FTC Votes Against Mandatory Spam Labeling

The FTC has recommended against adopting a mandatory label for spam like “ADV.” The FTC concluded that recipients have better filtering mechanisms for law-abiding emailers and the law will have no effect against law-breaker emailers. I think this quote sums it up:

“First, subject line labeling is unlikely to enhance the sophisticated ?ltering strategies that ISPs use and are constantly improving. Further, subject line labeling likely would have little value for ISPs because there is no reason to expect that outlaw spammers, who are already violating the CAN-SPAM Act and possibly other laws as well, would obey a subject line labeling requirement.

Second, there are other potential practical or technological problems with implementing a subject line labeling requirement. Third, and ?nally, mandatory subject line labeling would not contribute in any material way to the strengthening of anti-spam law enforcement.”

Therefore, the FTC favors email authentication over mandatory labels.

I agree with this conclusion, but I think it misses the point. I’m not a fan of arguments that we can’t control the lawbreakers, so let’s throw up our hands in futility. If there’s policy value to the disclosures, then they should be mandated and enforced.

Instead, in my opinion, the real problem with mandatory labels (a type of “metadata”) is that they are frequently imprecise, leading recipients to make erroneous judgments about the characterized content. In particular, the label “advertising” evokes very contradictory feelings among recipients: some advertising is valuable, but the class of advertising is generally perceived with suspicion and thus quickly discarded regardless of its utility. So the mandatory labeling may increase sorting mistakes.

In any case, I wonder if the FTC is willing to revisit its stance towards mandatory labeling of ads in other contexts, like paid search results. In the end, as I will argue in my next paper, content is either positive utility or negative utility, and each recipient determines that idiosyncratically. Labeling something as an ad does nothing to affect the content’s utility to the recipient, and as summary information to facilitate sorting, it’s a rather blunt label that can lead to increased errors in judgment. So I’d question all such mandatory labeling requirements across-the-board, not just in the spam context.