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Direct Marketing » Trends | 22.11.2013

Future of European Data Protection Reform for international Direct Marketing

 

 

Guest contribution by Dr. Ulrich Wuermeling about the importance of the European Data Protection Reform for Dialogue Marketing.

As far as the timetable of the decision-makers in Brussels is concerned, a comprehensive data protection reform is expected to become directly applicable around the year 2016. The reform aims to replace and harmonize the current national laws.
Viviane Reding, the responsible European Commissioner and Vice-President of the European Commission, believes that the reform will be instrumental for the modernization of data protection law, a better protection of personal rights, the development of competition and the economy and for the reduction of bureaucratic burdens. The draft reform bill of the European Commission which was presented on 25 January 2012, however, does not fulfill these goals. Especially in the area of dialogue marketing, it will rather have a detrimental effect.

“On average, European citizens receive less than one personalised promotional letter per day.”

So far, it has been lawful within the European Union to advertise ones’ goods and services via postal mailing of dialogue marketing material. The economic importance of written dialogue with customers and potential customers is a major one, while the actual interference with the addressees’ private sphere remains minimal. On average, European citizens receive less than one personalised promotional letter per day. Thanks to a sensitive selection of addressees, postal dialogue marketing is the optimal type of advertising for all parties concerned.

Cross-border exploration of new markets

Today, addressees only receive advertising they, most likely, are interested in. It is possible to approach potential new customers because companies have the right to use the customer addresses of other companies or data from public sources. This way, new markets can be explored - also across national boundaries. The planned reform of European data protection law jeopardizes these opportunities.

The Brussels proposal contains a number of stumbling blocks for postal mailings of dialogue marketing material as carried out today for the benefit of the addressees:

  • The use of micro-geographical and other categories of anonymised data for selection purposes will be restricted, if it seems possible for any third party to de-anonymise them
  • Addresses which are not collected for advertising purposes will no longer be available for dialogue marketing
  • The use of rented address data for marketing mailings directed at potential new customers will become more difficult
  • If a party discloses addresses to any other party, such party will have to enforce the deletion of these addresses vis-à-vis the recipient of the data, if the addressee demands it
  • All personalised advertising will be overfraught with comprehensive data protection information
  • The commissioning of dialogue marketing service providers will be made more difficult through the introduction of unreasonable bureaucratic obligations

In addition, the European Parliament is already discussing further restrictions. Rapporteur Jan Albrecht of the Green Party, for example, wants to further extend the information obligations which are excessive already in the present draft. Furthermore, he demands the introduction of restrictions for practically any kind of data selection. The customized approach of potential new customers would be impossible under such restrictions.

Permission necessary for contacting potential new customers

One of the practical consequences of the reform will be that the permission of the addressees (the so-called opt-in) will be necessary in many situations, if the addresses are to be used for marketing purposes. Social networks or customer card systems are already working with such opt-in solutions, which are obviously favored by Brussels. All other kinds of companies, however, do not stand a realistic chance to obtain lawful declarations of consent from the data subjects. Thus, competition would be permanently hampered. On top of that, new barriers are being contemplated for the obtaining of a declaration of consent itself. If Brussels succeed with this, all parties concerned will be left without a single solution for approaching potential new customers at the end of the day.

“Social networks or customer card systems are already working with such opt-in solutions, which are obviously favored by Brussels.”

The European plans concerning opt-in solutions also entail immediate disadvantages for the data subject. If a company is forced to obtain a declaration of consent anyway, it will phrase the accompanying text as broadly as possible. Everything which is prohibited under the current data protection regulations will then become lawful by means of the declaration of consent.

The protection of data protection law will be undermined by consent
Nobody has the time or inclination to read pages of privacy information or long texts setting forth the envisaged boundaries relating to the declarations of consent. Therefore, it does not serve the data subjects’ interest to give a privileged status to consent solutions. Instead of burdening citizens with the decision for or against an opt-in solution, it should remain within the responsibility of the legislator to set up the legal framework conditions for data protection.

Postal dialogue marketing is mainly used for gaining new customers and expanding into new markets
The planned European data protection reform is about to complicate access to well-selected addresses for such marketing campaigns. The result will be a far-reaching and actual prohibition on gaining new customers through dialogue marketing.

The only remaining options would be TV spots, adverts in the daily papers or non-personalized mailings
These measures, however, are usually not precise enough in order to efficiently customize advertising. And for most companies, these types of marketing are too expensive anyway. Thus, competition and economic growth would be massively obstructed.
The present proposal does not even guarantee the promised reduction of bureaucratic burdens. Obligations to register with a data protection authority may be abolished, but instead there will be new internal administrative requirements. In sum, this does not make life any easier for companies. Only the data protection authorities will profit by saving a certain amount of time.

Companies afraid of increased administrative effort

For some companies, the contemplated harmonization of data protection rules within the European Union will have positive effects. On closer inspection, however, the proposals from Brussels contain so many loopholes for independent national initiatives that these positive effects will again be curbed. What remains for all companies, are massively increased administrative obligations, so that as yet there can be no talk of a reduction of administrative burdens or of simplifications.

Looking at the area of postal dialogue marketing, it is obvious that the data protection reform discussed in Brussels cannot be instrumental in reaching any of the goals formulated by Viviane Reding. Citizens and the industry alike will only be burdened by further bureaucracy. The gist of the current proposal is a European centralization where comprehensive powers are to be delegated to the European Commission, while the requirements of the business world won’t be met. The currently discussed proposals cannot and will not lead to the necessary modernization of data protection law.

Implementing the reform as it is proposed now will only serve to remove the European Union even further from the development in other countries around the world. The target of reaching a global data protection standard will then no longer be accessible. Hopefully, Brussels will reconsider this reform.

 

About the person

Dr. Ulrich Wuermeling, LL.M. (London) is a Partner in the Frankfurt office of the law firm Latham & Watkins LLP. In the 90’s, he earned his doctorate with a thesis on the subject of “Trade Barrier Privacy”. For many years now, he has represented the interests of the industry in the debate on data protection.