Monday, August 06, 2007

Wireless Text Message Promotion Did Not Violate Federal Telephone Law

This posting was written by William Zale, editor of CCH Privacy Law in Marketing.

Publisher Simon & Schuster and mobile marketing firm ipsh!net (defendants) did not violate the Telephone Consumer Protection Act by sending a promotional message for the “Stephen King VIP Mobile Club” to the seven-year-old son of a cellular telephone customer, the federal district court in Oakland has ruled.

The customer had expressly consented to receive branded promotions of a ringtone provider (Nextones), and the message contained the phrase “PwdbyNexton,” the court noted. In addition, the promotional text messages to a targeted list of cellular telephone numbers were not subject to the Act’s prohibitions against the use of an “automatic telephone dialing system,” the court held.

The message, received by the customer’s son at half past midnight, read as follows:

“The next call you take may be your last... Join the Stephen King VIP Mobile Club at RplySTOP2OptOut. PwdByNexton.”

Consent to Branded Promotion

The customer had agreed to receive promotions from “Nextones affiliates and brands” when she obtained a ringtone from the Nextones website.

According to its privacy policy, Nextones maintained a strict “no-spam” policy and, absent prior consent, did not share personal profile information, including mobile phone numbers, with any “third party.”

The defendants conceded that Nextones’ website did not define “brands” and that it suggested that “affiliates” were those interested in selling mobile ringtones and graphics. The defendants pointed to no case law defining affiliates or brands as those terms related to the Telephone Consumer Protection Act (TCPA). They claimed that the customer’s causes of action under the TCPA failed as a matter of law because the text message at issue was identified as carrying the Nextones brand and because defendant ipsh!net was a Nextones affiliate.

The customer disagreed and argued that, although she consented to receive promotional messages from Nextones affiliates and brands, she did not consent to receive the text message at issue. She contended that the defendants were “third parties” under Nextones’ privacy policy. She further argued that phrase “PwdbyNexton” did not identify the Stephen King text message as a Nextones “brand.”

That argument, however, was contradicted by the facts, according to the court. “PwdbyNexton” branded the text message as coming from Nextones. Thus, while there might be a dispute of fact concerning whether the defendants were Nextones affiliates, there was no dispute of fact that the promotional text message at issue was identified with a Nextones brand. The customer had expressly consented to receive promotions of Nextones brands, in the court’s view.

Automatic Telephone Dialing System

The text message was not subject to the TCPA’s prohibitions against the use of an “automatic telephone dialing system” because the equipment used did not store, produce, or call randomly or sequentially generated telephone numbers, the court determined.

The TCPA defined an automatic telephone dialing system as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

The court rejected the customer’s contention that the equipment used to send the promotional message to the targeted list was an automatic telephone dialing system because it had the capacity to store numbers to be called and to dial numbers without human intervention, automatically making calls to thousands of numbers in a short period of time.

The decision, Satterfield v. Simon & Schuster, ND Cal., No. C 06–2893 CW, June 26, 2007, is reported at CCH Privacy Law in Marketing ¶60,091.

Marketing to Wireless Devices

Further information regarding marketing to wireless devices—including an explanation by D. Reed Freeman—can be found in the recently-launched CCH Privacy Law in Marketing, a monthly-updated reporter that combines treatise-style explanations with the full text of federal privacy laws and regulations, state privacy laws, and privacy laws and regulations from 35 foreign jurisdictions (provided in English translation).

To obtain further information about CCH Privacy Law in Marketing, call the CCH customer service department (1-800-248-3248) or visit the CCH Online Store ( and search the keyword “privacy.”

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