Normally the UK’s ASA-enforced code for non broadcast ads takes a while to keep in step with changes to relevant UK laws. The new eleventh edition changes all that, and in a way that does e-mail and SMS marketers no favours whatsoever.
Topic: Digital marketing
Who: The Committee of Advertising Practice
When: March 2003
The brand new, eleventh edition of the British Code of Advertising, Sales Promotion and Direct Marketing (“CAP Code”) has been launched. The new code contained something of a bombshell for digital marketers in the UK.
For some months now, marketinglaw.co.uk has been reporting on the build-up towards implementation in the UK of the EU “Communications Data Protection Directive” (“CDPD”). This has a lot to say about the regulation of digital marketing in Europe, and in particular seeks to harmonise the regime for marketing e-mail and SMS/text.
Perhaps most importantly, it introduces, with just two exceptions, a blanket “not without prior consent” rule for unsolicited commercial e-mail/SMS.
The two exceptions are e-mails sent in the context of an existing relationship between sender and recipient (so-called “soft opt-in”) and digital marketing sent in a situation where the subscriber receiving the e-mail is a legal, not a natural person (where the regime will be “opt-out”).
Such changes were clearly going to have considerable impact on digital marketers in the UK, who were also far from 100% clear as to (1) the exact meaning of “prior consent” (2) the precise extent of the “soft opt-in” exclusion and (3) how the exception to prior consent in respect of “non natural person” subscribers was going to work.
So as of the beginning of March 2003, UK marketers and their advisers were eagerly awaiting publication by the DTI of the draft regulations by which the CDPD was to be transposed into UK law.
Following the draft, trailered for late March 2003, the DTI was determined to stick to a three month consultation period. This would just give it time, it hoped, to introduce the final regulations so that they could be in force by the EU deadline of 31 October 2003.
Against this backdrop, it came to many as a complete bolt from the blue when the Committee of Advertising Practice decided to anticipate these regulations by four months, before even the draft regulations had been published.
It did this by attempting to include them in the new CAP Code. To make matters worse, the CAP was seeking to bring them into force on 4 March 2003 (although complaints received up to 4 June 2003 will still be considered under the old code), way before the industry was expecting to have to live with the new legal rules, and way in advance of any further clarification being available from the DTI on the key three points mentioned above.
As for the wording of the new digital marketing provisions of the CAP Code, all might have been forgiven if these offered to shed more light on points (1)-(3). Well, here are the provisions:-
“The explicit consent of consumers is required before:………………..b) 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”.
So what help does this give us on our key questions (1)-(3) above?
On question (1) it is interesting that the phrase “prior consent” in the directive becomes “explicit consent” in the CAP Code.
“Explicit consent” is the phrase used in the Data Protection Act 1998 to describe the highest level of consent required, for instance before processing “sensitive personal data”. In practical terms, it is accepted that no such data can be used at all without the relevant individual clearly requesting that this should occur. In other words express “opt-in”.
Contrasting “explicit consent” in the CAP Code with “prior consent” in the directive, if the directive had intended it to be “explicit consent”, one wonders why it did not say so. Maybe it is more likely that “prior consent” was intended to introduce a slightly lower barrier.
For instance, if one has had an on-going commercial relationship with a consumer over a period of months or years before the new law comes into force, perhaps it could be argued that even though there has not been a prior sale to that individual allowing “soft opt-in” under the new regime, there is still a situation in existence where it is perfectly fair and reasonable to regard the individual as having given his or her implicit “prior consent” to receiving unsolicited marketing SMS/E-mail in future. As it is, however, the CAP Code appears to close the door to this interpretation and requires that outside of “soft opt-in”, no unsolicited marketing SMS or e-mail can be sent without there being a record of a prior explicit request from the recipient that this should occur.
On key point (2) the CAP Code provides precious little further clarification on the exact meaning of the soft opt-in exception. Under the CDPD, this applies where marketer A has obtained the digital co-ordinates of consumer B “in the context of a sale of a product or a service” by A to B. In those circumstances it will be quite legal for A to send further unsolicited marketing email to B, provided A is marketing “similar” products to those in question when B first provided an e-mail address and provided also that on each such occasion the recipient is given a clear and easy to use chance to opt-out of receiving such communications in the future.
Much controversy surrounded the exact meaning of “similar products”, while others wondered if an actual purchase had to be concluded for the email supplied to be usable on an opt-out basis. Might it be sufficient, for example, if product information has very recently been supplied at B’s express request?
On both aspects, one might have hoped that the CAP Code would provide more guidance, but on both counts it fails. On the first aspect, the directive’s requirement that B’s digital details must have been obtained previously in the context of a purchase has been streamlined in the CAP Code to a simple requirement that the messages have to be sent to “existing customers”. This closes the door on any argument that a concluded side is unnecessary.. On the second “similar products” aspect, there is no further clarification provided over and above the wording of the directive.
So what about the apparent exception to “prior consent” offered by point (3) above? This does not appear at all.
Why this matters:
Marketinglaw.co.uk has no less than four fundamental concerns with this development.
First of all, the CAP Code is arguably for the very first time wandering into areas of “delivery” as opposed to content. One might have expected the Committee of Advertising Practice to have consulted more widely and openly on this radical departure from its historical practice before taking the plunge. The move brings the code firmly and uncomfortably within the areas which have previously been the domain of stakeholder industry body codes such as the DMA Code as well as statutory regulators such as the Information Commission.
Secondly, by anticipating fundamental changes to the regulatory landscape for digital marketers in the UK, at a point when they were just beginning to get to grips with the possible changes coming their way in Autumn, the CAP has unjustifiably jumped the gun and made life even more difficult and challenging for UK marketers.
Thirdly, the wording of the relevant parts of the new CAP Code offers no further assistance on issues which are currently unclear from the terms of the directive.
Fourthly, where the Code does seem to be drafted in clearer terms than the directive, it appears to be arguably tougher on marketers than the directive required.
Altogether, not an ideal state of affairs to say the least, and one has to question whether those concerned with the Code drafting process fully thought through the implications of what they were about.