Marketing: New Zealand to enact anti-spam legislation

The Government is to enact legislation to regulate the sending of unsolicited electronic messages (spam). We look at what is proposed.

The proposed Unsolicited Electronic Messages Act will affect anyone marketing by email and failure to comply with the proposed Act will result in very significant financial penalties.

Prohibiting and regulating unsolicited electronic messages

"Commercial" electronic messages

The Bill will prohibit the sending of all electronic marketing and promotional messages which are "commercial", that have "a New Zealand link", and that are "unsolicited".

A message will be considered to have "a New Zealand link" if:

(a)	a message originates in New Zealand;
(b)	the sender was present in or based in New Zealand at the time;
(c)	the computer, server or device used to access the message is located in New Zealand; or
(d)	the relevant electronic account-holder was present in or based in New Zealand at the time.

However, this will not apply if the sender can show that they did not know and could not reasonably have known of the "New Zealand link".

"Unsolicited" will mean that the recipient has either not expressly consented ("opted-in") to the sending of the message, or such consent cannot be "inferred".

The definition of "inferred consent" is likely to raise considerable debate.

We understand that the Bill will define "consent" as including consent which can reasonably be inferred from the conduct, business and/or other relationships that exist between the recipient and the sender. This definition clearly leaves substantial room for argument.

More controversially, the Bill is also likely to define "inferred consent" as including a situation where a recipient has published their email address in a business context without clearly stating "no junk mail".

"Non-commercial" electronic messages

The proposed legislation will also prohibit "non-commercial" marketing messages designed to "market or promote an organisation's aims or ideals" where the recipient has specifically "opted-out" of receiving such messages.

Exceptions

These types of electronic messages will be exempt from the prohibitions and requirements in the legislation:

• voice calls and facsimile messages;



• quotes or estimates requested by the recipient;



• messages that facilitate, complete, or confirm a commercial transaction to which the recipient has previously agreed to enter into with the sender;



• warranty information, product recall information, or safety or security information for a commercial product or service used or purchased by the recipient;



• factual information about a subscription, membership, account, loan, or similar involving the ongoing purchase or use by the recipient of products or services offered by the sender, or ongoing membership by the recipient of the sender;



• information directly related to an employment relationship or related benefit plan in which the recipient is currently involved, participating, or enrolled;



• delivery of goods or services, including product upgrades, that the recipient is entitled to receive under the terms of a transaction to which the recipient has previously agreed; and



• information on goods or services offered or supplied by a government body.

Other features

Transparency

Under the proposed legislation, all "commercial" and "non-commercial" marketing messages will have to clearly and accurately identify the sender and contain a functional "unsubscribe" facility that allows recipients to opt out of future mailings.

Who is liable?

The proposed Act will not penalise network operators and internet service providers (ISPs) for illegal messages sent without their knowledge.

It will also exclude those who send out illegal messages by mistake or without their knowledge due to a computer virus.

Address-harvesting prohibited

The Bill is expected to prohibit the supply, acquisition and use of "address-harvesting" software and subsequent harvested-address lists.

Timeframe

It is intended that electronic marketers will have a grace period of four months to "get their houses in order" after the legislation is enacted.

The enforcement regime

While the proposed Act contains civil penalties for spam mailing, it infers that ISPs and telecoms carriers will be expected to take initial action on their customer's spam complaints.

The Government's enforcement agency - the Department of Internal Affairs - will oversee and resolve issues that cannot otherwise be satisfactorily resolved.

The Department of Internal Affairs will have a number of enforcement options ranging from formal warnings through to injunctions and civil legal action.

Financial penalties are also planned, and are likely to include fines with additional penalties equal to any financial gains made from the contravention and compensation for damage to any victims of the contravention.

The maximum proposed penalties for unsolicited commercial messages that breach the prohibitions are likely to be $200,000 for individuals and $500,000 for bodies corporate.

The maximum penalties for the sending of "non-commercial" messages by organisations in breach of the opt-out prohibition is intended to be $50,000.

The Department of Internal Affairs will also have the ability to issue infringement notices with a penalty of $200 per contravention.

The proposed Act will also give those affected by spam - including ISPs, telecoms network operators and spam recipients - the right to take direct legal action against senders.

Conclusion

If the Unsolicited Electronic Messages Bill is passed in its present form, anyone undertaking email marketing in New Zealand - or to individuals or entities in New Zealand - will need to consider:

1. whether their communications will be covered by the legislation; and
2. if they will be, devise a strategy to obtain "opt-in" consents from intended recipients of "commercial" electronic messages.

Clearly, best practice will require both commercial and non-commercial electronic messages to:

• accurately identify the sender; and



• contain a working, clearly visible means of "opting-out" of future emailings.

With this legislation in the pipeline, prudent email marketers will be taking steps now to ensure that their email marketing databases comply will the requirements of the proposed Act and that the necessary changes are made to their marketing email templates.

Enquiries and information

For more information on the proposed anti-spam legislation, please call Garry Williams on 64 9 916 8661.