Not that you would know it, but the present legal regime for marketing use of data about a mobile phone user’s location is very strict indeed. New mobile marketing rules promised for 31 October 2003 are set to change that.
Topic: M commerce
Who: The Department of Trade and Industry
When: March 2003
Where: London
What happened:
The UK government finally published its consultation document on the implementation of the EU Directive on Privacy and Electronic Communications (previously dubbed by marketinglaw.co.uk the "Communications Data Protection Directive"). The Directive had much to say that related to the use of mobile phone technology for marketing, and the government's proposals for giving this the force of law in the UK are therefore of crucial importance for the M commerce sector. The DTI has requested comments on its proposals by 19 June 2003 and the current plan is to publish the final version of the new Regulations in August 2003, with a view to their coming into force by 31 October 2003, the implementation date required by the EU directive. The current proposed moniker for the new regulations is "the Privacy and Electronic Communications (EC Directive) Regulations 2003" ("PECRs").
The full consultation document is available on the DTI website at the following URL:
http://www.dti.gov.uk/cii/regulatory/telecomms/telecommsregulations/comms_dpdshtml.
At the moment, a large part of current legal regulations affecting the use of mobile phones for marketing is contained in the Telecommunications (Data Protection and Privacy) Regulations 1999. These will be superseded by the PECRs but for the moment they remain in force and include two provisions of particular relevance for mobile marketers.
First of all, they prohibit the use of location data (information as to the precise geographical location of the mobile phone owner at any time) for marketing purposes except in one narrow instance. This is use by the provider of the telecommunications service which the mobile phone owner is using (e.g. Orange, Vodafone) to market to that subscriber other telecommunications services offered by that provider.
The PECRs will liberalise the situation here radically by opening up the use of location data for general marketing purposes provided that "subscribers and users give their informed consent and understand the data processing implications of this kind of service". We are quoting the DTI consultation document here.
The draft PECRs require that prior to making marketing use of location data the telecommunications provider in question must disclose the types of location data that will be processed, the purposes and duration of the processing of that data and whether the data will be transmitted to a third party for the purpose of providing the particular service in question. The draft regulations go on to make it clear that even after he has opted in to receiving such marketing communications, the user or subscriber must be given the opportunity to withdraw such consent, using a simple means and without charge, every time he receives a new marketing communication. Lastly and most importantly perhaps, the draft PECRs state that the processing of location data for marketing purposes can only be carried out by the telecommunications service provider, the third party providing the particular service that is making use of the location data or a person acting under the authority of either of these two. The use must also be restricted to what is necessary for the purposes of providing the particular service in question.
As for how to make the disclosures that must be given before the potential recipient of the marketing messages can validly opt-in, the PECRs do not go into this level of detail. Provided they are used with care, however, it is anticipated that most other off line or on line communication channels by which this can occur and be recorded will be suitable.
Another area impacted by the 1999 Regulations was unsolicited direct marketing by automated calling systems without human intervention, also referred to as automatic calling machines.
As the DTI consultation document helpfully tells us, this term was not defined and there was some debate as to how far this extended. The Information Commission gave the impression that under its interpretation of the 1999 Regulations, this extended to not only unsolicited marketing SMS, but also to e-mail marketing. However, virtually nobody else seemed to agree. ICSTIS (the premium line telephone services watchdog) and the Direct Marketing Authority, for example, took the view that marketing SMS came under the same regime as person to person outbound telephone marketing, namely statutory "opt-out", and there were no reported cases of enforcement action being taken, successfully or otherwise, by the IC on the basis of its own, stricter interpretation.
The DTI tells us in the consultation paper that in its own view the "automated calling systems" "opt-in" requirement extended only to systems which were designed to automatically deliver a recorded voice message. The DTI acknowledges, however, that the imprecision of the terminology in the 1999 Regulations has led to doubts about how to deal for instance with "power diallers". These dial numbers automatically, but are designed to establish a voice link with a live operator rather than deliver a pre-recorded message. Where they sometimes fall down, however, is where there are insufficient call centre staff available to answer the calls being dialled. This leads to the recipients of such calls meeting with silence when they pick up the phone.
So what will be the new regime under the PECRs? First of all, marketing SMS will be treated in the same way as marketing e-mail. This means that the regime will be "opt-in" or "soft opt-in" where the message is sent to a recipient where the "subscriber" is an individual as opposed to a company. For SMS to recipients where the "subscriber" is a company, it will be "opt-out". More details about the "opt-in" and "soft opt-in" regimes are available in the separate marketinglaw piece on the implications of the PECRs for e-mail marketing. As regards the use of automated calling systems and power diallers, these are covered in another piece on marketinglaw focusing on the telemarketing implications of the new PECRs.
Why this matters:
The two big changes here for mobile marketing, namely the liberalisation of location data use and "opt-in"/"soft opt-in" for marketing SMS, and presumably MMS to individual subscribers, but as with a lot of the other changes which these new regulations will bring, a critical factor will be enforcement. We focus on this aspect in a separate piece in marketinglaw.co.uk under "Selling on line".
