UK: Direct Marketing Restrictions in the E.U.

Last Updated: 1 December 2003
Article by Jonathan Nugent

New rules regarding privacy and the use of information for marketing purposes are creating difficulties for marketers in the E.U. as well as the U.S. (See article Direct Marketing Restrictions in the U.S., for a detailed description of recent developments in U.S. marketing law). This article provides an overview of recent changes in this area in the E.U., focusing on the position in the U.K.

The European legislation which addresses direct marketing is confusing, as there is no single Directive which sets out the whole position. Rather, there is a layering of various Directives, each of which is then implemented in different ways by the Member States.

Whilst the terms "opt-in" and "opt-out" are not used by the legislation, a big part of the debate around direct marketing has been around whether marketers should be required to obtain the consent of individuals before marketing directly to them (opt-in), or whether they should only be required to give the individuals the right to object to receiving direct marketing communications (opt-out).

Data Protection Directive

The first recent U.K. statute to address direct marketing was the Data Protection Act 1998, which implemented the European Data Protection Directive 95/46. The Data Protection Act applies to the processing of all personal data, which broadly means data relating to living individuals. It is therefore very wide in its effect, but it gives individuals a specific right to require a company not to process their personal data (e.g., name, address, telephone number, e-mail address) for the purposes of direct marketing. The effect of this is to give individuals (including individuals who are employees, but not corporations) a right to opt-out of all types of direct marketing.

This specific obligation on data controllers in relation to direct marketing is in addition to the general obligation a data controller is under to obtain and process personal data fairly and lawfully and to comply with the other data protection principles.

Non-compliance may result in potentially unlimited fines for the data controller with enforcement notices and compensation for data subjects. To date, the Information Commissioner (who is responsible for enforcement of data protection legislation in the U.K.) has never taken action against a spammer, and the maximum fines imposed by the Information Commissioner tend to be relatively low—in 2002, the maximum fine imposed was £5,000.

Directive On Privacy And Electronic Communications

E.U. Member States have recently implemented or are in the final stages of implementing Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector. This Directive enhances individual’s rights in relation to direct marketing by various types of communications services, and replaces an earlier Directive (97/66/EC) concerning data protection and privacy in the telecommunications sector. It has been implemented in the U.K. by the Privacy and Electronic Communications (EC Directive) Regulations 2003, which will come into force on 11 December 2003. The U.K. is slightly late in implementing this Directive, as the deadline for all E.U. Member States was October 2003.

The new Directive covers direct marketing by personal calling, automated calling, fax, e-mail, and other means of electronic communication. It does not cover direct marketing by post. The restrictions on marketing in the Directive are primarily aimed at protecting "sub-scribers," i.e., the customers of communications service providers, and some restrictions apply only to subscribers who are individuals, rather than corporations. However, Member States have a degree of discretion over how they implement the Directive, which sets mini-mum levels of protection, and hence rights in some Member States (for example, in relation to corporate subscribers) may be stronger than in others. The rules in the Directive are additional to individuals’ rights under the Data Protection Directive.

The basic position regarding various forms of direct marketing under the new U.K. Regulations is as follows:

  • Person calling (i.e., telephone marketing by non-automated means). Subscribers can opt out either by notifying the caller that they do not wish to receive unsolicited calls or, alternatively, individuals may register their number on an opt-out database operated on behalf of OFCOM (the telecommunications industry regulator). Marketers should check numbers they are calling against the "opt-out" list at least every 28 days, as there is a grace period for numbers which have been put on the list within the preceding 28-day period. The U.K. government has indicated an intention to extend the opt-out database to include corporate subscribers at a later date.
  • Automated calling (i.e., marketing using automated equipment to transmit pre-recorded marketing messages) requires the subscriber’s prior opt-in consent.
  • Fax. Marketing by fax requires the prior opt-in consent of subscribers who are individuals. Corporate subscribers can opt-out by notifying the caller that communications should not be sent to that line. Both corporate and individual subscribers may also register with OFCOM that they do not wish to receive unsolicited faxes.
  • E-mail and text messaging. The prior opt-in consent of subscribers who are individuals is generally required in order to send marketing by electronic mail (and similar services such as text messages). Under the U.K. Regulations, the restrictions on sending of electronic mail only apply to subscribers who are individuals (i.e., not corporate subscribers). There is an exception for marketing of similar goods or services to existing customers. This provides that existing customers can be sent electronic mail for the purpose of marketing good or services similar to those they have previously purchased unless they have opted out to use of their details for this purpose. However, the individual must be given a simple means of refusing the use of their contact details for this purpose, free of charge, both at the time their details are first collected and at the time of each subsequent communication.
  • Cookies. Marketers must not store information on a subscriber’s computer, or gain access to information on a subscriber’s computer, for example by using "cookies" to track web sites visited by a subscriber or to recognise the subscriber on a subsequent visit, unless the subscriber has been provided with clear information about the purposes for which the information will be used, and is given the opportunity to opt out of such use. This might be done, for example, by explaining to users how to set their browsers to reject cookies. The most significant change brought in by the new Regulations is that, so far as marketing to individuals is concerned, opt-in consent must be obtained before a company may market to them by fax, text, or e-mail, unless the carve-out for existing customers applies.

However, the "existing customer" carve-out is quite narrow:

  • It only applies to e-mails and text messages, not faxes;
  • It can only be used by the company that obtained the subscriber’s details, and not by, for example, other members of the group, or third-party marketing partners;
  • It only applies when details are obtained in the course of a transaction. The U.K. Regulations have sought to make this more flexible by including details obtained in the course of negotiations for a sale, but the carve-out would not apply, for example, if an individual’s details are obtained as a result of the individual’s participation in a sales promotion (in which case opt-in consent must be obtained); and
  • The subscriber’s details can only be used to market similar products or services. The concept of similarity is not defined and so in some cases it may be unclear whether the carve-out applies.

This means that the Regulations are likely to increase the use of opt-ins being used on a blanket basis. For example, in order to take advantage of the opt-out carve-out, a database of customer details might have to include reference to the type of product/service purchased by a customer. To achieve compliance, in many cases it may be easier to seek opt-ins from all customers.

Marketing e-mails which disguise the sender’s identity or do not include an address to which recipients may send requests that communications cease, are also prohibited. Telephone communications and faxes for marketing purposes should also provide details of the name of the person calling and the address or telephone number on which they can be reached free of charge. These requirements are in addition to a set of complex requirements requiring the pro-vision of information to customers in the context of e-commerce transactions and other forms of distance selling set out in the E-Commerce Directive and the Distance Selling Directive.

The Directive requires Member States to provide for judicial remedies and to impose appropriate sanctions. The U.K. Regulations do this by providing that when any contravention of the Regulations is alleged, either OFCOM or any person aggrieved may request the Information Commissioner to exercise his enforcement functions in respect of the contravention. The Information Commissioner may also take action unilaterally. A person suffering damage as a result of contravention of the Regulations is also entitled to bring legal proceedings for compensation.

The new rules are also reflected in a number of industry codes of practice and self-regulatory schemes. For example, in the U.K., the Advertising Standards Authority, which is the self-regulatory body for the advertising industry, has introduced rules which require the explicit consent of consumers for marketing by fax, e-mail, or SMS, and has recently published an adjudication in which it reprimanded an advertiser for sending unsolicited e-mail marketing to addresses on a list which it had bought, even though the advertiser believed the individuals on the list had consented to such marketing.

The U.K.’s enforcement provisions have been criticised by an all-party group of Members of Parliament who believe that the Information Commissioner is not equipped with adequate powers or resources to follow-up and catch spammers. The group recommended that the legislation should be extended to prevent spam being sent to businesses, and called for coordinated international action to be taken against spam. They also recommended that the Department of Trade and Industry should encourage a "super complaints" system allowing organisations to represent people with complaints about spam. The group plans to send recommendations to both the U.K. and U.S. governments.

It remains to be seen whether changes in legislation will have the desired effect of increasing consumer protection and privacy. In the meantime, as in the U.S., companies engaged in direct marketing in the E.U. should be reviewing their data collection and marketing procedures to ensure compliance with the new rules.

Copyright © 2007, Mayer, Brown, Rowe & Maw LLP. and/or Mayer Brown International LLP. This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Mayer Brown is a combination of two limited liability partnerships: one named Mayer Brown LLP, established in Illinois, USA; and one named Mayer Brown International LLP, incorporated in England.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.