The Ecommerce Innovation Alliance (EIA) announces a successful settlement with the State of Texas in the litigation challenging the implementation of Texas Senate Bill 140 (SB 140). This settlement resolves the lawsuit Ecommerce Marketers Alliance, Inc. et al. v. State of Texas et al. (Case No. 1:25-cv-01401).

This outcome is a landmark victory for the entire ecommerce industry. It decisively confirms the legal position that businesses sending text messages only to consumers who have provided prior, affirmative consent are not “telemarketers” under Texas law. Consequently, these legitimate businesses are not subject to the registration requirements of Texas Business and Commerce Code Chapter 302.

This critical outcome was achieved through the collective action and leadership of the co-plaintiffs, who formed a strategic alliance to protect the entire consent-based marketing ecosystem. This unified front was essential in demonstrating the widespread, legitimate opposition to the State’s misapplication of the law, a key factor in compelling the State to resolve the ambiguity.

The plaintiffs in this action represented three core pillars of the eCommerce industry:

• Ecommerce Innovation Alliance (EIA): As the primary industry advocate, the EIA initiated this legal challenge to protect its members from overreaching and misapplied regulation.
• Postscript:  Postscript, a leading SMS marketing platform and a key member of the EIA’s board. Postscript’s participation was critical. It demonstrated the technology sector’s commitment to a compliant and sustainable SMS channel for its customers.
• Flux Footwear, LLC: A dynamic, fast-growing ecommerce brand and EIA member. Flux represented the thousands of legitimate merchants that SB 140 unjustly threatened, giving a powerful voice to the businesses directly impacted by the law’s ambiguity.

What This Settlement Achieves

The primary deliverable of this settlement is the State of Texas’s agreement to provide clear, public guidance confirming the legal interpretation held by EIA.  As part of the settlement, the Texas Secretary of State (SOS) has formally agreed to add specific language to its official website. This new guidance explicitly states that businesses engaging in consent-based text messaging are not required to complete the Telephone Solicitation Registration Statement.

As the central component of the settlement, the Texas Secretary of State has agreed to add the following language to its official FAQ website within 10 business days of the court’s entry of dismissal.

The official new guidance will read as follows:

“In light of the position articulated by the Texas Office of Attorney General and Secretary of State in Ecommerce Marketers Alliance, Inc. et. al v. Texas et al, 1:25-cv-1401 (W.D. Tex. 2025) and an agreement reached among the parties to the case, any business that sends text messages with prior consent of the consumer is not required to complete the Telephone Solicitation Registration Statement under Business and Commerce Code Chapter 302. S.B. 140 (89th Leg., R.S.) amended Chapter 302 to give ‘telephone call’ the meaning assigned by Section 304.002 of the Business and Commerce Code. Section 304.002 defines ‘telephone call’ to exclude ‘a transmission made to a mobile telephone number as part of an ad-based telephone service, in connection with which the telephone service customer has agreed with the service provider to receive the transmission.'”

This new guidance resolves the ambiguity of SB 140 by pointing to a solution already existing within the Texas Business and Commerce Code.

The legal mechanism is as follows:

1. The new guidance confirms that the definition of “telephone call” in Chapter 302 (the chapter requiring registration) must use the definition from Section 304.002.
2. Section 304.002 explicitly excludes transmissions where a telephone service customer “has agreed… to receive the transmission”.
3. Therefore, text messages sent with prior consumer consent are, by this official guidance, not “telephone calls” for the purpose of the registration statute.

For any business whose only text messaging activity in Texas is to consumers who have provided prior, affirmative consent (i.e., not sending unsolicited spam texts), this new guidance confirms that registration is not required.

Actionable Guidance for EIA Members: What to Do if I Already Filed?

The settlement agreement provides a process for EIA members to withdraw an application that has been filed if the Secretary of State has not acted on the application by registering the business and issuing a registration certificate.  If a registration certificate has not been issued, the application can be “un-filed.” Per the terms of the settlement, businesses in this situation are now entitled to formally withdraw this pending application.

The new guidance on the SOS website will explicitly state that the registration can be withdrawn by submitting a written request to withdraw the application to:

Guidance For Businesses with Approved Registrations

For those who submitted a registration application that has been processed and approved, there is no way to formally withdraw the application.  EIA specifically asked the State of Texas what process exists for businesses whose registration certificates have already been issued.

The State provided the following response:

1. No “Undo”: “Once SOS has issued a telephone solicitation registration certificate to an entity, it cannot remove the registrant from the record completely or otherwise ‘undo’ the registration”.
2. No Refunds: “Nor is there any process for a refund of the registrant’s filing fee”.

While this news may be frustrating for businesses that acted proactively, this confirmation provides a clear, definitive answer and prevents members from wasting time on futile “undo” or refund requests.  Because a registration cannot be “undone,” the proper course of action is to move the registration status from “Active” to “Closed.”

The State has confirmed three distinct options to achieve this “closed” status. A business does not have to wait a full year for the registration to expire.  Any business that is already registered but wishes to have its status marked as “closed” (in light of the new guidance that it is not required to be registered) may pursue one of the following three paths:

• Option 1: Direct Notice to SOS

• Action: The SOS will mark the entity’s status as “closed” after receiving the entity’s notice to SOS that it does not want to be registered.
• Recommendation: This is the most direct and cleanest path. Businesses should use the contact methods in Table 1 to send a formal written notice stating, “As we are a consent-based texting business, per the State’s guidance in Ecommerce Marketers Alliance v. Texas, we are not required to be registered and request our registration be marked as ‘Closed’ immediately.”
  
• Option 2: Cancel Your Security

• Action: The SOS will mark the status as “closed” if the entity cancels their security (the bond required under Business and Commerce Code Sec. 302.107).
• Recommendation: This is a two-step process. The business must first contact its bond provider to cancel the security and then the SOS must receive notice that the bond has been canceled.
  
• Option 3: (Passive) Fail to File Quarterly Update

• Action: The SOS will mark the entity’s status as “closed” if the entity fails to file the statutorily required quarterly update (per Business and Commerce Code Sec. 302.105).
• Recommendation: While this is a confirmed path, it is passive. A proactive, formal communication (Option 1) creates a cleaner, more professional legal record for the business.

Solidifying the Victory: The Attorney General Opinion

The settlement includes a second, long-term component designed to permanently resolve this issue. As part of the settlement, the Secretary of State has agreed, within 20 business days of the case dismissal, to make a formal request for a Texas Attorney General Opinion. This request will ask the AG to confirm through a published opinion that consent-based texters are not subject to the registration requirements.

This is a critical, forward-looking element of the settlement. A published AG Opinion is a powerful, legally significant interpretation that will bind the State in the future. It will serve as a powerful deterrent against similar regulatory overreach and can be used to prevent future misinterpretations of the law. Securing both the immediate website fix and the long-term AG Opinion represents a comprehensive legal victory.

This settlement is a perfect example of the EIA’s core mission: to advocate on behalf of the ecommerce industry, protect its members from unclear and burdensome regulations, and ensure that legitimate, consumer-friendly businesses can thrive.  EIA is immensely proud of its partners, Postscript and Flux Footwear, for standing up for the entire industry. This victory belongs to all EIA members. The Alliance will continue to monitor legislative and regulatory developments in Texas and across the country to ensure the interests of the ecommerce community are protected.

Join the EIA today to help strengthen and shape policies that affect all ecommerce businesses. Together, we can continue to create the future of ecommerce. Subscribe to EIA email updates to stay informed on key developments and their impact on your business.