Recent rulings by the Federal Communications Commission (FCC or Commission) on petitions involving the Telephone Consumer Protection Act (TCPA) suggest that the FCC will take a practical position to ensure that the TCPA does not block desired and expected communications, especially in non-telemarketing contexts, and reflect a movement toward the “common sense” approach to TCPA evaluation that several petitioners, such as the Retail Industry Leaders Association, have urged.
The FCC’s March 27 rulings make a welcome dent in its growing TCPA docket. Both rulings -- on petitions by Cargo Airlines Association (CAA) and GroupMe, Inc./Skype Communications -- discuss “prior express consent” for calls to wireless phones, as applied to package delivery notifications and a specific social networking platform, respectively.
TCPA litigation, including class action litigation, has increased 592 percent over the last several years, with more than 1,862 TCPA lawsuits filed in 2013 alone. This is no doubt due to the ambiguity surrounding many TCPA issues, including prior consent issues, combined with the TCPA’s private right of action, strict liability, and per call/per message penalties for violations.
This backdrop, in turn, has led to an increase in petitions seeking FCC clarification. TCPA generally prohibits calls to wireless phones made using an automatic telephone dialing system or prerecorded messages without prior express consent. Under a 2003 FCC decision, TCPA prohibitions also apply to text messages, a decision that Commissioner O’Rielly questioned in his concurring statements to these recent rulings, as he pointed out that text messaging did not exist when the TCPA was enacted in 1991.
Cargo Airlines Association (CAA) ORDER
In the CAA Order, the FCC ruled that package delivery notifications may be made to consumers on their wireless phones via calls or text messaging without prior express consent, so long as the consumer is not charged for the call and the call or text does not count against any limits in a consumer’s wireless plan. Certain other conditions also apply, including, for example, a prohibition on any advertising in conjunction with the notifications, and limitations on the number and length of the notifications. Consumers must also have the ability to opt out of notifications. The FCC warned that each of the required conditions must be applied to each notification in order for the new exemption to apply. Through this ruling, the Commission exercised, for the first time, its statutory authority to exempt calls to wireless phones that are not charged to the called party. The Commission was persuaded by the public interest benefits of allowing such notifications, including the reduction in package theft, and the benefit to consumers of receiving time sensitive alerts about the status of their deliveries.
GroupMe/Skype DECLARATORY Ruling
In the GroupMe/Skype Declaratory Ruling, the FCC clarified that when consumers consent to joining a text-based social network, the network can send non-telemarketing administrative text messages related to joining, even when that consent is not conveyed directly by the consumer joining the group, but is instead conveyed by a third person or intermediary. GroupMe provides a platform that allows users to organize consumer groups for texting. A group organizer must first register with GroupMe and agree to its terms of service, which require the organizer to represent that each listed group member has consented to participate and to receive text messages.
Once registration is complete, GroupMe sends up to four administrative text messages to each group member with pertinent information both about the group and about how to stop receiving texts. In its petition, GroupMe successfully argued that for these informational, non-telemarketing text messages, the Commission should allow consent via an intermediary because the alternative would be unduly burdensome. In evaluating the GroupMe petition, the FCC emphasized that the TCPA does not specify how consent for non-telemarketing, informational communications to wireless phones must be obtained. Rather, a caller or sender of text messages is left to determine the desired method for doing so. Accordingly, the FCC concluded that there is no prohibition on GroupMe obtaining prior express consent through an intermediary, such as the group organizer. By contrast, in 2012 the Commission ordered that telemarketing calls require prior express written consent, with precise requirements surrounding that consent.
Importantly, the Commission found that administrative texts such as those sent by GroupMe fall into the category of “normal business communications” and are “expected and desired” by consumers who have given their consent to the organizer to participate in a group facilitated by GroupMe. Thus, the goals of the TCPA would not be frustrated by allowing the organizer to convey the group members’ consent.
The FCC analogized the GroupMe scenario to its 2008 ACA Order in the debt collection context, in which the FCC decided that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” The FCC found that similarly, when a consumer agrees to participate in a GroupMe group and provides a wireless number for that purpose, the consumer also consents to be called or texted even for administrative purposes in connection with that group. Significantly, the FCC stated that “consent to be called at a number in conjunction with a transaction extends to a wide range of calls ‘regarding’ that transaction.” This clarification will be particularly helpful for other companies that engage in non-telemarketing, informational communications with consumers in connection with a particular transaction.
A Warning TO REMAIN VERY CAREFUL
While the Commission explained that it intended to “make sure the TCPA is not interpreted to inhibit communications consumers may want and that do not implicate the harms the TCPA was designed to prevent,” it also emphasized that where a company relies on a false assertion by an intermediary that consent was obtained, the company will still be liable for the TCPA violation.
Thus, the Commission warned GroupMe to “make absolutely clear to group organizers that they must obtain prior consent of each group member to receive texts.” The Commission also clarified that an intermediary can only relay consent given by the group member--an intermediary cannot provide consent on behalf of that member--and if that consent has not in fact been provided the message sender remains liable. As a result, we expect that social media platforms will be seeking indemnifications from group organizers and members. Similarly, the FCC warned in the CAA Ruling that calls “not in full conformance with the requirements” would not qualify for the new exemption, and would expose the caller to a risk of violating the TCPA.
Also, telemarketers need to remember that the Federal Trade Commission (FTC) also regulates telemarketing calls under the Telemarketing Sales Rule and Section 5 of the FTC Act, which prohibits “unfair or deceptive acts and practices.” While the FTC does not have jurisdiction over some communications providers, the FTC has jurisdiction over most telemarketers and sellers of consumer products and services.
Patton Boggs has extensive and recognized experience in advising clients on compliance with all aspects of the TCPA and its implementing regulations and has successfully represented clients before the FCC in connection with TCPA requirements and clarifications, as well as regarding enforcement and litigation issues. We also have deep experience in advising clients regarding the Federal Trade Commission’s Telemarketing Sales Rule and enforcement under the FTC Act. The firm is uniquely suited to assist clients with any questions concerning the implications of the FCC’s decisions, or the FTC’s perspectives, for a particular business or other application. Should you have any questions, please contact the authors of this Alert: Monica Desai (email@example.com); Paul Besozzi (firstname.lastname@example.org); Deborah Lodge (email@example.com); Koyulyn Miller (firstname.lastname@example.org).