(Enrolled as Agreed to or Passed by Both House and Senate)
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SECTION 6. BUSINESSES KNOWINGLY PROMOTED BY ELECTRONIC MAIL WITH FALSE OR
MISLEADING TRANSMISSION INFORMATION.
(a) IN GENERAL- It is unlawful for a person to promote, or allow the
promotion of, that person's trade or business, or goods, products, property,
or services sold, offered for sale, leased or offered for lease, or
otherwise made available through that trade or business, in a commercial
electronic mail message the transmission of which is in violation of section
5(a)(1) if that person--
(1) knows, or should have known in the ordinary course of that person's
trade or business, that the goods, products, property, or services sold,
offered for sale, leased or offered for lease, or otherwise made
available through that trade or business were being promoted in such a
message;
(2) received or expected to receive an economic benefit from such
promotion; and
(3) took no reasonable action--
(A) to prevent the transmission; or
(B) to detect the transmission and report it to the Commission.
(b) Limited Enforcement Against Third Parties-
(1) IN GENERAL- Except as provided in paragraph (2), a person
(hereinafter referred to as the `third party') that provides goods,
products, property, or services to another person that violates
subsection (a) shall not be held liable for such violation.
(2) EXCEPTION- Liability for a violation of subsection (a) shall be
imputed to a third party that provides goods, products, property, or
services to another person that violates subsection (a) if that third
party--
(A) owns, or has a greater than 50 percent ownership or economic
interest in, the trade or business of the person that violated
subsection (a); or
(B)(i) has actual knowledge that goods, products, property, or
services are promoted in a commercial electronic mail message the
transmission of which is in violation of section 5(a)(1); and
(ii) receives, or expects to receive, an economic benefit from such
promotion.
(c) EXCLUSIVE ENFORCEMENT BY FTC- Subsections (f) and (g) of section 7 do
not apply to violations of this section.
(d) SAVINGS PROVISION- Except as provided in section 7(f)(8), nothing in
this section may be construed to limit or prevent any action that may be
taken under this Act with respect to any violation of any other section of
this Act.
SECTION 7. ENFORCEMENT GENERALLY.
(a) VIOLATION IS UNFAIR OR DECEPTIVE ACT OR PRACTICE- Except as provided in
subsection (b), this Act shall be enforced by the Commission as if the
violation of this Act were an unfair or deceptive act or practice proscribed
under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)).
(b) ENFORCEMENT BY CERTAIN OTHER AGENCIES- Compliance with this Act shall be
enforced--
(1) under section 8 of the Federal Deposit Insurance Act (12 U.S.C.
1818), in the case of--
(A) national banks, and Federal branches and Federal agencies of
foreign banks, by the Office of the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national
banks), branches and agencies of foreign banks (other than Federal
branches, Federal agencies, and insured State branches of foreign
banks), commercial lending companies owned or controlled by foreign
banks, organizations operating under section 25 or 25A of the
Federal Reserve Act (12 U.S.C. 601 and 611), and bank holding
companies, by the Board;
(C) banks insured by the Federal Deposit Insurance Corporation
(other than members of the Federal Reserve System) and insured State
branches of foreign banks, by the Board of Directors of the Federal
Deposit Insurance Corporation; and
(D) savings associations the deposits of which are insured by the
Federal Deposit Insurance Corporation, by the Director of the Office
of Thrift Supervision;
(2) under the Federal Credit Union Act (12 U.S.C. 1751 et seq.) by the
Board of the National Credit Union Administration with respect to any
Federally insured credit union;
(3) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) by
the Securities and Exchange Commission with respect to any broker or
dealer;
(4) under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.)
by the Securities and Exchange Commission with respect to investment
companies;
(5) under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.)
by the Securities and Exchange Commission with respect to investment
advisers registered under that Act;
(6) under State insurance law in the case of any person engaged in
providing insurance, by the applicable State insurance authority of the
State in which the person is domiciled, subject to section 104 of the
Gramm-Bliley-Leach Act (15 U.S.C. 6701), except that in any State in
which the State insurance authority elects not to exercise this power,
the enforcement authority pursuant to this Act shall be exercised by the
Commission in accordance with subsection (a);
(7) under part A of subtitle VII of title 49, United States Code, by the
Secretary of Transportation with respect to any air carrier or foreign
air carrier subject to that part;
(8) under the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.)
(except as provided in section 406 of that Act (7 U.S.C. 226, 227)), by
the Secretary of Agriculture with respect to any activities subject to
that Act;
(9) under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) by the
Farm Credit Administration with respect to any Federal land bank,
Federal land bank association, Federal intermediate credit bank, or
production credit association; and
(10) under the Communications Act of 1934 (47 U.S.C. 151 et seq.) by the
Federal Communications Commission with respect to any person subject to
the provisions of that Act.
(c) EXERCISE OF CERTAIN POWERS- For the purpose of the exercise by any
agency referred to in subsection (b) of its powers under any Act referred to
in that subsection, a violation of this Act is deemed to be a violation of a
Federal Trade Commission trade regulation rule. In addition to its powers
under any provision of law specifically referred to in subsection (b), each
of the agencies referred to in that subsection may exercise, for the purpose
of enforcing compliance with any requirement imposed under this Act, any
other authority conferred on it by law.
(d) ACTIONS BY THE COMMISSION- The Commission shall prevent any person from
violating this Act in the same manner, by the same means, and with the same
jurisdiction, powers, and duties as though all applicable terms and
provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were
incorporated into and made a part of this Act. Any entity that violates any
provision of that subtitle is subject to the penalties and entitled to the
privileges and immunities provided in the Federal Trade Commission Act in
the same manner, by the same means, and with the same jurisdiction, power,
and duties as though all applicable terms and provisions of the Federal
Trade Commission Act were incorporated into and made a part of that
subtitle.
(e) AVAILABILITY OF CEASE-AND-DESIST ORDERS AND INJUNCTIVE RELIEF WITHOUT
SHOWING OF KNOWLEDGE- Notwithstanding any other provision of this Act, in
any proceeding or action pursuant to subsection (a), (b), (c), or (d) of
this section to enforce compliance, through an order to cease and desist or
an injunction, with section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii),
or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3),
neither the Commission nor the Federal Communications Commission shall be
required to allege or prove the state of mind required by such section or
subparagraph.
(f) Enforcement by States-
(1) CIVIL ACTION- In any case in which the attorney general of a State,
or an official or agency of a State, has reason to believe that an
interest of the residents of that State has been or is threatened or
adversely affected by any person who violates paragraph (1) or (2) of
section 5(a), who violates section 5(d), or who engages in a pattern or
practice that violates paragraph (3), (4), or (5) of section 5(a), of
this Act, the attorney general, official, or agency of the State, as
parens patriae, may bring a civil action on behalf of the residents of
the State in a district court of the United States of appropriate
jurisdiction--
(A) to enjoin further violation of section 5 of this Act by the
defendant; or
(B) to obtain damages on behalf of residents of the State, in an
amount equal to the greater of--
(i) the actual monetary loss suffered by such residents; or
(ii) the amount determined under paragraph (3).
(2) AVAILABILITY OF INJUNCTIVE RELIEF WITHOUT SHOWING OF KNOWLEDGE-
Notwithstanding any other provision of this Act, in a civil action under
paragraph (1)(A) of this subsection, the attorney general, official, or
agency of the State shall not be required to allege or prove the state
of mind required by section 5(a)(1)(C), section 5(a)(2), clause (ii),
(iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section
5(b)(3).
(A) IN GENERAL- For purposes of paragraph (1)(B)(ii), the amount
determined under this paragraph is the amount calculated by
multiplying the number of violations (with each separately addressed
unlawful message received by or addressed to such residents treated
as a separate violation) by up to $250.
(B) LIMITATION- For any violation of section 5 (other than section
5(a)(1)), the amount determined under subparagraph (A) may not
exceed $2,000,000.
(C) AGGRAVATED DAMAGES- The court may increase a damage award to an
amount equal to not more than three times the amount otherwise
available under this paragraph if--
(i) the court determines that the defendant committed the
violation wilfully and knowingly; or
(ii) the defendant's unlawful activity included one or more of
the aggravating violations set forth in section 5(b).
(D) REDUCTION OF DAMAGES- In assessing damages under subparagraph
(A), the court may consider whether--
(i) the defendant has established and implemented, with due
care, commercially reasonable practices and procedures designed
to effectively prevent such violations; or
(ii) the violation occurred despite commercially reasonable
efforts to maintain compliance the practices and procedures to
which reference is made in clause (i).
(4) ATTORNEY FEES- In the case of any successful action under paragraph
(1), the court, in its discretion, may award the costs of the action and
reasonable attorney fees to the State.
(5) RIGHTS OF FEDERAL REGULATORS- The State shall serve prior written
notice of any action under paragraph (1) upon the Federal Trade
Commission or the appropriate Federal regulator determined under
subsection (b) and provide the Commission or appropriate Federal
regulator with a copy of its complaint, except in any case in which such
prior notice is not feasible, in which case the State shall serve such
notice immediately upon instituting such action. The Federal Trade
Commission or appropriate Federal regulator shall have the right--
(A) to intervene in the action;
(B) upon so intervening, to be heard on all matters arising therein;
(C) to remove the action to the appropriate United States district
court; and
(D) to file petitions for appeal.
(6) CONSTRUCTION- For purposes of bringing any civil action under
paragraph (1), nothing in this Act shall be construed to prevent an
attorney general of a State from exercising the powers conferred on the
attorney general by the laws of that State to--
(A) conduct investigations;
(B) administer oaths or affirmations; or
(C) compel the attendance of witnesses or the production of
documentary and other evidence.
(7) VENUE; SERVICE OF PROCESS-
(A) VENUE- Any action brought under paragraph (1) may be brought in
the district court of the United States that meets applicable
requirements relating to venue under section 1391 of title 28,
United States Code.
(B) SERVICE OF PROCESS- In an action brought under paragraph (1),
process may be served in any district in which the defendant--
(ii) maintains a physical place of business.
(8) LIMITATION ON STATE ACTION WHILE FEDERAL ACTION IS PENDING- If the
Commission, or other appropriate Federal agency under subsection (b),
has instituted a civil action or an administrative action for violation
of this Act, no State attorney general, or official or agency of a
State, may bring an action under this subsection during the pendency of
that action against any defendant named in the complaint of the
Commission or the other agency for any violation of this Act alleged in
the complaint.
(9) REQUISITE SCIENTER FOR CERTAIN CIVIL ACTIONS- Except as provided in
section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of
section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), in a civil
action brought by a State attorney general, or an official or agency of
a State, to recover monetary damages for a violation of this Act, the
court shall not grant the relief sought unless the attorney general,
official, or agency establishes that the defendant acted with actual
knowledge, or knowledge fairly implied on the basis of objective
circumstances, of the act or omission that constitutes the violation.
(g) Action by Provider of Internet Access Service-
(1) ACTION AUTHORIZED- A provider of Internet access service adversely
affected by a violation of section 5(a)(1), 5(b), or 5(d), or a pattern
or practice that violates paragraph (2), (3), (4), or (5) of section
5(a), may bring a civil action in any district court of the United
States with jurisdiction over the defendant--
(A) to enjoin further violation by the defendant; or
(B) to recover damages in an amount equal to the greater of--
(i) actual monetary loss incurred by the provider of Internet
access service as a result of such violation; or
(ii) the amount determined under paragraph (3).
(2) SPECIAL DEFINITION OF `PROCURE'- In any action brought under
paragraph (1), this Act shall be applied as if the definition of the
term `procure' in section 3(12) contained, after `behalf' the words
`with actual knowledge, or by consciously avoiding knowing, whether such
person is engaging, or will engage, in a pattern or practice that
violates this Act'.
(A) IN GENERAL- For purposes of paragraph (1)(B)(ii), the amount
determined under this paragraph is the amount calculated by
multiplying the number of violations (with each separately addressed
unlawful message that is transmitted or attempted to be transmitted
over the facilities of the provider of Internet access service, or
that is transmitted or attempted to be transmitted to an electronic
mail address obtained from the provider of Internet access service
in violation of section 5(b)(1)(A)(i), treated as a separate
violation) by--
(i) up to $100, in the case of a violation of section 5(a)(1);
or
(ii) up to $25, in the case of any other violation of section 5.
(B) LIMITATION- For any violation of section 5 (other than section
5(a)(1)), the amount determined under subparagraph (A) may not
exceed $1,000,000.
(C) AGGRAVATED DAMAGES- The court may increase a damage award to an
amount equal to not more than three times the amount otherwise
available under this paragraph if--
(i) the court determines that the defendant committed the
violation wilfully and knowingly; or
(ii) the defendant's unlawful activity included one or more of
the aggravated violations set forth in section 5(b).
(D) REDUCTION OF DAMAGES- In assessing damages under subparagraph
(A), the court may consider whether--
(i) the defendant has established and implemented, with due
care, commercially reasonable practices and procedures designed
to effectively prevent such violations; or
(ii) the violation occurred despite commercially reasonable
efforts to maintain compliance with the practices and procedures
to which reference is made in clause (i).
(4) ATTORNEY FEES- In any action brought pursuant to paragraph (1), the
court may, in its discretion, require an undertaking for the payment of
the costs of such action, and assess reasonable costs, including
reasonable attorneys' fees, against any party.
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