Law Offices of John P. Connell, P.C.: In November 2012, it was reported that the venerable Papa John’s Pizza restaurant chain is facing a $250 Million Dollar lawsuit by its customers who claim they were “spammed” by Papa John’s as part of an overly aggressive social media campaign. In particular, the plaintiffs in the class action lawsuit alleged that Papa John’s franchises sent customers a total of 500,000 unwanted messages in early 2010. The complaint alleges the spam texts offered deals for pizza and some customers complained they were getting 15 or 16 texts in a row, even during the middle of the night. Franchisees in the restaurant chain apparently collected customer’s cell phone numbers when they would place an order and then a third party mass text messaging service provider (also a defendant in the lawsuit) would compile those cell phone numbers and send out the mass texts. The plaintiffs are seeking $500 per text, but they could be awarded up to $1,500 for each message if a jury rules that Papa John’s willfully broke the law.
Such can be the risks associated with the temptations of modern social media marketing techniques. Restaurants, therefore, should become generally familiar with the relevant law concerning this.
First, the Telephone Consumer Protection Act (TCPA) of 1991 bars companies from sending advertisements via text message or over telephone wires, without a consumer first opting into the service. In the past, this law has prohibited unsolicited facsimiles through the old-fashioned fax machine. Accordingly, in the cellular phone age, sending text messages without an enrollment program is highly risky under the law, as the defendants in the Papa John’s case have now learned. The TCPA provides steep damage awards for those companies that knowingly spam via cell phone text messaging.
Unsolicited e-mails are another issue under the law. In general, when a business sends out bulk emails from a purchased list or a list comprised of scraping the web, such e-mails are considered “unsolicited” vendor to customer solicitations, or “spam,” which the Federal Trade Commission can remedy by: (1) forcing loss of your account with your internet service provider; (2) the addition of your restaurant’s name to a list of consumer-protection spam-block lists; or (3) potential fines.
As of January 2004, the CAN-SPAM Act (15 U.S.C. § 7701 et seq.) became national law. The CAN-SPAM Act does not ban spam, nor bulk unsolicited emails outright, but provides a code of conduct to regulate commercial e-mail messaging practices. Stated in general terms, the CAN-SPAM Act prohibits such practices as transmitting messages with “deceptive subject headings” or “header information that is materially false or materially misleading.” The Act also imposes requirements regarding content, format, and labeling. For instance, unsolicited e-mail messages must include the sender’s physical postal address, indicate they are advertisements or solicitations, and notify recipients of their ability to decline further mailings. Moreover, in order to comply with the Act, each message must have either a functioning return e-mail address or a comparable mechanism that allows a recipient to “opt out” of future mailings.
The Act’s enforcement provision empowers the Federal Trade Commission, state attorneys general, and other state and federal agencies to pursue legal actions to enforce the Act’s provisions. Congress also provided a limited private right of action, which states a “provider of Internet access service adversely affected by a violation” of the above requirements “may bring a civil action in any district court” to enjoin further violation by a defendant or to recover either actual or statutory damages, whichever is greater. Statutory damages under the Act are substantial and can equal as much as $300 per unlawful e-mail. The Act also authorizes an award of attorneys’ fees and costs against any party at the district court’s discretion.
Whether unsolicited “tweets” through a Twitter Account can constitute a violation of the CAN-SPAM Act seems to be an unresolved issue. However, Twitter itself has been aggressive in Court against those users who “spam” other Twitter users based upon a violation of Twitter’s “terms of service” agreement, which all users agree to before being allowed to open a Twitter account. Twitter’s enforcement of its anti-spamming “terms of service” can therefore take the form of a “breach of contract” cause of action or other such common law claims.
A third federal statute to be concerned with is the Computer Fraud and Abuse Act (18 U.S.C. § 1030), which imposes liability on any party that “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains,” inter alia, “information from any protected computer.” Suits may be brought by any person who suffers damage or loss in an amount above $5000. This statute is important with respect to Facebook, as Facebook also requires its users to agree to a “terms of service” statement before it allows a Facebook account to be opened. For example, Facebook requires its customers to agree that users will refrain from automated scripts to collect information from, or otherwise interact with, the Facebook, and refrain from using Facebook for commercial use without the express permission of Facebook. Social media campaigns that scrape Facebook for friends and connections may therefore face the prospect of meeting Facebook in Court over alleged violations of the Computer Fraud and Abuse Act, should that campaign plan be considered in violation of Facebook’s anti-spamming policies.
The bottom line for restaurants to remember is to be highly prudent when sending notices or messages to its customers through the internet, by only doing so when the customer wants to receive such notices and has expressed permission to be included in that social media program. A restaurant should be wary about sending out so-called unsolicited notices or messages to its customers, either through its own compilation from whatever sources or through a service provider, unless such communications fall strictly in compliance with the federal laws governing “spam.”
© Law Offices of John P. Connell, P.C., 2012.