Posted on April 6, 2009 by Adam Snukal

Israel's Anti-Spam Legislation with a Kick - This Could Cost You!!

This post was written by Benjamin Waltuch, Adv.

Worldwide Anti-Spam legislation is now more than six years old. However, the amount of spam that we all receive daily continues to grow despite the installation of spam blocking software. The Israeli Knesset has approved an “Opt-In” anti spam statute in its communication law which was modeled after European Union’s Directive 2002/58/EC and requires affirmative permission before a commercial message is allowed. This is much more extreme than the CAN-SPAM Act in the US, which requires that a sender must provide a method to be removed from the mailing list or an “Opt-Out” method but does not require specific affirmative permission.

The “kick” is that the Israeli Anti-Spam Law provides for a minimum liquidated civil damage amount of approximately US$250 (one thousand New Israeli Shekels) PER EMAIL without any necessity to prove that the recipient was damaged in any way by the email. The law allows for a recipient to sue the sender in small claims court and also amended the Israeli class action law to allow for a cause of action under this anti spam statute to be certified for class actions. In addition, the statute provides for criminal fines of approximately $50,000 for sending emails without consent and approximately $17,000 for emails that do not follow the procedural requirements spelled out below. Finally, the law states that the individuals who comprise the management of a company are considered liable for any violation of the law with the civil penalty of approximately $17,000. Upon violation of the law by a company, it is presumed that the members of management of that company have not fulfilled their duty to keep the law.

The Israeli Law

The law provides that commercial message may be distributed in a commercial manner to encourage the purchase of a product or service or to encourage the transfer of money in another way. The law applies to emails, text messages and automated telephone calls.

There are a number of exceptions to this rule, which include where the recipient has previously consented (“Opted-in”) to receiving emails or where the recipient provided its information in the process of purchasing a similar product. In addition, the sender may send an email to businesses (but not individuals) asking for their permission to send additional emails provided that such email is only sent only one time. 

Moreover, the law provides that where a commercial email is permitted, there are strict guidelines of how to send any such message including the necessity to include in the message (1) the word “Advertisement” or equivalent in the heading of the message, (2) the name of the sender, and the method of contacting them including their telephone number, email address and fax number and (3) a method of opting not to receive such messages in the future.

Recent Class Actions

In 4 short months, actions for damages as well as large class actions have already been filed in Israeli courts. In February, Israeli portal Walla and its 30% shareholder were sued for 840 million NIS (approximately $210 million) for violations of this law. The Likud political party was sued for 100 million NIS (approximately $25 million) because its political emails linked to its website which has a section accepting political donations. While all of these cases are certainly in their early stages, we expect that the Israeli courts will have many more of these types of actions in the coming months.

Could this law be used against non-Israelis?

Foreign companies have asked whether this Israeli law will apply to Israeli recipients of spam sent by companies with no other nexus to Israel. While a case against a non- Israeli has not been publicized as of yet, the law is broadly written and we believe that Israeli courts will hold foreign companies to the Israeli standards if they direct their spam to Israel.

Israeli courts have held that emails or web browsing in the internet gambling arena is subject to Israeli law, especially when such websites or advertisements are directed at the Israeli public or are in Hebrew.  International courts, including those in New York, have also held that internet activity can be considered to be taking place in the local jurisdiction in the internet gambling arena and that the gambling companies must be held to local internet gambling laws. We would expect Israeli courts to specifically rule that the Israeli law applies when give the opportunity.

Admittedly, there are certainly various hurdles to initiating and then enforcing judgments by Israeli courts against non-Israeli companies. However, we believe that these hurdles are not insurmountable and that this risk should be considered before marketing products or services in Israel. 

Recommendations

Before targeting an Israeli market with commercial advertisements, make sure that you have complied with the Opt-in requirements of Israeli law. This is particularly important if you are advertising in Hebrew or sending many emails to Israelis domains, often with the suffix “.co.il” or “.il”. Keep a record of those who have agreed to receive such messages and comply with the content requirements. 

Benjamin Waltuch was a Reed Smith corporate associate in the New York office before moving with his family to Israel. He is currently a corporate partner at Gornitzky & Co., one of Israel's oldest and largest law firms, and is available to advise on Israeli law issues at waltuch@gornitzky.co.il.
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Posted on March 31, 2009 by Adam Snukal

Virginia Anti-Spam Law Stays Unconstitutional

In September 2008, the Virginia Supreme Court unanimously ruled that Virginia’s then-enacted anti-spam laws were per se unconstitutional on the grounds that they violated the First Amendment right of freedom of speech. At the time, Virginia’s anti-spam laws prohibited the sending of unwanted, unsolicited e-mails, both commercial and non-commercial.

The Virginia Supreme Court argued that since the law failed to make any distinction between the different types of emails a user could be sending, it would have prevented political, religious and other messages covered under the First Amendment, as well as general commercial solicitations. The court also noted that the statute failed to meet strict scrutiny, pointing out that similar anti-spam statutes had been enacted by several states, as well as by the federal government (which passed the CAN-SPAM Act in 2004), but all those statutes were narrowly tailored to target commercial spamming. Justice G. Steven Agee, who wrote the unanimous opinion for the court and cited a 1995 U.S. Supreme Court case, stated “The right to engage in anonymous speech, particularly anonymous political or religious speech, is ‘an aspect of the freedom of speech protected by the First Amendment.’” Along with the State Supreme Court striking down this law, its decision reversed the conviction of Jeremy Jaynes, the first person in the United States convicted of a felony for sending unsolicited bulk-emails. Jaynes was once considered one of the world’s most prolific spammers, sending mass emails anonymously by using false Internet addresses.

Immediately following this ruling in 2008, Virginia Attorney General Robert F. McDonnell promptly announced that he would appeal the case to the United States Supreme Court. Earlier today, the U.S. Supreme Court elected not to consider reinstating Virginia’s anti-spam law.

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Posted on October 16, 2008 by Douglas J. Wood

Va. Spam Law Ruled Unconstitutional; Spammer Conviction Overturned

The criminal conviction of Jeremy Jaynes—the first-ever such conviction under Virginia’s strict anti-spam law—has been vacated in a ruling in which Virginia’s highest court concluded that the law in question is unconstitutionally overbroad. Had Jaynes’ conviction stood, he could have served as much as nine years in prison.

Jaynes was convicted under the Virginia Computer Crimes Act of illegal spam for sending tens of thousands of unsolicited commercial emails to subscribers of America Online, Inc. (AOL). Jaynes allegedly falsified the header information and sender domain names before transmitting the emails in violation of the law. When investigators searched his home, they found electronic records containing the emails of some 1.3 billion users.

A resident of Raleigh, N.C., Jaynes was tried in Loudoun County, Va., where AOL had its headquarters at the time that the alleged spam was sent. He was convicted by a jury, and his conviction was upheld by a Virginia Court of Appeals.

But in September, the Virginia Supreme Court vacated Jaynes’ conviction, concluding that the statute was unconstitutionally overbroad because it “prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment to the United States Constitution.”

The Commonwealth of Virginia had argued that its statute only prohibits the transmission of unsolicited bulk email that is sent using falsified headers and domain names. The Commonwealth argued that there is no First Amendment right to use false identification to gain access to private servers.

But the Supreme Court rejected this argument. Private companies may have recourse for the trespass of their property, but the availability of this remedy is a separate issue from whether the government’s actions impact First Amendment rights, the court concluded.

The court then noted that Virginia’s law impinges on the Constitutional right to anonymous free speech. Because e-mail transmission protocol requires entry of an IP address and domain name, entering false information is the only way a sender can send an anonymous email, the court reasoned.

“The right to engage in anonymous speech, particularly anonymous political or religious speech, is ‘an aspect of the freedom of speech protected by the First Amendment,’” the court stated. The court further determined that statutes that burden “core political speech” must be narrowly tailored to further a compelling state interest.

Virginia’s statute—which applies to all unsolicited email with falsified headers and domain names—is not limited to “commercial or fraudulent transmission of email,” the court noted, “nor is it restricted to transmission of illegal or otherwise unprotected speech  such as pornography or defamation speech.”

Therefore, the statute is not “narrowly tailored” to protect the compelling interests of the Commonwealth, the court concluded.

In addition to arguing that Virginia’s law was unconstitutional, Jaynes claimed that the Commonwealth did not have jurisdiction to prosecute him. The Virginia Supreme Court, however, rejected this argument. But by sending email to AOL users, Jaynes was aware that he would be accessing AOL servers, the court noted.

Why This Matters:  The ruling generally favors email marketers because it recognizes that email is protected First Amendment speech, and that states seeking to regulate email transmission must meet the same tests for Constitutionality as with other forms of speech.  On the other hand, read broadly, this decision has serious ramifications with regard to the Constitutionality of the CAN-SPAM Act, the federal statute that also prohibits false header and domain name mailings.
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