Federal Trade Commission: Definitions and Implementation Under the CAN-SPAM Act

GAO-05-279R: Jan 28, 2005

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GAO reviewed the Federal Trade Commission's new rule on definitions and implementation under the CAN-SPAM Act. GAO found that (1) the rule would implement the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM") by defining the relevant criteria to determine the primary purpose of an electronic mail message, describe types of electronic mail messages that contain commercial content or what the Act terms "transactional or relationship" content and establish different criteria for each type, and also clarify that the definitions of certain terms taken from the Act and appearing in the rule are prescribed by particular referenced portions of the Act; and (2) the FTC complied with all applicable requirements in promulgating the rule.

Federal Trade Commission: Definitions and Implementation Under the CAN-SPAM Act, GAO-05-279R, January 28, 2005

B-295736

January 28, 2005

The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Committee on Commerce, Science, and Transportation
United States Senate

The Honorable Joe Barton
Chairman
The Honorable John D. Dingell
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

Subject: Federal Trade Commission: Definitions and Implementation Under the CAN-SPAM Act

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Federal Trade Commission (FTC), entitled Definitions and Implementation Under the CAN-SPAM Act (RIN: 3084-AA96). We received the rule on January 14, 2005. It was published in the Federal Register as a final rule on January 19, 2005. 70 Fed. Reg. 3110.

The final rule implements the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) by defining the relevant criteria to determine the primary purpose of an electronic mail message. The rule describes types of electronic mail messages that contain commercial content or what the Act terms transactional or relationship content, and establishes different criteria for each type. The rule also clarifies that the definitions of certain terms taken from the Act and appearing in the rule are prescribed by particular referenced portions of the Act.

Enclosed is our assessment of the FTCs compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Our review indicates that FTC complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210. The official responsible for GAO evaluation work relating to the subject matter of the rule is Norman Rabkin, Managing Director, Homeland Security and Justice. Mr. Rabkin can be reached at (202) 512-8777.

signed

Kathleen E. Wannisky
Managing Associate General Counsel

Enclosure

cc: Donald S. Clark
Secretary of the Commission
Federal Trade Commission

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY THE
FEDERAL TRADE COMMISSION
ENTITLED
"DEFINITIONS AND IMPLEMENTATION UNDER THE CAN-SPAM ACT"
(RIN: 3084-AA96)

(i) Cost-benefit analysis

The FTC did not perform a cost-benefit analysis of the final rule. According to the FTC, any costs attributable to CAN-SPAM are the result of the substantive requirements of the Act itself, not the interpretative final rule.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. 603-605, 607, and 609

The FTC prepared a Final Regulatory Flexibility Analysis and has concluded that the final rule will not impose an undue burden on small entities.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532-1535

As an independent regulatory and law enforcement agency, the FTC is not subject to title II of the Unfunded Mandates Reform Act of 1995.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. 551 et seq .

The final rule was issued using the notice and comment procedures found at 5 U.S.C. 553. On March 11, 2004, the FTC issued an Advance Notice of Proposed Rulemaking in the Federal Register. 69 Fed. Reg. 11776. In response, over 13,500 comments were received. On August 13, 2004, a Notice of Proposed Rulemaking was published in the Register. 69 Fed. Reg. 50091. The FTC received an additional 226 comments. The comments are discussed in the preamble to the final rule.

Paperwork Reduction Act, 44 U.S.C. 3501-3520

The final rule does not contain any information collections that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act.

Executive Order No. 12866

As an independent agency, the FTC is not subject to the review requirements of the order. However, OMB has determined that the final rule is a major rule under the Congressional Review Act.