaVerDate 0ct 09 2002 16:53 Oct 18, 2002 Jkt 019010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6601 E:\HR\OC\SR318.XXX SR318
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tions held a hearing chaired by Senator Burns on the proliferation 

of UCE and methods to provide consumers meaningful solutions to 

opt out of receiving it. A diverse group of associations and private 

parties interested in this issue provided testimony. The FTC testified in support of S. 630. On May 17, 2002, the Senate Commerce, 

Science, and Transportation Committee held an executive session 

at which S. 630 was considered. The bill was approved unanimously by voice vote and was ordered reported with an amendment 

in the nature of a substitute offered by Senators Burns and Wyden, 

and an amendment thereto offered by Senator Boxer regarding the 

large scale third-party collection or ‘‘harvesting’’ of consumer e-mail 

addresses from websites. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 24, 2002. 

Hon. ERNEST F. HOLLINGS, 

Chairman, Committee on Commerce, Science, and Transportation, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 630, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Ken Johnson (for federal costs), Erin Whitaker (for the revenue impact), Angela Seitz 

(for the state and local impact), and Lauren Marks (for the impact 

on the private sector). 

Sincerely, 

BARRY B. ANDERSON

(For Dan L. Crippen, Director). 

Enclosure. 

S. 630—Controlling the Assault of Non-Solicited Pornography and 

Marketing Act of 2002

Summary: S. 630 would impose new restrictions on the transmission of unsolicited commercial electronic mail (UCE). The bill 

would require all senders of UCE to identify the messages as UCE, 

provide accurate header information, include a functioning return 

email address, and stop sending messages to recipients who opt not 

to receive them. In addition, the bill would create criminal penalties for knowingly sending UCE that contains false information 

in the email’s header line. 

The provisions of S. 630 would be enforced primarily by the Federal Trade Commission (FTC) under the authorities provided in the 

Federal Trade Commission Act, which includes assessments of civil 

penalties for violations of the act. However, agencies such as the 

Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit InsurVerDate 0ct 09 2002 16:53 Oct 18, 2002 Jkt 019010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR318.XXX SR318
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ance Corporation (FDIC), the Office of Thrift Supervision (OTS), 

the National Credit Union Administration (NCUA), the Securities 

and Exchange Commission (SEC), and the Secretary of Transportation would enforce the bill as it applies to businesses within the 

agencies’ respective jurisdictions. These agencies would punish violations of the bill’s provisions with civil and criminal penalties. 

CBO estimates that implementing S. 630 would cost about $2 

million in 2003 and about $1 million a year in 2004 and thereafter, 

assuming appropriation of the necessary amounts. CBO estimates 

that civil penalties collected as a result of enacting this bill would 

increase governmental receipts (revenues) by about $3 million a 

year over the 2003–2012 period. The bill also would have additional effects on revenues and direct spending by imposing costs on 

banking regulators and by creating new criminal penalties. However, CBO estimates that these additional effects would be negligible. Because the bill would affect both receipts and direct spending, pay-as-you-go procedures would apply.

S. 630 would impose an intergovernmental mandate as defined 

in the Unfunded Mandates Reform Act (UMRA) because it would 

preempt certain state and local laws that regulate the use of electronic mail to send commercial messages. CBO estimates that complying with that mandate would result in no direct costs to state 

and local governments and thus would not exceed the threshold established by that act ($58 million in 2002, adjusted annually for inflation). 

S. 630 would impose private-sector mandates as defined by 

UMRA by requiring that senders of commercial electronic mail include certain information within their messages. Based on information provided by government and industry sources, CBO expects 

that the direct costs of complying with the mandates would fall 

well below the annual threshold established by UMRA ($115 million in 2002, adjusted annually for inflation). 

Estiamted cost to the Federal Government; The estimated budgetary impact of S. 630 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit).

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007

CHANGES IN FTC SPENDING SUBJECT TO APPROPRIATION 1

Estimated Authorization Level 2 .................................................................... 2 1 1 1 1

Estimated Outlays ......................................................................................... 2 1 1 1 1

CHANGES IN REVENUES

Estimated Revenues ...................................................................................... 1 3 3 3 3

1 S. 630 also would increase direct spending by less than $500,000 a year. 

2 The FTC received a gross 2002 appropriation of $156 million. This amount will be offset by an estimated $108 million in fees the FTC 

collects for merger reviews. 

Basis of estimate: S. 630 would require that the FTC enforce the 

provisions of the bill under the Federal Trade Commission Act. 

Based on information from the FTC, CBO excepts that the agency 

would need to upgrade its database of UCE complaints, hire additional staff to investigate possible violations, and assist companies 

attempting to comply with the bill’s provisions. CBO estimates that 

these activities would cost $2 million in 2003 and $1 million a year 

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in subsequent years, assuming appropriation of the necessary 

amounts. 

S. 630 would create a variety of new civil and criminal penalties, 

which are classified in the budget as governmental receipts (revenues). The FTC would enforce the bill with civil penalties using its 

authority under the Federal Trade Commission Act. Based on information from the FTC, CBO estimates that these enforcement efforts would cause revenues to rise by $3 million a year under the 

bill. The bill also would create new criminal penalties and authorize other agencies, including the SEC and the Department of 

Transportation, to enforce the bill’s provisions on industries within 

their jurisdictions using both civil and criminal penalties. However, 

CBO estimates that the effect of those additional provisions on revenues would not be significant in any year. 

Collections of criminal fines are deposited in the Crime Victims 

Fund and spent in subsequent years. Because any increase in direct spending would equal the amount of fines collected (with a lag 

of one year or more), the additional direct spending also would be 

negligible. 

The OCC, NCUA, OTS, FDIC, and the Board of Governors of the 

Federal Reserve System would enforce the provisions of S. 630 as 

they apply to financial institutions. The OCC, NCUA, and OTS 

charge fees to the institutions they regulate to cover all of their administrative costs; therefore, any additional spending by these 

agencies to implement the bill would have no net budgetary effect. 

That is not the case with the FDIC, however, which uses insurance 

premiums paid by all banks to cover the expenses it incurs to supervise state-chartered banks. The bill’s requirement that the 

FDIC enforce the bill’s restrictions on UCE sent by these banks 

would cause a small increase in FDIC spending but would not affect its premium income. In total, CBO estimates that S. 630 would 

increase net direct spending of the OCC, NCUA, OTS, and FDIC 

by less than $500,000 a year. 

Budgetary effects on the Federal Reserve are recorded as 

changes in revenues (governmental receipts). Based on information 

from the Federal Reserve, CBO estimates that enacting S. 630 

would reduce such revenues by less than $500,000 a year. 

Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation effecting direct spending or receipts. The net changes 

inoutlays and governmental receipts that are subject to pay-as-yougo procedures are shown in the following table. (The estimated impact on outlays is less than $500,000 a year.) For the purposes of 

enforcing pay-as-you-go procedures, only the effects through 2006 

are counted.

By fiscal year, in millions of dollars—

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Changes in Outlays .................................................. 0 0 0 0 0 0 0 0 0 0 0

Changes in Receipts ................................................ 0 1 3 3 3 3 3 3 3 3 3

Estimated impact on state, local, and tribal governments: S. 630 

would impose an intergovernmental mandate as defined in UMRA 

because it would preempt certain state and local laws that regulate 

the use of electronic mail to send commercial messages. CBO estiVerDate 0ct 09 2002 16:53 Oct 18, 2002 Jkt 019010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR318.XXX SR318
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mates that complying with that mandate would result in no direct 

costs to state and local governments and thus would not exceed the 

threshold established by that Act ($58 million in 2002, adjusted annually for inflation). 

Estimated impact on the private sector: S. 630 would impose private-sector mandates as defined by UMRA by requiring that senders of commercial electronic mail include certain information within their messages. The bill would require that all senders of commercial electronic mail include a valid return electronic mail address and an accurate subject heading within their message. Senders of UCE would further be required to identify their messages as 

UCE and to include a valid physical postal address within their 

messages. The bill would specify that the electronic mail address 

of the UCE sender must remain functioning for at least 30 days 

after transmission of UCE. 

In addition, S. 630 would require persons who send UCE to provide the recipients of their messages with an option to discontinue 

receiving UCE from the sender and to notify recipients of that option to discontinue in each UCE message. If a recipient makes a 

request to a sender not to receive some or any UCE messages from 

such sender, then the sender, or anyone acting on their behalf, 

would be prohibited from initiating a transmission to the recipient 

10 days after the receipt of such a request. Based on information 

from government and industry sources, CBO estimates that the direct costs of complying with the mandates contained in the bill 

would fall well below the annual threshold established by UMRA 

for private-sector mandates ($115 million in 2002, adjusted annually for inflation). 

Previous CBO estimate: On April 13, 2001, CBO transmitted a 

cost estimate H.R. 718, the Unsolicited Commercial Electronic Mail 

Act of 2001, as ordered reported by the House Committee on Energy and Commerce on April 4, 2001. Although the two bills are 

similar, H.R. 718 does not contain the provisions requiring banking 

regulators to enforce the bill within their jurisdictions. The estimated costs of the bills are very similar, with the only difference 

reflecting later enactment. In our earlier cost estimate for H.R. 

718, CBO included an estimated impact for 2002, based on the assumption that the bill would be enacted near the start of 2002. 

Estimate prepared by: Federal Costs: Ken Johnson; Revenues: 

Erin Whitaker; Impact on State, Local, and Tribal Governments: 

Angela Seitz; and Impact on the Private Sector: Lauren Marks. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

REGULATORY IMPACT STATEMENT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported: 

NUMBER OF PERSONS COVERED

S. 630 would provide all individuals using e-mail certain protections from fraudulent or misleading behavior by senders of commercial e-mail, and an opportunity to elect whether or not to receive UCE. Additionally, the legislation would mandate that all 

7

persons who send commercial e-mail meet certain requirements, including proper identification and providing an Internet-based reply 

system for recipients so they may opt out of future UCE sent by 

that sender. Therefore, S. 630 would cover all consumers who receive e-mail, and all senders of commercial e-mail. 

ECONOMIC IMPACT

The legislation would result in new or incremental costs for senders of commercial e-mail to comply with the legislation’s requirements, to the extent that those senders have not already made provisions to prevent fraudulent or misleading headers or subject 

headings, ensure proper identification of the sender, and provide 

Internet-based reply mechanisms that allow recipients to choose 

whether to receive future messages. Certain reports have noted the 

fairly low cost borne by senders of commercial e-mail and the increased costs that ISPs and their customers pay to handle increasing commercial e-mail traffic. The Committee notes that many direct marketing groups and companies that use commercial e-mail 

have already implemented Internet-based response systems for recipients. Therefore, many of the costs that would be expected to be 

incurred from S. 630 have already been absorbed by the marketing 

and sales industries that send commercial e-mail. However, certain 

industries with extensive marketing affiliates claim that the costs 

of integrating opt-out systems network-wide may be significant. 

PRIVACY

S. 630 would increase the personal privacy of all users of e-mail 

by providing them with the ability to decline to receive future UCE 

from the same sender. S. 630 would also require senders of UCE 

to identify themselves to the recipients by truthful header information and a mailing address where a recipient can contact the sender, thereby better informing the recipient of the identity of the 

sender. 

PAPERWORK

S. 630 would require the FTC to perform a study, and submit a 

report to the Congress, within 24 months after the date of enactment of the legislation. The legislation should generate similar 

amounts of administrative paperwork as other legislation requiring 

multiple agency enforcement and a report to Congress. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title 

This section would provide that the legislation may be cited as 

the ‘‘Controlling the Assault of Non-Solicited Pornography and 

Marketing Act of 2002’’ or as the ‘‘CAN-SPAM Act of 2002.’’

Section 2. Congressional Findings and Policy 

This section cites the marketing benefits commercial e-mail can 

provide to businesses advertising on the Internet, but emphasizes 

that the ability to send virtually unlimited amounts of UCE could 

force recipients to waste substantial time and resources reviewing 

and discarding such e-mail. In addition, huge volumes of UCE 

could impose significant costs to ISPs via system upgrades to hanVerDate 0ct 09 2002 16:53 Oct 18, 2002 Jkt 019010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR318.XXX SR318
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dle the volume of spam sent to end users, who ultimately would 

bear the costs of those upgrades through increased service rates. 

This section also states that an increasing number of spammers 

purposefully include misleading information in subject lines, and 

that some UCE contains material that recipients may consider vulgar or pornographic in nature. In light of the increased amount of 

UCE, the section finds that unless there is a reliable method by 

which consumers can refuse to accept such e-mail, the benefits of 

the Internet may be diminished. Because of the impact on Internet 

commerce, the section also states that there is a substantial government interest in regulating UCE to ensure such e-mail messages are not misleading as to their source and that recipients have 

a right to decline UCE from the same source. 

Section 3. Definitions 

This section would define terms used throughout the bill, some 

of which have a specific contextual meaning in the statutory regime 

created by the legislation. The following definitions included in S. 

630 are of particular importance: 

AFFIRMATIVE CONSENT.—The term ‘‘affirmative consent’’ means that the message is being sent with the express consent, 

or at the express direction, of the recipient. Pursuant to this 

definition, affirmative consent is intended to require some kind 

of active choice or selection by the recipient; merely remaining 

passive, as in the case where a consumer fails to modify a default setting expressing consent, is not a sufficient basis for affirmative consent. However, this definition does not require 

consent on an individual, sender-by-sender basis. A recipient 

could affirmatively consent to messages from one particular 

company, but could also consent to receive either messages on 

a particular subject matter (e.g., gardening products) without 

regard to the identity of the sender, or messages from 

unnamed marketing partners of a particular company. All of 

these are examples of ways consumers could provide affirmative consent under the provisions of the legislation. 

COMMERCIAL ELECTRONIC MAIL MESSAGE.—The term ‘‘commercial electronic mail message’’ means any electronic mail 

message where the primary purpose is the commercial advertisement or promotion of a product or service. This definition 

is intended to cover marketing e-mails. Advertisements for content on an Internet website operated for a commercial purpose 

are included within the definition because an e-mail urging the 

recipient to visit a particular commercial website is just as 

much a marketing message as an e-mail urging the purchase 

of a specific product or service. However, the definition is not 

intended to cover an e-mail that has a primary purpose other 

than marketing, even if it mentions or contains a link to the 

website of a commercial company or contains an ancillary marketing pitch. Thus, the definition expressly excludes e-mail 

messages whose primary purpose is to facilitate, complete, confirm, provide, or request information concerning a preexisting 

transaction or relationship. For example, an e-mail message 

providing a monthly bank account statement to the recipient, 

or providing a product recall notice, would not be considered a 

commercial electronic mail message under the legislation, even 

9

if the message includes at the bottom some promotional information about the sender’s other products. 

HEADER INFORMATION.—The term ‘‘header information’’ means the source, destination, and routing information attached to the beginning of an e-mail message, including the 

originating domain name and originating e-mail address. 

IMPLIED CONSENT.—The term ‘‘implied consent,’’ in reference 

to a commercial e-mail message, means that two requirements 

are met. First, a business transaction, between the sender and 

recipient, must have occurred within a 3-year period ending 

upon receipt of the message. A business transaction may include a transaction involving the provision, free of charge, of 

information, goods, or services requested by the recipient. However, it is intended that merely visiting a free website and 

browsing its content does not constitute a ‘‘transaction’’ for 

purposes of this definition. Second, the recipient of the message must have been given clear and conspicuous notice of an 

opportunity not to receive UCE from the sender and has not 

exercised that opportunity. Unlike affirmative consent, implied 

consent does not require an active choice or request by the recipient, so long as the recipient has the been given the ability 

via conspicuous notice to decline receiving additional messages 

from the sender. 

INITIATE.—The term ‘‘initiate,’’ in reference to a commercial 

e-mail message, means to originate or procure the origination 

of such e-mail message. Thus, if one company hires another to 

handle the tasks of composing, addressing, and coordinating 

the sending of a marketing appeal, both companies could be 

considered to have initiated the message—one for procuring 

the origination of the message, the other for actually originating it. However, the definition specifies that a company that 

merely engages in routine conveyance, such as an ISP that 

simply plays a technical role in transmitting or routing a message and is not involved in coordinating the recipient addresses 

for the marketing appeal, shall not be considered to have initiated the message. 

RECIPIENT.—The term ‘‘recipient’’ means an authorized user 

of the e-mail address to which an e-mail message was sent or 

delivered. If such a user has other e-mail addresses in addition 

to the address to which the message was sent, each of those 

addresses will be treated as an independent recipient for purposes of this legislation. For example, a person may have an 

e-mail address provided by his ISP and also subscribe to a second free e-mail service. Under the legislation, each of these addresses is considered independent, although they are both 

owned by the same person. Therefore, if an unsolicited commercial message is sent by the same sender to each of the recipient’s e-mail addresses and the recipient does not wish to receive future messages, the recipient must opt out for each address. However, if an e-mail address is reassigned to a new 

user, as may happen after one user gives up an e-mail address 

in connection with a change in ISP or a change in employer, 

the new user shall not be treated as a recipient of any commercial e-mail message sent or delivered to that address before it 

was reassigned. 

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SENDER.—The term ‘‘sender’’ means a person who initiates a 

commercial e-mail and whose product, service or Internet web 

site is advertised or promoted by the message. Thus, if one 

company hires another to coordinate an e-mail marketing campaign on its behalf, only the first company is the sender, because the second company’s product is not advertised by the 

message. 

UNSOLICITED COMMERCIAL ELECTRONIC MAIL MESSAGE.—

The term ‘‘unsolicited commercial electronic mail message’’

means any commercial electronic message that is sent to a recipient without the recipient’s prior affirmative or implied consent. 

Section 4. Criminal Penalty for Unsolicited Commercial Electronic 

Mail Containing Fraudulent Routing Information 

This section would provide misdemeanor criminal liability for intentionally sending UCE with falsified information concerning the 

transmission or source of the message. The section would amend 

chapter 63 of title 18, United States Code, to require that a person 

who sends an unsolicited commercial e-mail, with knowledge and 

intent that the message contains or is accompanied by header information that is materially false or materially misleading shall be 

fined or imprisoned for one year, or both. This section further 

states that header information that includes an originating e-mail 

address, the use of which was not authorized by the legitimate 

holder of the address, or access to which was obtained by means 

of false or fraudulent pretense or representations, would be considered materially misleading. This provision is intended to address 

the situation where a spammer hacks into, or upon false pretenses 

obtains access to, an innocent party’s e-mail account and uses it to 

send out spam. 

Section 5. Other Protections Against Unsolicited Commercial Electronic Mail 

This section contains the bill’s principal requirements for senders 

of UCE, violations of which would not be criminal but would be unfair or deceptive acts or practices enforced by the FTC and other 

Federal agencies. 

Section 5(a)(1) would prohibit falsified transmission information. 

Specifically, it would be unlawful to send a commercial e-mail message that contains or is accompanied by header information 

(source, destination and routing information) that is materially or 

intentionally false or misleading. As in section 4, if the sender includes an e-mail address in the header that was not authorized by 

the legitimate holder of that address, or if access to an e-mail address was obtained fraudulently, the commercial e-mail would be 

considered materially misleading. The intent of this subsection is 

to eliminate the use of inaccurate originating e-mail addresses that 

disguise the identities of the senders. 

Section 5(a)(2) would prohibit the knowing use of deceptive subject headings in commercial e-mail messages. The test is whether 

the sender knows that the subject heading would be likely to mislead a reasonable recipient about a material fact regarding the content or subject matter of the message. Thus, minor typographical 

11

errors or truly accidental mislabeling should not give rise to liability under this section. 

Section 5(a)(3) would require that when a commercial e-mail is 

unsolicited, the message must have a functioning return e-mail address or other Internet-based reply mechanism (such as a link to 

a web page at which a user can ‘‘click’’ to select e-mail options) 

through which a recipient can opt out of future messages. The return address, or other Internet-based reply mechanism, must remain capable of receiving communications from the recipient of the 

UCE for at least 30 days from the date of the original e-mail. The 

temporary inability of a return address to accept e-mails due to a 

technical or capacity problem would not be a violation of the law 

if the problem is corrected within a reasonable time period. It is 

recognized that computer systems are fallible on occasion, and this 

exception is intended to protect senders of UCE who act in good 

faith to receive opt-out messages but are unable do to so because 

of these occasional system failures. It is expected that these failures will be corrected in a time that is deemed reasonable to effect 

the necessary repairs according to industry standards and practice. 

Senders that do not make repairs in a reasonable time would be 

considered in violation of the law and subject to penalties. Subparagraph (B) is intended to make clear that the opt-out mechanism required by the subsection would not need to be an ‘‘all or 

nothing’’ proposition. A recipient must have the option of declining 

to receive all further messages, but a sender could also give the recipient the option of receiving some types of messages but not others. 

Section 5(a)(4) would require that once a sender receives a request from a recipient to not send any more UCE, the sender must 

cease the transmission of UCE to that recipient within 10 days of 

receiving the recipient’s request. This 10-day window also applies 

to any person acting on behalf of the sender to initiate the transmission of the UCE, or any person who provides or selects e-mail 

addresses for the sender, so long as those persons know that a request to cease the messages was made by the recipient. Those persons cannot avoid liability under this section by consciously avoiding knowing that a recipient requested to opt out of receiving unsolicited commercial messages. The intent of this requirement is to 

ensure that persons providing e-mail marketing services would be 

responsible for making a good faith inquiry of their clients (the 

senders, under the definitions of this bill) to determine whether 

there are recipients who should not be e-mailed because they have 

previously requested not to receive e-mails from that sender. Email marketers who willfully remain unaware of prior recipient 

opt-outs would not be excused from liability under this legislation. 

Section 5(a)(5) would require UCE to contain clear and conspicuous identification that the e-mail is an advertisement or solicitation. The section would also require clear and conspicuous notice 

of the opportunity to decline receiving further unsolicited commercial e-mail, and would require the inclusion of a valid physical postal address for the sender. 

Section 5(b) would address the activity known as ‘‘address harvesting.’’ This section would make it an additional violation of the 

law to initiate UCE to a recipient whose address was obtained, 

using an automatic address gathering program or process, from a 

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website or proprietary online service that has a policy of not sharing its users’ e-mails for purposes of sending spam. 

Section 5(c) would create an affirmative defense for senders of 

UCE in certain circumstances. A person would not be considered 

in violation of sections 5(a) (2), (3), (4), or (5) if that person has 

adopted reasonable practices and procedures to prevent violations 

and has made good faith efforts to maintain compliance with the 

bill’s provisions. The affirmative defense is intended to protect 

those persons who have preventative practices in place but through 

unforeseen circumstances find themselves in violation. It is expected that persons who regularly fail to comply with the bill’s provisions would not meet the requirements of reasonable practices or 

procedures, nor be able to make a clear showing of good faith efforts to be compliant. 

Section 6. Enforcement by the Federal Trade Commission 

Sections 6(a) and 6(d) prescribe that section 5 would be enforced 

by the FTC under section 18 of the FTC Act (15 U.S.C. 41 et seq.) 

as if the violation were an unfair or deceptive act or practice. The 

Commission would be required to prevent persons from violating 

this legislation in the same manner, by the same means, and with 

the same jurisdiction, powers, and duties as though all applicable 

terms and provisions of the FTC Act were incorporated and made 

a part of this legislation. Therefore, all the jurisdictional, remedial, 

and civil enforcement provisions of the FTC Act would be applicable to commercial e-mail under the provisions of this legislation. 

Sections 6(b) and 6(c) provide for enforcement by other agencies 

for entities subject to their jurisdiction due to the jurisdictional 

limitations of the FTC. These agencies include the Office of the 

Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Department of Transportation, the Department of Agriculture, the Farm Credit Administration, the Securities and Exchange Commission and the Federal Communications Commission, 

for those entities subject to their jurisdiction. Under section 6(c), 

these agencies and the others set forth in section 6(b), may exercise 

authority provided by their own statutory grants to enforce the 

substantive provisions of this legislation. 

Section 6(e) would grant State attorneys general the right to 

bring a civil action for violations of section 5. A State may bring 

an action in parens patriae for aggrieved citizens of the State in 

Federal district court to obtain injunctive relief or recover actual or 

statutory damages, whichever is greater. Statutory damages under 

this section are up to $10 per unlawful message, with the precise 

per message amount set by the court based on the degree of culpability and other equitable factors. For any violation of section 5, the 

maximum total amount of damages would be capped at $500,000. 

If the court finds violations of section 5 were committed willfully 

or knowingly, the legislation would allow the maximum damages to 

be increased up to $1,500,000. Reasonable attorneys’ fees would be 

awarded to the State for a successful action. 

Section 6(f) would allow a provider of Internet access service adversely affected by a violation of section 5 to bring a civil action in 

Federal district court. This could include a service provider who 

carried unlawful spam over its facilities, or who operated a website 

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or online service from which recipient e-mail addresses were harvested in connection with a violation of section 5(b). The provider 

may obtain injunctive relief or actual or statutory damages calculated in the same manner as section 6(e). The court would be 

permitted to assess the costs of such an action, including reasonable attorneys’ fees, against any party. 

Section 7. Effects on Other Laws 

Section 7(a) would limit the effect the legislation would have on 

current Federal statutes. It clarifies that nothing in the legislation 

should be construed to interfere with the enforcement of the provisions of the Communications Act of 1934 relating to obscenity, or 

sexual exploitation of children, or the FTC Act for materially false 

or deceptive representations in commercial e-mail messages. 

Section 7(b)(1) sets forth the general rule concerning the preemption of State law by the legislation. The legislation would supersede 

State and local statutes, regulations, and rules regulating the use 

of e-mail to send commercial messages. Given the inherently interstate nature of e-mail communications, the Committee believes 

that the creation of one, national standard would be beneficial to 

consumers, businesses, and regulators. Section 7(b)(2) of the legislation would create exceptions to the general rule in section 7(b)(1), 

providing that the legislation would not preempt any civil action 

under State trespass, contract or tort law, or any Federal or State 

criminal law or civil remedy that relates to acts of computer fraud 

perpetrated by means of the unauthorized transmission of unsolicited commercial e-mail. 

Section 7(b)(3) would clarify the scope of the exceptions set forth 

in 7(b)(2). Section 7(b)(3) is included to ensure that the preemptive 

effect of this bill could not be evaded by State enactment of a law 

that seeks to regulate UCE but simply uses a different label, such 

as fraud or trespass. To prevent such an evasion, section 7(b)(3) 

would limit the section 7(b)(2) exceptions so that State and local 

statutes would not be exempted from preemption if they treat the 

mere act of sending UCE as a sufficient basis for liability. Thus, 

section 7(b)(3) would clarify that this bill would preempt State laws 

that are simply re-titled efforts to impose a regulatory regime on 

UCE that differs from the regime imposed by this legislation, such 

as a law that makes it an unlawful ‘‘trespass’’ to transmit UCE 

without including the sender’s phone number. 

Section 7(b)(3), however, is a narrow limitation. It would not require preemption of State trespass, contract, tort, and computer 

fraud laws under any circumstances that those laws are used to 

sue senders of unsolicited commercial e-mail. For example, the provision would not apply to State or local contract or trespass laws 

that allow Internet access providers to sue senders of UCE for violations of the providers’ terms of use. Nor does the provision apply 

to the enforcement of State fraud laws against senders of UCE if 

the content of the e-mail message is fraudulent or the means of 

transmission of the e-mail involves fraudulent or deceptive acts, 

such as using fraudulent pretenses to gain unauthorized access to 

an e-mail account from which to send UCE. In such cases, the 

State laws in question do not make the mere sending of an unsolicited commercial e-mail a sufficient basis for liability. Instead, liability rests on the sending of the e-mail plus some other action, 

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such as violation of contractual terms, acts of fraud or deception in 

connection with initiating the transmission of the e-mail, or inclusion of fraudulent content in the e-mail message. 

Section 7(c) would clarify that this legislation would have no impact on the lawfulness of ISPs’ efforts to filter or block e-mails traversing their systems. 

Section 8. Study of Effects of Unsolicited Commercial Electronic 

Mail 

This section would require the FTC, in consultation with the Department of Justice and other appropriate agencies, to submit a report to Congress within 24 months after enactment of this legislation, on the effectiveness and enforcement of the provisions of this 

legislation and any modifications to the legislation which may be 

considered appropriate. The FTC would also be required to include 

in the report an analysis of the extent to which technological and 

marketplace developments may affect the practicality and effectiveness of the legislation. 

Section 9. Separability 

This section states that if any provision or application of a provision of the legislation is held invalid, the remainder of the legislation and application of its provisions will not be affected. 

Section 10. Effective Date 

This section provides that the provisions of this legislation would 

take effect 120 days after the date of enactment. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new material is printed in italic, existing law in which no change is proposed is shown in roman):

TITLE 18, UNITED STATES CODE 

CHAPTER. 63. MAIL FRAUD

§ 1351. Unsolicited commercial electronic mail containing 

fraudulent transmission information 

(a) IN GENERAL.—Any person who initiates the transmission, to 

a protected computer in the United States, of an unsolicited commercial electronic mail message, with knowledge and intent that the 

message contains or is accompanied by header information that is 

materially false or materially misleading shall be fined or imprisoned for not more than 1 year, or both, under this title. For purposes of this subsection, header information that includes an originating electronic mail address the use of which in connection with 

the message was not authorized by the legitimate holder of the address, or access to which was obtained by means of false or fraudulent pretense or representations, shall be considered materially misleading. 

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(b) DEFINITIONS.—Any term used in subsection (a) that is defined 

in section 3 of the CAN-SPAM Act of 2002 has the meaning given 

it in that section.

Æ