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AB-2546 Commercial email advertisements.(2017-2018)

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Date Published: 04/09/2018 09:00 PM
AB2546:v97#DOCUMENT

Amended  IN  Assembly  April 09, 2018
Amended  IN  Assembly  March 21, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2546


Introduced by Assembly Member Chau

February 15, 2018


An act to amend Sections 17529, 17529.1, and 17529.5 of the Business and Professions Code, relating to commercial email advertisements.


LEGISLATIVE COUNSEL'S DIGEST


AB 2546, as amended, Chau. Commercial email advertisements.
Existing law prohibits a person or entity from initiating or advertising in unsolicited commercial email advertisements and places other restrictions related to that activity. Existing law defines the term “commercial email advertisement” for purposes of those provisions to mean an electronic mail message initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, or other disposition of property, goods, services, or extension of credit.
This bill would expand the definition of “commercial email advertisement” to include an electronic mail message initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, promotion, or other disposition of stocks, bonds, sweepstakes, insurance, employment opportunities, or any other solicitation.
Existing law prohibits a person or entity from advertising in a commercial email advertisement sent from California or to a California email address in certain circumstances, including if the email advertisement contains or is accompanied by falsified, misrepresented, or forged header information. information or by a 3rd-party’s domain name without the permission of the 3rd party. Existing law makes a violation of that prohibition a misdemeanor.
This bill would also make it unlawful for a person or entity to initiate, or enable or assist a person or entity to initiate or advertise in, a commercial email advertisement sent from California or to a California email address in the above-described circumstances. The bill would also add to the circumstances that would trigger a violation, including the circumstance in which the party who initiates the email portrays itself as multiple parties, as specified, or in which the subject line of the email indicates that the email advertisement is being sent in response to a request or previous correspondence from the recipient when the recipient made no such request. The bill would expand the prohibition on the advertisement containing a 3rd-party’s domain name to also apply to the 3rd-party’s email address, but the bill would specify that this prohibition does not affect comparative advertising that references names, user names, domain names, or email addresses. By expanding the scope of a crime, the bill would impose a state-mandated local program.
Existing law authorizes the Attorney General, the recipient of an unsolicited commercial email advertisement, and an electronic mail service provider to bring an action against a person or entity that violates those provisions to recover, among other things, liquidated damages. Existing law requires the court to reduce those liquidated damages, as specified, if the court finds that the defendant established and implemented practices and procedures reasonably designed to effectively prevent unsolicited commercial email advertisements that are in violation of existing law.
This bill would also authorize a district attorney or city attorney, or a person whose name, username, email address, or domain name appear in the “from” name or sender’s email address without permission from that person or entity, to bring an action under these provisions and would authorize a court to enter an order enjoining violations of those provisions. The bill would add to the findings that the court must make in order to reduce liquidated damages to include, among other things, a finding that the defendant provided its personnel with training regarding practices and procedures designed to effectively prevent the emails prohibited under the bill’s provisions.
Existing law sets forth findings and declarations of the Legislature relating to unsolicited commercial email advertisements.
This bill would revise the findings and declarations of the Legislature regarding regulation of commercial email advertisements and would make other related changes.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17529 of the Business and Professions Code is amended to read:

17529.
 The Legislature hereby finds and declares all of the following:
(a) According to Cisco Systems, Inc., spam accounted for nearly two-thirds, or 65 percent, of the total email volume in 2016, and global spam volume is growing.
(b) 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.
(c) Complaints from irate business 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.
(d) According to Justin M. Rao of Microsoft Research and David H. Reiley, Jr., formerly of Google, spam costs American firms and consumers twenty billion dollars ($20,000,000,000) annually. California is 12 percent of the United States population with an emphasis on technology business, and it is therefore estimated that spam costs California organizations well over 2.4 billion dollars ($2,400,000,000).
(e) Like junk faxes, spam imposes a cost on users, using up valuable storage space in email inboxes, as well as costly computer band width, bandwidth, and on networks and the computer servers that power them, and discourages people from using email.
(f) Spam filters have not proven effective.
(g) Like traditional paper “junk” mail, spam can be annoying and waste time, but it also causes many additional problems because it is easy and inexpensive to create, but difficult and costly to eliminate.
(h) The “cost shifting” from deceptive spammers to Internet business and email users has been likened to sending junk mail with postage due or making telemarketing calls to someone’s pay-per-minute cellular phone.
(i) Many spammers have become so adept at masking their tracks that they are rarely found, and are so technologically sophisticated that they can adjust their systems to counter special filters and other barriers against spam and can even electronically commandeer unprotected computers, turning them into spam-launching weapons of mass production.
(j) There is a need to regulate the advertisers who use spam, as well as the actual spammers, because the actual spammers can be difficult to track down due to some return addresses that show up on the display as “unknown” and many others being obvious fakes and they are often located offshore.
(k) There is a need to regulate the advertisers who use spam because they may obtain an unfair advantage over their competitors who engage in legitimate and lawful advertising practices.
(l) The true beneficiaries of spam are the advertisers who benefit from the marketing derived from the advertisements.
(m) In addition, spam is responsible for phishing and virus proliferation that can cause tremendous damage to people, individual computers, and to business systems. Merely opening spam can cause this damage as well as resulting in the recipient receiving more spam.
(n) Because of the above problems, it is necessary that spam be prohibited and that commercial advertising emails be regulated as set forth in this article.

SEC. 2.

 Section 17529.1 of the Business and Professions Code is amended to read:

17529.1.
 For the purpose of this article, the following definitions apply:
(a) “Advertiser” means a person or entity that advertises through the use of commercial email advertisements.
(b) “California electronic mail address” or “California email address” means any of the following:
(1) An email address furnished by an electronic mail service provider that sends bills for furnishing and maintaining that email address to a mailing address in this state.
(2) An email address ordinarily accessed from a computer located in this state.
(3) An email address furnished to a resident of this state.
(c) “Commercial email advertisement” means any electronic mail message initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, promotion, or other disposition of any property, goods, services, credit, stocks, bonds, sweepstakes, insurance, employment opportunities, extension of credit, or any other solicitation.
(d) “Direct consent” means that the recipient has expressly consented to receive email advertisements from the advertiser, either in response to a clear and conspicuous request for the consent or at the recipient’s own initiative.
(e) “Domain name” means any alphanumeric designation that is registered with or assigned by any domain name registrar as part of an electronic address on the Internet.
(f) “Electronic mail” or “email” means an electronic message that is sent to an email address and transmitted between two or more telecommunications devices, computers, or electronic devices capable of receiving electronic messages, whether or not the message is converted to hard copy format after receipt, viewed upon transmission, or stored for later retrieval. “Electronic mail” or “email” includes electronic messages that are transmitted through a local, regional, or global computer network.
(g) “Electronic mail address” or “email address” means a destination, commonly expressed as a string of characters, to which electronic mail can be sent or delivered. An “electronic mail address” or “email address” consists of a user name or mailbox and a reference to an Internet domain.
(h) “Electronic mail service provider” means any person, including an Internet service provider, that is an intermediary in sending or receiving electronic mail or that provides to end users of the electronic mail service the ability to send or receive electronic mail.
(i) “Initiate” means to transmit or cause to be transmitted a commercial email advertisement or assist in the transmission of a commercial email advertisement by providing electronic mail addresses where the advertisement may be sent, but does not include the routine transmission of the advertisement through the network or system of a telecommunications utility or an electronic mail service provider through its network or system.
(j) “Incident” means a single transmission or delivery to a single recipient or to multiple recipients of an unsolicited commercial email advertisement containing substantially similar content.
(k) “Internet” has the meaning set forth in paragraph (6) of subdivision (e) of Section 17538.
(l) “Preexisting or current business relationship,” as used in connection with the sending of a commercial email advertisement, means that the recipient has made an inquiry and has provided his or her email address, or has made an application, purchase, or transaction, with or without consideration, regarding products or services offered by the advertiser.
Commercial email advertisements sent pursuant to the exemption provided for a preexisting or current business relationship shall provide the recipient of the commercial email advertisement with the ability to “opt-out” from receiving further commercial email advertisements by calling a toll-free telephone number or by sending an “unsubscribe” email to the advertiser offering the products or services in the commercial email advertisement. This opt-out provision does not apply to recipients who are receiving free email service with regard to commercial email advertisements sent by the provider of the email service.
(m) “Recipient” means the addressee of, or the entity or person who received, an unsolicited commercial email advertisement. If an addressee of an unsolicited commercial email advertisement has one or more email addresses to which an unsolicited commercial email advertisement is sent, the addressee shall be deemed to be a separate recipient for each email address to which the email advertisement is sent.
(n) “Routine transmission” means the transmission, routing, relaying, handling, or storing of an electronic mail message through an automatic technical process. “Routine transmission” shall not include the sending, or the knowing participation in the sending, of unsolicited commercial email advertisements.
(o) “Unsolicited commercial email advertisement” means a commercial email advertisement sent to a recipient who meets both of the following criteria:
(1) The recipient has not provided direct consent to receive advertisements from the advertiser.
(2) The recipient does not have a preexisting or current business relationship, as defined in subdivision (l), with the advertiser promoting the lease, sale, rental, gift offer, or other disposition of any property, goods, services, or extension of credit.

SEC. 3.

 Section 17529.5 of the Business and Professions Code is amended to read:

17529.5.
 (a) It is the intent of the Legislature that this section, which prohibits falsity and deception contained in or accompanying commercial email messages and attachments, operates within the exceptions to the preemption provisions to the full extent permitted by the CAN-SPAM Act of 2003 (15 U.S.C. Sec. 7707(b)) and any other provision of federal law.
(b) It is unlawful for any person or entity to initiate, advertise in, or enable or assist a person or entity to initiate or advertise in, a commercial email advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances:
(1) The email advertisement contains or is accompanied by a third-party’s domain name or email address without the permission of the third party. party, provided that nothing in this section shall be construed to affect comparative advertising that references names, user names, domain names, or email addresses.
(2) The email advertisement contains or is accompanied by falsified, misrepresented, or forged information in the header, subject line, or body. This paragraph does not apply to truthful information used by a third party who has been lawfully authorized by the advertiser to use that information.
(3) The email advertisement has a subject line that is likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message.
(4) The party who initiates the email portrays itself as multiple parties by transmitting email advertisements from multiple domain names for no legitimate business reason other than to bypass spam filters. The defendant shall have the burden of proof to demonstrate legitimate business reasons for transmitting email advertisements from multiple domain names.
(5) The “from” name of the email advertisement is or does any of the following:
(A) Generic text that misrepresents who the email advertisement is from.
(B) Generic text that a reasonable consumer would not associate with the advertiser.
(C) A fictitious business name that the advertiser uses exclusively or primarily as the “from” name in email advertisements but has no other connection to the advertiser’s business.
(D) Purports to be from an individual but does not use the real name of the individual.
(6) The email advertisement’s headers show that it was sent from or purportedly sent from a domain name that was proxy registered or falsely registered so that a person searching a publicly available database such as WHOIS cannot readily determine the true identity of the party who initiated the email.
(7) The body of the email advertisement or the underlying source code contains nonsensical text unrelated to the advertiser’s business that is intended to bypass spam filters.
(8) The subject line begins with “re:” or anything substantially similar, or the subject line otherwise states that the email advertisement is being sent in response to a request or previous correspondence from the recipient, when the recipient made no such request.
(9) The subject line contains the word “free” or any language substantially similar to “free” if there are conditions attached, such as a required purchase in order to obtain the “free” goods or services, unless the subject line clearly indicates that there are conditions attached. A mere asterisk or other symbol, referring to conditions in the body of the email, does not satisfy the requirement set forth in this paragraph.
(c) Truthful content in or accompanying an email advertisement, including, but not limited to, identifying the sender in the body of an email advertisement, shall not cure false, misrepresented, or forged information in another part of an email advertisement.
(d) (1) (A) In addition to any other remedies provided by any other provision of law, the following may bring an action against a person or entity that violates any provision of this section:
(i) The Attorney General, a district attorney, or a city attorney.
(ii) An electronic mail service provider.
(iii) A recipient of an unsolicited commercial email advertisement, as defined in Section 17529.1.
(iv) A person or entity whose name, username, email address, or domain name appear in the “from” name or sender’s email address without permission from that person or entity.
(B) A person or entity bringing an action pursuant to subparagraph (A) may recover either or both of the following:
(i) Actual damages.
(ii) Liquidated damages of one thousand dollars ($1,000) for each unsolicited commercial email advertisement transmitted in violation of this section, up to one million dollars ($1,000,000) per incident.
(C) A recipient is not required to opt out of receiving the commercial email messages in order to bring a cause of action for a violation of this section. A defendant shall not assert any defense relying on the assertion that the recipient did not opt out. The remedy provided in this subdivision is a penalty and is intended to provide a disincentive to engage in unlawful advertising.
(D) The recipient, an electronic mail service provider, the Attorney General, district attorney, city attorney, or a person or entity whose name, username, email address, or domain name appear in the “from” name or sender’s email address without permission from that person or entity, if the prevailing plaintiff, may also recover reasonable attorney’s fees and costs.
(E) The court may enter an order enjoining a violation of this section.
(F) There shall not be a cause of action under this section against an electronic mail service provider that is only involved in the routine transmission of the email advertisement over its computer network.
(2) The court shall reduce the liquidated damages recoverable under paragraph (1) to a maximum of one hundred dollars ($100) for each unsolicited commercial email advertisement, or a maximum of one hundred thousand dollars ($100,000) per incident only upon a finding that the defendant has complied with, and has satisfied the burden of proof by demonstrating, all of the following:
(A) The defendant has established and implemented with due care practices and procedures reasonably designed to effectively prevent unsolicited commercial email advertisements that are in violation of this section.
(B) The defendant has consistently maintained and followed the practices and procedures.
(C) The defendant has provided its personnel with training regarding the practices and procedures.
(D) The defendant has maintained records demonstrating compliance with the practices and procedures.
(3) (A) A person who has brought an action against a party under this section shall not bring an action against that party under Section 17529.8 or 17538.45 for the same commercial email advertisement, as defined in subdivision (c) of Section 17529.1.
(B) A person who has brought an action against a party under Section 17529.8 or 17538.45 shall not bring an action against that party under this section for the same commercial email advertisement, as defined in subdivision (c) of Section 17529.1.
(e) A violation of this section is a misdemeanor, punishable by a fine of not more than one thousand dollars ($1,000), imprisonment in a county jail for not more than six months, or both that fine and imprisonment.
(f) The provisions of this section are severable. If any provision of this section or its application is held invalid, the invalidity shall not affect any other provision or application that can be given effect without the invalid provision or application.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.