Direct Marketing and unsolicited communications
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In addition to introducing new regulations for the telecommunications sector (more information available here) and the regulation of so-called cookies (separate article here), the new Electronic Communications Act (No. 452/2021 Coll.), also changes the regulation of direct marketing and unsolicited communications (spam). Below we discuss this topic which cuts across all business sectors.
Conditions for direct marketing
Compared to the previous regulation, the new regulation goes into more detail and also introduces a definition of direct marketing, which was missing in the previous regulation. The term direct marketing covers any form of presentation of goods or services in written or oral form, sent or presented by means of a publicly available service directly to one or more users. This definition covers a broad range of activities serving to promote entrepreneurs by electronic means, such as sending so-called newsletters and commercial offers by email, contacting users by telephone, etc.
Direct marketing requires (as under the previous regulation) the prior consent of the addressee, however certain exceptions to this rule exist.
Direct marketing based on consent
When carrying out direct marketing based on consent, the consent must meet the requirements under the GDPR (Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, "GDPR"). Such consent must therefore be:
- Freely given, which requires it to be given voluntarily, without any element of compulsion or other inappropriate influencing the person in expressing will whether or not to grant consent. There must be a real possibility of choice between giving or refusing consent.
- Specific, therefore the purpose for which consent is given must be clearly defined.
- Given in advance and based on clearly and comprehensibly provided information based on which the addressee can make an informed choice.
- Given by an unambiguous statement or by the performance of an unambiguous act confirming the giving of consent. Obtaining consent by silence, passivity or by an implied act which does not unambiguously express the consent is excluded. An active act that can be interpreted as consent beyond any doubt is required.
- There must be a possibility to withdraw consent already given and the person giving consent must be informed of this possibility, including instructions on how to withdraw consent.
Consent obtained for direct marketing must be kept on a durable medium (this also applies to consent withdrawal). The retention period for consent and consent withdrawal is at least four years after withdrawing the consent.
How to obtain consent?
The new law explicitly prohibits the use of automated and communication systems without human intervention, telefax, electronic mail and short message services (SMS) to obtain consent. Thus, it is not possible, e.g. firstly ask by email for consent to receive the marketing materials.
Calling (by a human, not an automated system) to obtain prior consent is not prohibited and is therefore one way to obtain consent. In doing so, it will be necessary to properly document granting the consent. When consent is obtained, it must be made clear how consent can be withdrawn.
Another way to obtain consent may be to subscribe to commercial communications, when the recipient decides to receive the marketing materials. Whenever contacted, the recipient must be given the opportunity to easily and free of charge opt-out of receiving commercial communications at any time (e.g. unsubscribe by clicking on a link provided directly in the commercial email).
When is direct marketing allowed without consent?
The new law provides the following categories of exceptions when the consent of the recipient of direct marketing is not required:
The first exception involves marketing of own identical or similar goods and services, using contact details for the delivery of electronic mail that the person carrying out direct marketing has obtained in the past when providing his own goods and services. In practice, this exemption may apply, for example, if someone has shopped at a particular e-shop and subsequently that e-shop would send them an offer of similar goods to their email. However, the wording of the law requires that the advertised goods and services must be of the same or similar nature as those in relation to which the recipient's contact information was obtained. This means that it is not possible to use the contact details obtained to promote completely different goods or services, and it is also not possible to provide the information obtained in this way to third parties, e.g. to provide the email obtained this way to an advertising agency engaged in direct marketing.
Another exception to the obligation to obtain prior consent allows the addressee – an individual which is an entrepreneur or a legal entity - to be contacted via publicly available contact details. It may be the case, for example, that freelancers who publish their contact details in connection with their business will often be contacted in connection with direct marketing of goods and services. On the other hand, the recipient of the e-mail must have the possibility to easy and free of charge opt-out of the use of the contact details for direct marketing at any time. Thus, based on the opt-out principle, such persons may request that commercial communications will no longer be sent to them. The opt-out principle also applies to commercial calls.
Sending electronic mail from which the identity and address of the sender to whom the recipient can send a request to stop receiving such messages is not known is prohibited.
Marketing calls
The word “call” is currently not included in the list of means by which direct marketing may be carried out with the consent only. The new legislation requires prior consent for direct marketing via automated calling and communication systems without human intervention. This could be understood that personal telephone calls - i.e. person-to-person calls - have been exempted from the requirement to obtain prior consent.
The loophole created for human-to-human marketing calls will disappear from 1 August 2022, when the provision of section 116(12) comes into force, which regulates the obligation for persons carrying out direct marketing via telephone services (human-to-human calling, automated voice and communication systems without human intervention, SMS) to use for these purposes only numbers identified by a national target code for this purpose in the numbering plan.
From 1 November 2022, the last part of the law, which introduces the so-called opt-out regime for calling, will also enter into force. A special list will be created to register telephone numbers whose users do not wish to be contacted for direct marketing purposes. The right to register a number in the list will be free of charge, but the direct marketer verifying if the number is registered in the list will be required to pay a fee.
The above-mentioned exceptions will also apply in relation to listed numbers: the prohibition of calls will not apply to direct marketing of the subscriber's own similar goods and services by a person who has obtained the subscriber's contact details in connection with the sale of similar goods or services or with whom he has a contractual relationship, and also for the purpose of direct marketing to a subscriber who has himself demonstrably requested such communications in advance.
The details of the list will be provided by an implementing regulation of the Authority.
Summary
Non-compliance with the direct marketing rules is subject to heavy fines which may be imposed by the Office for Electronic Communications and Postal Services to legal entities and sole entrepreneurs ranging from EUR 200 to 5% of their turnover.
It should be noted that the processing and collecting of contact data used for direct marketing purposes must also comply with the GDPR and Act No. 18/2018 Coll. on the Protection of Personal Data. Failure to do so may result in a fine by the Data Protection Authority of up to EUR 20 million or 4% of the company’s total global turnover.
In addition to the Electronic Communications Act, the Advertising Act and the E-Commerce Act may also apply to commercial communications and their provisions will also need to be considered.
