A new group called the Mobile Advocacy Coalition has formed to combat a legal ruling handed down earlier this month by the US 9th Circuit Court of Appeals in a case called Satterfield v. Simon & Schuster. Book publisher Simon and Schuster generated a text message promoting a Stephen King novel to plaintiff Satterfield, who had previously downloaded a ringtone from a mobile marketing firm (not explicitly affiliated with publisher Simon & Schuster). The marketing message to Satterfield was unsolicited and a class-action lawsuit followed.

The reference to TCPA below is to the Telephone Consumer Protection Act of 1991. Here's the 9th Circuit's discussion of the factual and procedural background:

Satterfield filed suit, alleging a violation of the TCPA for Simon & Schuster’s transmission, of this unsolicited text mes- sage to her and other class members’ cell phones, by an Auto-matic Telephone Dialing System (“ATDS”). Simon & Schuster moved for summary judgment, arguing that (1) it had not used an ATDS, (2) Satterfield had not received a “call” within the meaning of the TCPA, and (3) Satterfield had consented to the message and had not been charged for its receipt. The district court granted the summary judgment holding that (1) Simon & Schuster and ipsh! had not used an ATDS and (2) Satterfield had consented to receiving the mes- sage. The district court did not rule on Simon & Schuster’s argument that a text message is not a “call” under the TCPA. 

The TCPA requires consumer consent to receive automated "calls" (interpreted here to include SMS messages). According to the 9th Circuit's ruling:

[W]e hold that it is reasonable to interpret “call” under the TCPA to include both voice calls and text messages.

The 9th Circuit reversed summary judgment for Simon & Schuster and remanded to the lower court for further adjudication. The potential consequences, according to the Mobile Advocacy Coalition are as follows:

The US Court of Appeals for the Ninth Circuit ruled against Simon & Schuster, and in doing so, has twisted the meaning of the Telephone Consumer Protection Act of 1991 in a way that imperils the entire mobile marketing industry.

The court has ruled that any computer that sends texts is considered an auto dialer, which puts any mobile marketing campaign on the wrong side of the law.

If the coalition's view is correct, a heavy burden might be placed on SMS marketers to obtain explicit consent to marketing messages before they're sent. Given consumers' abstract aversion to much of mobile marketing, the danger here is almost self-evident. 

Mobile marketing is also confronted by a more expansive, pending complaint before the US FTC about a range of issues surrounding mobile marketing and advertising brought by the Center for Digital Democracy and the U.S. Public Interest Research Group (USPIRG) as an extension of their 2006 complaint regarding behavioral targeting online. The complaint is far reaching and touches practically every element of mobile advertising and marketing on consumer privacy grounds. 

These are significant legal threats to mobile marketing and advertising. However, it is unlikely that Congress and regulators will allow litigation or regulation to kill mobile advertising. But there may be more stringent rules that emerge around consent that could add considerable friction to the process and dampen ad revenues accordingly. 

More on this to come.