Many B2C companies are beginning to explore marketing to consumers’ wireless devices using text messaging (“SMS,” or “short message service”) and MMS messaging (“Multi-media Messaging Service”). They may even target their promotions based on where the recipient is physically located using the wireless device’s GPS technology. They also may target their promotions to teens and tweens. What legal issues should companies be aware of as they navigate through this relatively new area?

This question is very timely, as mobile marketing has received a lot of attention from regulators and industry organizations in the last few months.

Statutes. Statutorily, we have two federal laws that apply to mobile messaging: the Telephone Consumer Protection Act (the “TCPA”) and the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the “CAN-SPAM Act”). Each of these laws apply to mobile promotional messaging, depending on the technology used to send the messages. We also have a host of state laws that apply, either expressly or implicitly, to mobile promotional messaging. In summary, the laws require that companies obtain express consent from individuals before sending promotional messages to their wireless devices. In some cases, specific consent language is required.

Mobile Marketing Association Guidelines. In addition to statutes, we also have various industry standards that apply to text messaging campaigns. The Mobile Marketing Association (MMA), for example, has a set of Consumer Best Practices Guidelines for mobile marketing, which is incorporated by reference into the carrier agreements under which short codes are issued by carriers to companies that want to launch text messaging campaigns. These best practices provide, among other things, requirements for consumer notices, consent and opt-out rights.
Wireless Association Standards for Location-based Marketing. The CTIA (The Wireless Association) recently issued a set of best practices that provide for, among other things, consumer notice and consent for location-based marketing, and consumer choice for sharing of location information with third parties. These guidelines also address retention and security of location-based information, abuse reporting and public self-certification of compliance with the best practices. (Self-certification, in itself, presents its own set of legal issues.)
Federal Trade Commission. Just this past May, the Federal Trade Commission (FTC) hosted a public town hall meeting, “Beyond Voice: Mapping the Mobile Marketplace.” Topics discussed included the evolution and future of mobile marketing, location-based marketing, consumer disclosures and consents, the challenges of small PDA screens for consumer notifications, teen and tween-targeted campaigns, parental controls and security issues with respect to data stored on mobile devices. Also in May, two consumer advocacy groups (the Center for Digital Democracy and the U.S. Public Interest Research Group) announced their plan to file a complaint with the FTC, asking it to examine behavioral advertising via mobile devices and to promulgate special rules regulating mobile marketing to children and teens.
It is reasonable to anticipate that the FTC will ultimately issue either guidelines or rules which apply to mobile marketing campaigns, in an attempt to set forth uniform requirements for mobile marketing. Until then, companies must navigate and synthesize the various sources of applicable laws and standards, and derive an approach that meets their business objective while avoiding backlash from the media, the industry, the wireless carriers and consumers.