Just over a year on from the new edition of the CAP Code of Advertising, Sales Promotion and Direct Marketing, changes have been announced. Most significantly, they materially change the Code’s position on unsolicited digital marketing, but does the Code now follow the law?
Topic: Self regulation
Who: The Committee of Advertising Practice
When: May 2004
The Committee of Advertising Practice announced "some minor changes and some major changes" to the British Code of Advertising, Sales Promotion and Direct Marketing. The "CAP" works alongside the Advertising Standards Authority, self regulating the UK's non broadcast advertising. Whilst the ASA adjudicates on complaints which are made that the CAP Code has been breached, the CAP's job is principally to draw up and update the Code from time to time.
Digital marketing changes
Probably the most important change is the updating of provisions affecting e-mail and mobile marketing.
When the 11th edition of the CAP Code was published in March 2003, it included new provisions which were intended to anticipate the implementation in the UK of the EU Privacy & Electronic Communications Directive.
The new code did not, however, pick up a nuance in the Directive to the effect that the rules for most B2B e-mail marketing would be less restrictive than those for B2C. This nuance became reality in the UK by way of an "opt-out" regime for unsolicited direct marketing e-mail and SMS to "corporate subscribers" (in other words the office e-mail addresses and mobile phone numbers of company employees).
In contrast, the CAP Code imposed blanket opt-in for all such communications, whether B2B or B2C, but the new amendments change things.
New "corporate subscriber" term
First of all the CAP Code has a new defined term, "corporate subscriber." This is defined as including "corporate bodies such as limited companies in the UK, limited liability partnerships in England, Wales or Northern Ireland or any partnerships in Scotland." It also includes schools, hospitals, government departments or agencies and other public bodies. It does not include sole traders or non limited liability partnerships in England, Wales and Northern Ireland.
This new defined term comes to life in new Code clause 43.4. This deals with situations where the explicit consent of consumers is required before sending certain types of marketing communication.
The first change here relates to marketing by fax. Whereas the previous Code simply said that the explicit consent of consumers was required before marketing by fax, 43.4(b) now adds "explicit consent is not required when marketing by fax to corporate subscribers, though marketers must comply with 43.3(d) in particular and, if necessary, run their databases against the fax data file.
We think we follow this as it largely tracks the Privacy and Electronic Communications Regulations, but there is a problem with the reference to 43.3 (d): there is no such sub clause in the Code. Oh dear.
Then comes the really major change.
The old 43.4(c) required the explicit consent of consumers before:-
"marketing by e-mail or SMS text transmission, save that marketers may market their similar products to their existing customers without explicit consent so long as an opportunity to object to further such marketing is given on each occasion"
This has now expanded somewhat to a requirement that the explicit consent of consumers is needed before:-
"sending marketing communications by e-mail or to mobile devices, save that marketers may send unsolicited marketing about their similar products to those whose details they have obtained in the course of, or in negotiations for, a sale. They should, however, tell them they may opt-out of future marketing both when they collect the data and on each occasion they send out marketing communications and should give them a simple means to do so. Explicit consent is not required when marketing business products to corporate subscribers including to their named employees".
The change from "SMS text transmission" to "to mobile devices" is presumably intended to ensure that multimedia messages sent to mobile phones, as well as text, are caught by the new rule.
The change from "existing customers" to "those whose details they have obtained in the course of, or in negotiations for, a sale" reflects the wording of the UK Regulations, which implemented the Privacy and Electronic Communications Directive and came into force in December 2003.
The change from having to give "an opportunity to object to further such marketing" to having to provide "a simple means of opting out of future marketing" again reflects the UK Regulations, although for some reason it omits the further requirement that the simple means of opting out of future marketing must also be free of charge save for the cost of the communication.
Code still stricter than law
The "corporate subscriber" reference now included still leaves the CAP Code inconsistent with the law.
The law allows, on an opt-out basis, unsolicited direct marketing to the company e-mail addresses and mobile phone numbers of employees of limited liability companies and unlimited liability partnerships, regardless of the subject matter of the message.
The CAP Code, on the other hand, narrows this B2B exemption. It does this by providing that it will only be opt-out (as opposed to opt-in) if the communication in question is "marketing business products".
Clause 1.2(i) now provides that the Code does not apply "to live oral communications, including telephone calls". Previously the word "live" did not appear, so recorded messages are caught by the Code.
Clause 1.2(o) reflects the introduction of recent new rules affecting point of sale promotion of cigarette rolling paper and filters. It does this by making it clear that although generally the CAP Code does not apply to point of sale displays, it will apply to such displays relating to rolling paper and filters.
The other change of any note deals with the provision of information about the marketer and seller in certain types of communication.
There is a new provision which specifically relates to "fax and non-live sound automated call marketing communications." Whether solicited or unsolicited, the CAP Code now requires that these must contain the full name and a valid address or freephone number of the marketer, to which recipients can send opt-out requests.
A similar provision applies to e-mail and mobile marketing communication as follows:-
"Email and mobile marketing communications should provide the full name and a valid address (e.g. an e-mail address) of the marketers to which recipients can send opt-out requests."
Why this matters:
The changes are not numerous and clearly that of most significance relates to unsolicited digital marketing communications to "corporate subscribers."
Marketinglaw has already expressed disappointment that having finally brought itself into line with the law in this area, the CAP Code then takes the opportunity to go back out of line by narrowing the opt-out opportunities for B2B digital marketing, so they can only be opt-out if the subject matter is "business products."
Particularly as the Advertising Standards Authority is the only UK public body (apart from the premium rate telephone line regulator ICSTIS) that seems currently to be enforcing the new rules for digital marketing inspired by the EU Directive, (with the Information Commission still making no overt or publicly reported attempt to enforce the new rules), this is of considerable significance and, so far as marketinglaw is aware, puts the UK completely out on a limb compared with its EU colleagues. Particularly as the medium in question knows no geographical bounds, this places B2B UK digital marketers in something of a quandary to say the least.