UK: Spam Attack

Kamran Rehman of Hextalls LLP discusses the regulations which govern unsolicited, or SPAM, communications and a recent case which provides practical guidance to those who are affected by or whose business is in producing or relies on unsolicited communications.

Introduction

As we all know, SPAM is a constant problem. A recent study from Ferris Research¹ predicts that the global cost of spam in 2007 will reach $100 billion compared to $50 billion in 2005. The study also found that some 75% of all email messages sent daily is SPAM.

If you’re a communications company whose subscribers are receiving SPAM, help is at hand. However, if you’re a marketing company who produces contacts lists, or a company who has purchased such lists for circulating marketing information, then you might want to read carefully the thoughts below.

Broadly, the law states that one cannot transmit unsolicited text messages or emails unless the recipient has previously notified you that he/she consents to receiving such a communication. The Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR) say an unsolicited marketing message cannot be sent unless the recipient has given the sender consent or he does not, for the time being, object to receiving such communication. The one exception to the rule is known as the 'soft opt in' exception - this is where the sending of unsolicited marketing is permitted (without obtaining consent) to individuals who have actively expressed an interest in purchasing a company’s products or services (or indeed have purchased them previously) provided the individual did not opt out of future marketing at the time when their details were collected.

PECR in action - Microsoft v Paul McDonald ²

Microsoft (C) claimed that McDonald (D) had sent (or instigated the transmission of) spam emails to its hotmail subscribers as direct marketing under PECR, as a large number of C’s customers complained they were receiving spam emails from D.

D’s website suggested that the email account holders had either opted in to receive marketing communication or had not indicated that they did not want to receive it. C brought court proceedings against D under PECR. C claimed D’s SPAM had caused C to suffer loss by damage to its goodwill, because subscribers were less willing to continue to subscribe to C’s products, including Hotmail accounts, if they were not effectively protected from SPAM, that fighting SPAM was expensive and it had had to buy additional servers to cope with the volume of SPAM transmitted.

The Court held that C, as the operator of a web-based email service, fell within the class of persons for whom the requirements in PECR were imposed and therefore had a cause of action under PECR. The Court held that D’s business was providing email lists of people who had not consented to receiving direct marketing and that it had sought to encourage the purchasers of those lists to send emails to C’s customers. The Court held that as C had suffered loss and D had not taken steps to comply with PECR, and granted C an injunction restraining D from instigating the transmission of commercial emails to C’s Hotmail accounts, as otherwise it would have to bring further actions if the same situation arose again. The Court also ordered D to pay C compensation.

Practical application

Therefore, if you’re a communications company whose subscribers are receiving SPAM communication where they have not consented to receiving that communication or have stated they did not want to receive it, you can bring an action for an injunction to prevent further such communication and for damages for losses which you have incurred for example to your goodwill.

If you’re a company which produces or sells marketing lists or has purchased such a list you can avoid a claim for damages and/or an injunction which may force you to suspend your operations by ensuring that those whose details are held on your lists have either consented to receiving such communication as is intended to be sent, or alternatively that they have not specifically consented but fall within the 'soft opt in' exception.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.