You say you want marketing news and commentary? Well, you came to the right place. The Big Fat Marketing Blog is updated daily by the editors of Chief Marketer, Direct, Promo and Multichannel Merchant. Opinions? Oh yeah, we got em'. Don't say we didn't warn ya'.

Voice or No Voice, SMS is a Call, Courts Say

04-11-10-robots.jpgWhen it comes to mobile-marketing and permissions, it doesn’t pay to take anything for granted—including the meanings of the words “call” and “consent”.

A federal judge ruled last week against dismissing a lawsuit against Twentieth-Century Fox for violating the Telephone Consumer Protection Act, thereby allowing a suit to proceed against the studio for sending a consumer a text message he didn’t opt into.

The decisions is the latest in a string of recent cases exploring the gray area of whether a law set up to ban robo-calls can be used by the Federal Communications Commission to police the explosion of text messaging campaigns.

Here’s the situation, as outlined in the suit brought by one Victor Lozano. Back in 2005, Twentieth-Century Fox’s retail division was sending out text messages advertising the release of its animated movie “Robots” on DVD. (Yes, the irony is there to be found.) Lozano alleges he received one of the messages on his mobile phone, and more messages in the ensuing weeks, even though he had not given Fox permission to message him in that way.

The grounds for the suit, which is seeking to become a class action, are that in texting him without permission, Fox violated the TCPA, a law that Congress enacted back in 1991 prohibiting using an autodialer (or any kind of mechanical number generator) to place calls without the recipient’s permission. Back in those days, the aim was to prevent those recorded calls that would keep dialing a number until the complete message had been delivered; the rationale was that users were prevented from using their phones for other purposes—such as calling emergency services—while the automated call was completing.

The Lozano suit contends that reaching someone’s mobile phone with a text message they did not agree to accept also constitutes a TCPA violation.

At first, Fox tried to argue that an SMS message is not a “call” and thus isn’t covered by the TCPA. But a judge in the Northern District of Illinois ruled that the law applies to any communication using a phone, text messages correctly fall under the FCC’s interpretation of a “call”. The court also found that it was not necessary for the plaintiff to be charged for the unwanted messages for a violation to have occurred.

And for good measure, it added that it was not necessary either to allege that an automated dialing system was used to send the text messages—only that the system used “has the capacity to store or produce telephone numbers,” even if that capacity was not used in the actual violation. So Lozano does not have to prove that he received the messages because a number-crunching autodialer generated his mobile address.

It’s the latest in a number of legal rulings that add up to one thing: When you’re using text messaging for any reason including marketing products or service, make sure to get explicit permission first.

And make sure that permission is built on solid legal wording. Otherwise you could wind up like Simon & Shuster. The publisher was served in a 2007 class-action lawsuit about unpermissioned text messages and TCPA violations from a mobile campaign to promote the Stephen King mobile-themed thriller “Cell”. In that case, a woman downloaded a ringtone to her cell phone from a third-party provider, Nextones, and soon found herself receiving messages from the publisher about the King book. She opted to bring suit.

Besides arguing that SMS messages aren’t calls and thus don’t fall under that law, Simon & Shuster also contended that the recipients who downloaded a special ringtone meant to promote Stephen King’s book “Cell” (irony alert #2!) had, in agreeing to the terms of the download, also given their consent to accept marketing messages from the publisher.

A District Court judge originally dismissed the suit agreeing with Simon & Shuster’s contention that SMS messaging was not “calling”. But an appellate court disagreed last July, and the suit is back on the docket.

There have been other recent judicial decisions affirming that text messages are indeed calls and subject to TCPA enforcement under the FCC’s jurisdiction. It’s virtually established, and from this point on, arguing the status of SMS campaigns will be nothing more than an excuse for a motion to dismiss.

What’s more interesting is what these mobile spam cases say about the mindset of some marketers and how little they understand the human dimensions of mobile technology.

There’s a certain small but persistent contigent in the marketing community that believes the offer trumps everything–that if you offer people something you think they want, even if they didn’t ask for it, enough will opt in to make the effort worthwhile, while the rest at least won’t raise hell. In e-mail, where most people just delete unsolicited messages or ignore them until their ISP removes them, this works after a fashion, as long as your spamming doesn’t reach Sanford “Spam King” Wallace proportions. In the majority of cases, recipients probably assume they mistakenly agreed to receive the messages and simply shrug them off.

But spamming messages won’t wash in mobile, even at that minimal level. Users are much, much more protective of the privacy of their mobile phones than they are of the sanctity of their e-mail in-boxes. And unlike e-mail– where users can scan subject lines, make the spam/no spam call in an instant, and simply ignore the message– SMS gets read, very often within 15 minutes of its arrival.

Spam people in e-mail and –apart from breaking the law—you’ve only wasted a few kilobytes of their bandwidth. Tick them off on their handsets, and you’ve wasted their time and invaded the private channel they reserve for family, friends and trusted brands. And you risk turning some of them into pretty irate plaintiffs.

The Simon & Shuster case contains an additional element in the actual wording of the consent, which the appeals court found unclear: “Yes! I would like to receive promotions from Nextones affiliates and brands. Please note, that by declining you may be ineligible for our FREE content.”

Eric Goldman, an associate law professor at Santa Clara University, points out in his blog that the average user is not necessarily going to know who falls under the rubric of “Nextones affiliates and brands.” As the court noted, elsewhere on the site Nextones defines affiliates as other companies that “sell mobile content such as ringtones and graphics”—a poorly drawn definition that certainly doesn’t apply to Simon & Shuster.

He also contends that a convoluted distribution chain might have contributed to the unpermissioned SMS problem in this case. As Goldman lays it out, Nextones gathered the ringtone opt-ins and sent them to MIA, described in the court documents as its “exclusive agent for licensing the numbers of Nextones subscribers.” MIA transmitted the numbers to mobile marketing agency ipsh!, which in turn gave them to mBlox, a mobile aggregator that acts as go-between to manage and oversee the delivery of text messages over wireless carriers’ networks.

“This complex chain creates a sizeable risk that one or more of the entities along the way would misinterpret or forget any restrictions on the customer’s grant of permissions,” Goldman says. “Certainly I can’t figure out how Nextones/MIA thought this distribution chain fit within the checkbox consent it asked for and received. (Interestingly, neither Nextones nor MIA are defendants in the case.)”

“Better drafting [of the consent notice] could easily have avoided this problem and probably would have had little effect on conversion rates,” Goldman writes.

Not being a lawyer, I’m a bit more cynical. I think it’s conceivable the Nextones counsel purposely drafted a very broad consent form, thinking that would give them the legal cover to share the names and numbers collected with the widest possible group of outside mobile marketers such as Simon & Shuster. Again, that happens often enough in e-mail marketing.

All these cases suggest that brands can’t market to users via mobile without getting some explicit opt-ins and can’t skip the due diligence involved in making sure those users are properly permissioned. Simon & Shuster probably thought it was purchasing the right to market to the people who contracted with Nextone.

Now they’re in the legal crosshairs. After all, no one’s suing Nextone or MIA for a possible $90 million judgment.

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You say you want marketing news and commentary? Well, you came to the right place. The Big Fat Marketing Blog is updated daily by the editors of Chief Marketer, Direct, Promo and Multichannel Merchant. Opinions? Oh yeah, we got em'. Don't say we didn't warn ya'.

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