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Prepared Witness Testimony The House Committee on Energy and Commerce
Legislative Efforts to Combat Spam
Subcommittee on Commerce, Trade, and Consumer Protection
Ms. Paula Selis
My name is Paula Selis and I am Senior Counsel with the Washington State Attorney General's Office Consumer Protection Division. Led by our Attorney General, Christine Gregoire, Washington has been a pioneer in the fight against unlawful spam and was one of the first to pass a law in 1998 prohibiting false or misleading subject lines, headers and points of origin. Our law has survived a constitutional challenge that took us to the U.S. Supreme Court, and has been used as a successful enforcement tool not only by my office, but by ISP's and private individuals. But has it been enough to stop the onslaught of spam? It has not. Spam continues to be the number one source of consumer complaints to our office. It continues to bring pornography, phony get-rich-quick schemes, pyramid scams and computer viruses into our homes. One state cannot change the landscape. It is simply not enough of a deterrent to spammers that they might be sued in one, two, or even twelve states. As long as it's cheap to send spam, when even a 1% rate of return on millions of email messages yields a profit, spammers will make money and stay in business. That's why we need a strong federal law-to create a deterrent that reaches further than the states can go, to raise the cost of doing business for spammers so it's no longer profitable to operate. We must take the profit out of spam to take the spam out of our in-boxes. The bills currently before your committee must be viewed in light of this bottom line analysis-do they effectively deter spammers by raising their cost of doing business? Is the cost of violating the law high enough to force compliance with it? To accomplish these goals, the bills must not only create uncapped financial penalties for violations-they must also empower as many entities as possible to take action. Not only should states, ISP's and the FTC have the right to sue spammers under every cause of action under the law, so should private consumers who must bear the brunt of in-boxes filled with junk. The bills also need to create as many substantive protections as possible, and leave a clear path for states to take action when their laws are stronger. Causes of action for false subject lines and "dictionary attacks" where a domain can be overwhelmed by a flood of spam are essential. Mandatory identifier information as well as opt-out options are also essential. Criminal penalties, which the state of Virginia has pioneered, should be a fundamental part of the legislation. But there must be adequate civil enforcement ability to assure those substantive requirements are complied with. A comparison of two of the many bills under consideration demonstrates the relative strength of one over the other. While their aims are similar, HR 2515 provides more substantive protection, more enforcement options and more deterrent effect. HR 2515 not only requires the inclusion of identifier information in a piece of spam-it creates a cause of action for states and ISP's against a spammer who fails to comply. HR 2214 does not. Like many strong state laws, including Washington's, HR 2515 prohibits a common tactic for spammers-the use of false subject lines. HR 2214 does not. HR 2515 permits a state to sue a spammer who fails to honor an opt-out request. HR 2214 does not. The limitation on damages in HR 2214 is also problematic. The bill limits damages to $100 per violation, in contrast to the more effective deterrent level of $500 provided for in HR 2515. This limitation on per-violation damages in HR 2214 is compounded by the limitation on aggregate damages that can be obtained by a state enforcement authority. There is no reason to cap damages for violations involving hundreds of millions of spam. HR 2515 does not contain these limitations. Additionally, HR 2214 creates burdens on enforcement that are unprecedented in consumer protection statutes. While the bill prohibits a spammer from sending additional spam once a consumer has opted out of receiving it, a violation can only be demonstrated if the spammer knew or should have known of the opt-out request. This means an enforcement authority, such as the FTC, must prove the spammer's level of knowledge to prevail in court, a standard unknown under currently existing trade law. The level of knowledge required under HR 2214 to prove a civil violation is more akin to that of a criminal statute. In, contrast, HR 2515 does not create these barriers to civil enforcement. These differences as well as others in the two bills are surmountable and should not stand in the way of passing effective legislation. Our office will continue to work with staff to provide support and suggestions based on our experience with our own state law. Strong legislation is only one part of the solution. As a state attorney general's office, we believe that consumer education is also important, as is the advent of technology. If legislation is passed, it must be flexible enough to allow for new technologies that may ultimately be more effective than any law. There is no easy fix to this problem, and it will take all the tools we have to address it. In conclusion, we support the work of this committee in tackling the enormous and growing issue of spam. We urge you to pass a bill that is as strong as possible-that gives consumers and ISP's adequate substantive protections, and creates sufficient deterrence and meaningful enforcement mechanisms to take the profit out of spam.
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