Reported cases of email marketing rule-breakers being sued have doubled with two more disputes coming to light, one involving an eye watering payment as the price of not going to trial. Stephen Groom reports.
Topic: Email marketing
Who: Gordon Dick v Transcom and Microsoft v NortyCams
When: September 2006 and March 2007
Not one but two cases came to light in which proceedings were brought for damages under the Privacy and Electronic Communications (EC Directive) Regulations 2003 ("PECRegs") and ended in damages being payable by a spammer.
In the earlier of the two cases the proceedings were brought by Microsoft and the defendant was adult website NortyCams.
Looking to attract more traffic to its site, Nortycams sent salacious unsolicited emails to UK recipients who had not opted in to receive them.
As the spam recipients' ISP, Microsoft relied (as it had done in another case it brought at around the same time against purveyors of "opt in lists" which turned out to be nothing of the kind) on regulation 30 (1) of the PECRegs. This provides that "a person who suffers damage by reason of any contravention of the requirements of the [PECRegs] shall be entitled to bring proceedings for compensation from that other person for that damage."
Its service as an ISP was being impaired and its reputation damaged by NortyCams' activities and after getting help from NortyCams' ISP in tracking down those responsible, Microsoft issued its proceedings and sought substantial damages.
Before trial NortyCams settled with Microsoft for payment to Microsoft of a combined damages and costs figure of £45,000.
Dick sues Transcom
In the later case, one Gordon Dick sued online IT product vendor Transcom in respect of a single email which it said it sent out once a year to customers and those who had contacted Transcom about its services.
Dick denied ever being in either category and threatened to sue Transcom unless they treated for peace and made him an offer.
Transcom's response was to stick to its guns and tell Dick to sue them if he still had a beef. But Transcom were out of luck as Dick turned out to be an electronic marketing specialist and a non executive director of UK domain name registry Nominet. He called their bluff and issued proceedings under regulation 30 (1) of the PECRegs in the Edinburgh Sheriff Court.
Dick sued for £750 damages, the maximum awardable by the Sheriff. Transcom then apparently offered Dick £750 to settle. After various misunderstandings, the settlement did not go through and at a key hearing in December 2006, Transcom failed to show up, leaving the Sheriff within his powers to make a damages award.
The award was the maximum of £750 plus £618.88 expenses and 8% interest on the £750 since May 2006, when Dick first issued the proceedings.
At the last count, the parties were still in dispute but the award still stood.
Why this matters:
With these two cases, the number of reported cases in which the PECRegs have been enforced through the courts has doubled to four, with Microsoft the claimant in two of them. Furthermore, given that the first reported settlement in December 2005 involved agreed damages of £270, there is a clear upward trend in the price being paid by spammers for breaching opt in laws.
Elsewhere on marketinglaw in our March 2007 update we report on the apparent complete lack of enforcement activity by the Information Commissioner's Office, the body charged with the task of enforcing the PECRegs. Has the blunt-toothed and resource-poor data privacy regulator given up the ghost and decided to leave it to literal "self regulation" with affected parties having to sue spammers in the courts? We think we should be told.