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FTC Action Highlights Importance of Mobile Marketing Compliance

5 Apr, 2011 By: Mikhia E. Hawkins, Jeffrey D. Knowles, Venable LLP’s Advertising


The Federal Trade Commission’s (FTC) move last month to freeze the assets of a marketer alleged to have blasted consumers with millions of illegal spam text messages highlights the need to be mindful of the law and regulations that govern mobile marketing.

The proliferation of mobile devices, such as smartphones and tablets, presents tremendous opportunities for marketers to directly reach consumers on the go, at home, in the office and at the point of sale. Some marketers underestimate the amount of regulation in the mobile space. That is a mistake because federal and state regulators as well as private plaintiffs are increasingly aggressive.

Federal Laws
The FTC and the Federal Communications Commission (FCC) are the primary federal regulators of mobile marketing. The FCC’s Telephone Consumer Protection Act (TCPA) prohibits all calls to wireless devices made using an automatic telephone dialing system or an artificial or pre-recorded voice unless the recipient has provided prior express consent or there is an emergency situation.

The FCC and courts have stated that the FCC’s rules regarding calls to wireless devices apply to both voice and text calls, including short message service (SMS) calls and text messages. FCC regulations also apply to Mobile Service Commercial Messages (MSCMs). MSCMs that are ultimately delivered to wireless devices may be considered “calls” under applicable FCC regulations. The FCC has proposed harmonizing its TCPA regulations with the FTC’s Telemarketing Sales Rule (TSR), which requires markets make certain disclosures and provide a specific type of opt-out mechanism.

The CAN-SPAM Act also applies to commercial E-mail messages, including text, SMS, and MSCMs. The Act prohibits sending commercial E-mail messages to wireless devices unless the recipient has provided prior express authorization to receive such messages. Consent is interpreted very narrowly and does not necessarily extended to affiliates or partners or entitle the sender to disseminate messages on behalf of third parties. The Act prohibits false or misleading subject lines or “header” information. It also requires specific disclosures and that an opt-out mechanism is provided.

Additionally, FTC and FCC Do Not Call rules prohibit telephone solicitation calls to any residential telephone number, including any non-business wireless number, that is registered on the National Do Not Call Registry, unless the consumer has provided express written consent or the marketer has an established business relationship with the recipient.

State Laws
Several states have laws applicable to mobile marketing, including laws governing telemarketing, E-mail marketing, and advertising generally. The Florida Attorney General in particular has been very active in bringing enforcement actions against mobile marketers. In addition, many state laws may be enforced by individual consumers and through class-action litigation.

Industry Standards
The Mobile Marketing Association’s (MMA) Consumer Best Practices Guidelines outlines best practices for a wide range of mobile marketing activities. The Direct Marketing Association’s (DMA) Guidelines for Ethical Business Practice provides comprehensive guidelines for ethical and legal conduct for various types of direct marketing, including mobile marketing. The CTIA (The Wireless Association) also has guidelines relating to mobile marketing, although they primarily address the obligations of wireless carriers.

Mobile marketing presents tremendous opportunity but it is not without legal risk. Marketers should be mindful of the regulatory “lay of the land” to help effectively mitigate such risks and protect their business interests.

Jeffrey D. Knowles is a partner at Venable LLP and chair of the firm’s Advertising, Marketing and New Media Group. Mikhia Hawkins is an associate at Venable LLP. They can be reached at (202) 344-4000, or via E-mail at jdknowles@venable.com and mhawkins@Venable.com.


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