Yesterday marked another pivotal, yet deeply concerning, day in Oregon for ecommerce and other businesses nationwide as the Oregon Senate Rules Committee voted to advance House Bill 3865 towards a final passage. The vote was closely divided, reflecting the ongoing debate and significant concerns surrounding this legislation’s impact on legitimate businesses.
While the Ecommerce Innovation Alliance (EIA) shares the stated goal of protecting consumers from unwanted solicitations, the path HB 3865 has taken continues to pose substantial challenges for businesses operating in today’s digital landscape, as we have warned before.
A Step Forward on Disclosures, But Key Concerns Regarding Consumer Consent Remain
In a partial win for common sense, the committee approved the B-4 amendment to the B-Engrossed version of HB 3865. This crucial amendment eliminated some of the more problematic disclosure requirements that had been included in the draft legislation. Specifically, it removed the requirement for text messages to include the extensive disclosures specified in ORS 646.611 (1)(a), (b), (c), and (d). We have consistently argued that these disclosures are “nonsensical in the context of concise text messaging” and would create a “terrible experience for merchants and consumers”. The removal of these specific requirements is a positive development that acknowledges the distinct nature of text communication.
However, despite our best efforts, the committee failed to adopt the proposed B-6 amendment. This outcome is a significant disappointment because the B-6 amendment would have addressed a critical issue that continues to threaten law-abiding businesses:
Disregard for Consumer Consent and Quiet Hours: The bill, as it currently stands, does not respect a consumer’s fundamental right to choose when they receive messages, even if they have provided prior express consent. HB 3865 prohibits solicitations outside the hours of 8 a.m. to 8 p.m. or more than three separate times within a 24-hour period, unless the person has an “established business relationship”. While an amendment did introduce a definition for “established business relationship” that includes a previous transaction or series of transactions within 18 months, the B-6 amendment would have broadened this to explicitly include “an express invitation or permission to make a telephone solicitation that the party gave to the caller previously and has not revoked.” The failure to adopt this means the bill still “would prohibit communications with these voluntarily opted-in consumers after 8 PM or more than three times in 24 hours, overriding clear consumer intent.” This is a significant departure from the federal TCPA standard, which primarily targets unsolicited messages and does not prohibit communications with prior express consent during specific hours.
Misinformation and Missed Opportunities for Compromise
During yesterday’s hearing, the bill’s sponsor presented a one-sided argument to the Senate Rules Committee, arguing that adoption of the B-6 amendment would enable consumers to unknowingly opt-in to receive messages from hundreds of companies simultaneously – what he termed the “lead generation loophole.” The comments suggested that there was a widespread problem with consumers’ consent being obtained surreptitiously online and then sold or transferred to hundreds of other companies. No evidence was offered to support this conclusion and the picture that was painted is exaggerated. Indeed, the courts have addressed this issue by placing the burden on companies making calls to establish that consent was provided to them. See, e.g., Mattson v. New Penn Fin., No. 3:18-cv-00990-YY, 2020 U.S. Dist. LEXIS 197955, at *13 (D. Or. Oct. 25, 2020) (The consumer, in looking for a mortgage, consented to receive messages from “up to 4 lenders.” The Oregon federal court denied a lender summary judgment when it could not meet the burden of proving that they were one of the four lenders that were expressly listed at the time the consumer provided their consent.). This case – and countless others like it – demonstrate that courts have already closed the “lead generation loophole” by placing the burden on the defendant to prove they obtained consent that clearly and conspicuously identified their company.
While EIA has been raising these concerns for months, it has been disappointed that proponents have not been willing to work towards a compromise that respects consumer choice. EIA and other industry participants have made multiple efforts to find compromise language that would preserve a consumer’s ability to knowingly opt in to receive messages from businesses, while ensuring that consent is provided only to identified businesses and cannot be transferred. We have advocated for solutions that would honor consumer consent to receive desired messages -– which means ensuring consumers have a clear understanding of exactly which companies they are providing consent to. Our aim is always to strike a balance that protects consumers while allowing businesses to operate effectively when consumers have provided their consent to receive messages.
Vice Chair Bonham Stands for Businesses and Consumer Choice
We commend Vice Chair Bonham for recognizing that the current draft of the bill, even with the approved amendment, continues to punish law-abiding businesses, potentially subjecting them to liability, and ignores consumer choice. As a result of these persistent issues, Vice Chair Bonham has indicated that he will prepare a “Minority Report” opposing the legislation unless it is possible to find a compromise that genuinely protects businesses and honors consumer choice. His commitment to serious legislation and valuing industry input has been consistently noted.
The EIA remains steadfast in its commitment to working with the Oregon Senate. We believe it is essential to find a balanced path forward that effectively targets bad actors without imposing impossible burdens on the ecommerce ecosystem. We will continue to highlight the “technically unworkable provisions” and the risks of “frivolous lawsuits against legitimate businesses” that this bill, in its current form, presents.
