Direct Marketers Take Note: FTC Announces First Action Targeting the Delivery of Text Messages

Morrison & Foerster LLP

On February 22, 2011, the Federal Trade Commission (FTC) announced that it had asked a federal judge to shut down an operation that allegedly delivered millions of unsolicited text messages to consumers.1 This is the first time the FTC has targeted the delivery of marketing via text message. It brought the enforcement action not pursuant to any law or rule specific to text messages – unlike the Federal Communications Commission (FCC), the FTC enforces no such law or rule2 – but, rather, using its unfairness authority under Section 5 of the FTC Act. An act or practice is “unfair” under Section 5 if it causes substantial injury to consumers, which consumers could not reasonably avoid, and it does not have countervailing benefits to consumers or competition.3 Here, the FTC has charged that the defendant’s alleged delivery of unsolicited text messages was unfair because it imposed substantial costs on recipients (depending on their plan, either they had to pay a fee to receive the message or their receipt of it reduced their monthly message allotment), which they could not reasonably avoid because the defendant allegedly continued to send messages to those who had requested that he stop.

The facts in this action are egregious. They include allegedly deceptive text message content, as well as violations of other laws. Nonetheless, the action puts all marketers on notice that they expose themselves to potential FTC enforcement – in addition to enforcement by the FCC, states, and private plaintiffs under FCC rules – if they do not conduct their text messaging campaigns with appropriate consents.

Please see full alert below for more information.

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Morrison & Foerster LLP

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