New anti-"spam" initiatives
by Tony O'Malley and Alicia Campos, Mallesons Stephen Jaques
Tony O'Malley and Alicia Campos have submitted an article, New anti-"spam" initiatives, on the federal government's announced intention to introduce legislation aimed at addressing the problem of spam email. They outline current regulation in the area, summarise key aspects of the proposed reforms and provide links for further information.
Tony O'Malley is Partner in Mallesons Stephen Jaques' Sydney office and Alicia Campos is solicitor in the Melbourne office. Both work in the Telecommunications Team.
Introduction
On 23 July 2003, the Minister for Communications and Information Technology, Senator Richard Alston, announced the federal government's intention to introduce legislation to ban email "spam". While the legislation will be some time in the making, this announcement marks a timely opportunity to reflect on the current and potential future regulation of marketing through electronic media.
A key point to note is that the current and proposed prohibitions seek to distinguish between unsolicited spam and legitimate marketing activities. In essence, marketing which is requested, consented to or within persons' reasonable expectations or within an existing business relationship should remain permissible. The government has indicated an intention to develop a practical system which permits legitimate marketing but prohibits harassment.
"Spam"
The term "spam" is used for unsolicited electronic marketing or electronic "junk mail" and is readily associated with pornography, scams and black markets. While spam is most frequently used in the context of unwanted advertising e-mail, it is increasingly applied to marketing received via short message service (SMS) and other wireless marketing technologies (such as wireless applied protocol (WAP), multi-media message service (MMS) and third generation technology (3G)).
E-mail spam is still the most prevalent form of spam given its low cost, the ability to include more information in each message and the viability of global internet commerce. However SMS spam is on the rise, particularly with the introduction of bulk discount and web-based SMS generating products. Accordingly, both e-mail spam and SMS spam have attracted recent regulatory attention.
The vice of spam
It is the intrusive nature of spam that arouses concern. Although some traditional forms of paper marketing are dubbed "junk mail", when unwelcome ultimately these materials can be easily disposed of and even recycled. In contrast, electronic spam has been said to threaten the very future of e-mail and SMS as legitimate forms of communication. Electronic spam takes up data usage allowances, which are considerably limited in the case of SMS. Electronic spam is time consuming to delete and invades valuable business hours. Further, there is something intrinsically personal about receiving a message sent to an e-mail address or mobile phone number - this marketing is more targeted than a random leaflet deposited in a letterbox.
Current regulation
Privacy Act 1988 (Cwth)
The recently introduced National Privacy Principles (NPPs) touch on direct marketing methods. In order for a corporation to use a person's personal information for marketing purposes (eg by e-mail or SMS), that use must be permitted by NPP 2.1. That is:
the marketing must be one of the primary purposes for which the person's personal information was collected;
the marketing must be a related secondary purpose of collection and be within the person's reasonable expectations; or
the person must have given consent (either express or implied) to the use of their personal information for marketing purposes; or
the person must have been given an opportunity to opt out of the marketing.
Prior to the introduction of the legislation, the Privacy Commissioner published non-binding views that express consent for electronic forms of marketing is preferable.
Australian Communications Industry Forum (ACIF) - SMS Issues Code
The ACIF SMS Issues Code (13 June 2003) is binding on all telecommunications carriers and carriage service providers. This industry specific Code mirrors the Privacy Act provisions above in the specific context of SMS. Additionally, it allows carriers to send "service related messages" and requires carriers to direct organisations with whom it has bulk SMS commercial arrangements to comply with the privacy rules and to terminate those arrangements for non-compliance.
Australian Direct Marketing Association (ADMA) - M-Marketing Code of Practice
The ADMA Code (19 June 2003) is mandatory for all ADMA members. The Code establishes special protections for marketing to children and covers a range of wireless marketing technologies (SMS, MMS, WAP and 3G). Corporations will comply with the Code if message recipients have requested the message, have an established business/contractual relationship or have provided prior consent. A tangential initiative is ADMA's mobile marketing opt-out service which allows consumers to contact ADMA and have their names removed from mobile marketing campaigns.
Proposed email spam legislation
The drafting of the legislation will take place in consultation with industry (particularly Internet Industry Association (IIA) and the Australian Information Industries Association (AIIA)), will be in line with the Privacy Act provisions and enforced by the Australian Communications Authority (ACA). It is contemplated that the legislation will only cover e-mail spam.
The legislation will:
ban the sending of commercial electronic messages without the prior consent of end-users unless there is "a customer-business relationship" (presently undefined);
impose a range of penalties for breaking the law including fines, infringement notices and the ability to seek injunctions;
require all commercial electronic messages to include an opt-out mechanism and the sender's contact details;
ban the use of e-mail addresses harvesting software; and
aim to co-operate with overseas organisations to develop international guidelines and mechanisms to battle spam.
Only Australian originated spam will be targeted and businesses will have a 120 day "sunrise period" to bring their practices into line once the new legislation commences.
Senator Alston's Office and the National Office for the Information Economy have proclaimed the steps as world-leading. Legislation in several US States and European Union directives are less ambitious in scope.
Considerations for business
In anticipation of the new legislation and mindful of the current regulatory regime, businesses should:
obtain advice as to which legislation applies and its implications;
formulate appropriate marketing strategies, including decisions on implementing opt in/opt out mechanisms;
give appropriate consideration and implement approvals processes in relation to the frequency, content and relevance of proposed messages; and
monitor public response to marketing messages sent.
Useful web-sites
Office of the Minister for Communications, Information Technology and the Arts: http://www.richardalston.dcita.gov.au
Department of Communications, Information Technology and the Arts: http://www.dcita.gov.au
Office of the Federal Privacy Commissioner: http://www.privacy.gov.au
National Office for the Information Economy (NOIE): http://www.noie.gov.au
Internet Industry Association (IIA): http://iia.net.au
Internet Industry Association (IIA) - national spam initiative (including e-mail spam filters): http://iia.net.au/nospam
Australian Direct Marketing Association (ADMA): http://www.adma.com.au
September 2003 contents
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