Direct marketing

Courtesy of H&W, this decision was recently made by the German Federal Court of Justice on the use of consent for marketing purposes.

German Federal Court of Justice issues important Decision on the Use of Consent for Marketing purposes.

"In a decision of July 16, 2008, concerning the lawfulness of certain clauses in the application form for a loyalty card, the German Federal Court of Justice (Bundesgerichtshof) issued important guidance to companies that carry out direct marketing in Germany (Urteil vom 16. Juli 2008 – VIII ZR 348/06). In the case, the Court found the following clause to be partially invalid The decision has significant consequences for conducting advertising inGermany. Most importantly, it makes clear that opt-in rather than opt-out consent is necessary to send electronic marketing, and that the German courtswill not hesitate to invalidate clauses that do not meet this requirement. Moreover, it indicates that any consent to the sending of electronic marketing must be specific, rather than be mixed together with consent for other matters (such as receiving other types of marketing).This means that companies may have to consider redesigning their onlineprivacy policies and consent forms to conform to German legal requirements. (translation of the clause from the original German):

With my signature I agree that the data which I have provided above as well as the discount data (products/services, price, amount of discount, place and date of transaction) will be exclusively stored and used by L. Partner Limited and the partner companies according to number 2 of the attached data protection notice for the purposes of advertisements directed at me (e.g., information on special offers, promotional discounts) via post and, if applicable, by requested services (SMS or email newsletter), as well as for market research purposes.

[ ] Please tick this box if you wish to opt out. ...

The Court held that the wording of this clause may fulfil legal requirements for postal marketing, but that it violates unfair competition law for email and SMS marketing. The Court’s decision was based on the clause in essence allowing electronic marketing under an “opt-out”standard, rather than an “opt-in” standard as required by the relevant section of the German Unfair Competition Act that implements EU E-Privacy Directive 2002/58. Moreover, the Court stated that a specific declaration that the user opts in to receive electronic marketing is necessary. Advertising by post According to the Court, sending advisements by post does not require opt-in consent, and is permitted as long as the customer does not object to the advertisement (though the customer must be properly informed about his right to opt out). Advertising by email and SMS. The Court stated that advertising by means of email or SMS is governed not by the Federal Data Protection Act, but by section 7 para. 2 no. 3 of the Unfair Competition Act, and that this requires a separated declaration indicating opt-in consent.

[According to H&W], the decision has significant consequences for conducting advertising in Germany. Most importantly, it makes clear that opt-in rather than opt-out consent is necessary to send electronic marketing, and that the German courts will not hesitate to invalidate clauses that do not meet this requirement. Moreover, it indicates that any consent to the sending of electronic marketing must be specific, rather than be mixed together with consent for other matters (such as receiving other types of marketing). This means that companies may have to consider redesigning their online privacy policies and consent forms to conform to German legal requirements."

For further reading:

• See: Federal Court of Justice Decision (German)