We have had a Halloween that has been variously accepted in our country, followed by the less controversial All Souls' Day. And just on that day, the Personal Data Protection Office ("PDPO") published one, rather scary fine of CZK 7.7 million. The fined company sent commercial communications to promote third parties without the prior consent of the recipients. Therefore, the PDPO has strongly warned that it will sanction illegal practices in the area of direct marketing communications with quite “scary” penalties.
The shipping company was for a longer period of time inserting promotional texts about third-party services and goods in emails sent to customers, by which it was confirming receipt or processing of their orders. However, according to the PDPO, it was not authorised to send these commercial communications because:
- prior consent to sending commercial communications to the recipients was not obtained;
- the emails sent were not clearly marked as commercial communications;
- the identity of the entity for whose needs the commercial communication was distributed was not clearly stated;
- the recipients did not have the option to unsubscribe from receiving these emails containing commercial communications (simple opt-out).
Let's review the basic rules. The statutory requirement for sending commercial communications is either the recipient’s consent meeting the statutory requirements or the use of a so-called “customer exemption”.
Consent must be given in advance, specific (to sending commercial communications), voluntary and demonstrable (an entrepreneur must prove that it has been obtained). Consent can be obtained as part of the ordering process, during customer registration for an e-shop or loyalty club, or during a consumer contest. This is the option of an active opt-in from the recipients of marketing communications.
The customer exemption applies when an entrepreneur sends a commercial communication to a customer who has made a purchase of goods or services from such entrepreneur. Whether it is possible to become a customer for this purpose otherwise is not yet established. In any case, it is not necessary to require the customer's consent (opt-in), but it is sufficient to allow the expression of disagreement (opt-out). Inorder to apply the exemption, the communication must also relate to the entrepreneur's own similar products or services. Thus, the fined company would not have infringed the law if it had promoted its own services or discount promotions. However, in order to send commercial communications in favour of third parties, it already needed the prior consent of the recipients.
Any message directed at consumers which, by its nature, can be considered a commercial communication must be clearly identified as such. In short, it must be clear from the subject of an email that the email relates to marketing. In the present case, part of the text of the confirmation emails was a commercial communication without the email being identified as such.
Any commercial communication must clearly state who is offering the goods or services. When concluding a contract, it is not only the content of the contract that is important, but also who is a party to the contract. For this reason, it is crucial for consumer protection that the identity of the sender of a commercial communication is clear.
The fined company incorporated commercial communications into emails that would otherwise not be commercial communications, but so-called transactional communications. The line between these types of communications can be quite thin and was clearly crossed here. The recipients apparently did not have the option to opt-out of receiving commercial communications, which every commercial communication must otherwise contain.
Millions in fines
The record-breaking penalty is justified by the long-term violation of the statutory conditions for sending commercial communications and the fact that unsolicited commercial communications were sent to more than 40 million entities. The amount of the fine is out of line with previous fining practice. It is imposed in the maximum quarter of the statutory range and an order or two higher than is common for commercial communications, although fines of millions of Czech crowns have already been imposed for spam in the past.
Thus, those who are not already doing so should review their settings and procedures, improve their legal education about marketing, and review their communication templates... Because a poorly worded email... addressed to a large number of recipients... which can cost millions in fines... even that is sent by a single c-l-i-c-k. And the authorities are watching...
