$90M Awarded In SMS Spam Case, Best Practices Anyone?

Rules, regulations and industry best practices are put in place for a reason, and nowhere are they more important then when it comes to anti-SPAM cases.  An emerging number of cases are being filed for violations of anti-SPAM laws regarding not only landline and cellphone call violations, but for SMS SPAM as well.

One such case is one involving a woman by the name of Laci Satterfield who, in 2007, sued Simon & Schuster in federal court in the Northern District of California for sending an unsolicited text message to her son’s cell phone that advertised the Stephen King horror book Cell.  Her attorneys claimed such text messages violated the Telephone Consumer Protection Act because they were sent through an automatic telephone dialing system. The suit, brought on behalf of a potential class of 60,000 people, sought between $500 and $1,500 for each unsolicited text message Simon & Schuster sent, meaning the publisher faced damages of up to $90 million.

While specific rules and regulations regarding SMS messages are still a bit ambiguous, Simon & Schuster claimed that it didn’t use an auto-dial system, and that no “calls” took place as defined by the federal law.  The company also claimed that Satterfield and other users had given consent by agreeing to the terms of ringtone downloads, and thus had opted-in to receiving further marketing messages.  Originally, Oakland federal district court judge Claudia Wilken sided with Simon & Schuster, though she did not rule on the question of whether a text message constitutes a telephone call- the most important aspect of the case.

On Friday, however, the Fifth Circuit reversed that original decision. The appellate court found that Judge Wilken erred when she ruled that no genuine and disputed issue existed regarding Simon & Schuster’s alleged use of an auto-dial system. The appellate panel also ruled that a text could be considered a call under Federal Communications Commission regulations.  It also held that, contrary to Simon & Schuster’s claim, Satterfield and others in the class did not give their permission to receive an unsolicited text message.  The case is now on remand.

This represents a large victory in regards to other similar cases that have more or less hinged on the outcome of this particular case and whether or not an SMS message can be regulated under the FCC like phone calls can.  While regulation is still evolving for this sort of thing, best practices were still very much violated, and completely overlooked by Simon & Schuster.  In other words, they should’ve known better.

Smaller companies and service-providers maintain strict guidelines when it comes to SMS messages, given the nature of the marketing tactic and the way they’re pushed to consumer’s mobile devices.  Larger companies and corporations, such as Simon & Schuster, have an even larger responsibility to adhere to not only the rules that are already put in place, but also the industry best practices that are more or less an unspoken set of regulations that everyone using the technology must abide by.

SMS-based marketing can be very successful when done properly, but this goes to show you that even the largest of corporations can be reprimanded for not keeping up with the best practices surrounding the technology they’re using, and violating the most simplest of rules- consumer privacy and consent.