The Direct Marketing Association's new policy of requiring its members to honor consumers' requests to be taken off mail and phone solicitation lists would not violate federal antitrust laws, staff of the Federal Trade Commission have informed the Association. The FTC staff further stated that two other elements of DMA's policy -- to require as a condition of membership that direct marketers disclose to consumers whether and how they disseminate information about their customers and, upon request, to refrain from transferring customer information to others -- also pose no antitrust problem.
The FTC staff letter, signed by Michael D. McNeely, an Assistant Director in the FTC's Bureau of Competition, responds to a request from DMA counsel for a staff advisory opinion on the policy. Under the plan, participation in DMA's Mail Preference Service and Telephone Preference Service would be a condition of membership. These two services allow consumers who do not wish to receive direct mail advertising or telemarketing calls from DMA members to place their names on a list. DMA members who participate in the services remove the names of consumers on the list from their own mailing or calling lists. In the past, member participation in the preference services was optional.
Approximately 3.3 million names are on the Mail Preference Service list, and about 600,000 are on the Telephone Preference Service list. Consumers who wish to place their names on these lists can do so by sending names, addresses, and phone numbers to either:
Telephone Preference Service
PO Box 1559
Carmel, NY 10512
Mail Preference Service
PO Box 643
Carmel, NY 10512
The other provisions of the DMA policy call for members to disclose to their customers their practices with regard to the information obtained from consumers. These provisions require members to disclose to consumers that they have the option to prevent future solicitations and the sale or disclosure of personal information about them, and to refrain from selling or otherwise transferring information about their customers upon those customers' request.
While restrictions on soliciting consumers can be anticompetitive, the FTC staff letter states that, in this case, the requirements to participate in the MPS and TPS and to refrain from using or selling customer names are unlikely to restrict competition. The letter notes that these requirements would comply with the wishes of consumers who have taken affirmative steps to avoid receiving direct marketing information, rather than effectuating an agreement among competitors to withhold information that the competitors conclude is unwanted or unneeded by consumers. Therefore, the staff letter states, these provisions are unlikely to restrict competition significantly, in violation of antitrust laws. The staff also noted that the disclosure requirement could be satisfied with a brief disclosure and so would not be so burdensome as to discourage direct marketing competition. The letter also states that the proposed requirements actually may promote competition in that they "may make consumers more likely to purchase from DMA members without fear that they will, as a consequence, be deluged by solicitations or have their privacy compromised."
The staff concluded that, for these reasons, they would not recommend that the Commission challenge the DMA policy under federal antitrust laws.
NOTE: The staff opinion letter sets out the views of the staff of the FTC's Bureau of Competition, as authorized by the Commission's Rules of Practice. It has not been reviewed or approved by the Commission. As the Commission's rules explain, the staff's advice is rendered "without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding."
Copies of the staff opinion letter are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
Michael D. McNeely
Bureau of Competition