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E-Mail and Direct Marketing in Switzerland

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E-Mail and Direct Marketing in Switzerland Powered By Docstoc
					E-Mail and Direct Marketing in Switzerland
November 2007, published on www.dataguidance.com.


Georg G. Gotschev
Dr. iur., Attorney-at-Law

Dufourstrasse 42
8008 Zurich
Switzerland

Phone +41 44 200 06 73
Fax +41 44 252 06 73

georg.gotschev@gotschev.ch
www.gotschev.ch



I.     E-MAIL MARKETING.....................................................................................................2
       A.      Introduction .....................................................................................................2
       B.      Relevant Acts....................................................................................................2
               a)      Improper Competition Act ........................................................................2
                       aa)      Applicable Rules .............................................................................2
                       bb)      Legal Remedies and Sanctions........................................................2
                       cc)      Conclusion .....................................................................................3
               b)      Telecommunication Act............................................................................4
               c)      Data Protection Act..................................................................................4
                       aa)      Introduction ...................................................................................4
                       bb)      Applicable Rules .............................................................................4
                       cc)      Legal Remedies and Sanctions........................................................5
               d)      Conclusion ..............................................................................................6
II.    DIRECT MARKETING .................................................................................................... 7
       A.      Introduction ..................................................................................................... 7
       B.      Direct Marketing by Regular Mail ...................................................................... 7
       C.      Direct Marketing by Phone................................................................................8
       D.      Direct Marketing by Fax ....................................................................................8
       E.      Legal Remedies and Sanctions..........................................................................9
       F.      Comparison to the Regulation of E-mail Marketing.............................................9
I.     E-MAIL MARKETING

A.     Intr o d uc ti on

Switzerland’s marketing law is not codified in one single act. Thus, the use of e-mail market-
ing is regulated in a number of separate legislative acts. After its recent revision which en-
tered into force on 1 April 2007, the Improper Competition Act is the first act explicitly dealing
with e-mail marketing. In addition, the Telecommunication Act and the Data Protection Act
contain rules which are relevant for the subject treated in the following.


B.     Rel e v a n t Acts

a)     Imp r o p e r Co mp e t i ti on Act

a a)   Applicabl e Rul es

On 1 April 2007, art. 3 lit. o of the Improper Competition Act («ICA») entered into force. Pursu-
ant to this provision, someone is acting improperly, if he

       «sends out or makes someone else send out mass advertising without a direct
       connection to a requested topic without (i) having obtained the prior consent of
       the customers, (ii) mentioning the correct sender or (iii) indicating an unprob-
       lematic and free possibility to decline the advertisement. Whoever receives con-
       tact details of customers when selling goods or providing services and points out
       the possibility to decline, does not act improperly, if he sends mass advertise-
       ment to the customers for similar goods or services without their consent. »

With this provision, the legislator introduced the opt in-principle with respect to e-mail mar-
keting. As a consequence, an advertisement send by e-mail must in any case contain the
correct details of the sender and indicate an unproblematic and cost-free possibility to de-
cline further advertisement. This situation resembles the principles applicable to e-mail
marketing in the European Union.


bb)    L eg a l Re m e di es a nd Sanc tio ns

The following paragraphs shall give a general overview over the measures that can be taken
against unlawful e-mail marketing.




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Firstly, art. 9 ICA introduces certain defensive rights referring directly to the elimination of
the disturbance created by the advertisement. Art. 9 ICA establishes a right for injunctive
relief (al. 1 lit. a), a right to eliminate the disturbing advertisement (al. 1 lit. b), a right to
obtain a court decision stating that the e-mail advertisement was unlawful (al. 1 lit. c) as well
as a right to correct the created situation and to require that the court decision is published
(al. 2). In order for the mentioned defensive claims to be successful, it is sufficient to establish
the unlawfulness of the objected e-mail distribution. No fault is required on the side of the
sender.

Secondly, art. 9 al. 3 ICA gives the customers the possibilities to claim (i) damages, (ii) moral
restitution (Genugtuung) and (iii) an account of the profits (Gewinnherausgabe) obtained by
such advertisement. Compared to the defensive rights established in art. 9 al. 1 ICA, the legal
remedies offered by art. 9 al. 3 ICA are of lesser importance as the damages are often either
quite small or cannot be substantiated.

The above mentioned claims can be brought forward by anyone who has been threatened or
harmed by the improper competition with respect to his clients or his professional reputation
(art. 9 al. 1 ICA). Pursuant to art. 10 al. 2 ICA, professional and economical associations, con-
sumer protection organizations and the State of Switzerland can also bring forward claims
based on art. 9 al. 1 and 2 ICA. The term client in art. 9 al. 1 ICA is understood in a broad way.
Thus, a person who receives e-mail advertisement is also entitled to sue the sender.

Finally, art. 23 et seq. ICA contain criminal law provisions which are applicable in case of a
breach of art. 3 – 6 ICA and of art. 3 lit. o ICA in particular. These criminal law provisions are
prosecuted only upon request of the concerned person (Antragsdelikte) and the right to file
such request is tied to the entitlement to bring forward a civil right action in the sense of art.
9 al. 1 ICA. The penal provisions require a wilful misconduct (Vorsatz) of the offender. The
intended penalties are either a fine of up to CHF 100,000 or prison of up to three years.


cc)   Conclusion
As of 1 April 2007 a special clause applying to e-mail advertisement has been introduced into
Swiss law – art. 3 lit. o ICA. Therewith, e-mail advertising is not only relevant from a civil law
point of view but also from a criminal law point of view. As a consequence, the legal protec-
tion for a person negatively affected by e-mail marketing has not only become broader but
also simpler, as the competent criminal law authorities have to become active upon the filing
of a request for penalty (Strafantrag). However, some voices doubt that the recently intro-




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duced regulation will be extremely effective. They suspect that a Swiss spammer could hide
his identity by processing its actions through networks outside of Switzerland.


b)     Tel e c o m m unic a ti on Act
Together with the introduction of art. 3 lit. o into the ICA, certain clauses of the Federal Tele-
communication Act («TA», Fernmeldegesetz) have been amended in order to better regulate
e-mail marketing.

Firstly, art. 1 al. 2 lit. d TA was revised, stating that one of the goals of the TA is to protect the
users of telecommunication services from improper mass advertisement. Secondly, the
parliament decided to introduce art. 45 al. 2 into the TA, which reads as follows:

       «Whoever needs [this] data in order to identify improperly established connec-
       tions or improper mass advertisement has the right to request that the offeror of
       telecommunication services discloses the name and address of the incoming
       connection. (der ankommenden Anschlüsse).»

As for now, it remains unclear, whether this provision will be applicable in the area of e-mail
marketing. The most recent legal doctrine states that this provision should not be reduced to
the area of direct marketing by phone, as its wording could suggest.


c)     D a t a Pr o t e c ti on Act

a a)   Intr o d uc ti on
For e-mail marketing to be successful, it is imperative to know the e-mail-address of the
addressee. This can be achieved in different ways. For instance, software solutions automati-
cally scanning the internet for published e-mail addresses exist. As an alternative, some
computer programs automatically generate e-mail addresses by creating them randomly.
Whether data contained and obtained in such a way falls within the scope of the Federal Data
Protection Act («DPA», Datenschutzgesetz) shall be examined in the next paragraphs.


bb)    Applicabl e Rul es
The aim of the DPA is to protect the privacy and the fundamental rights of the persons whose
data is processed (art. 1 DPA). The fundamental principle for the processing of data by private
persons in Swiss law is, that whoever processes personal data may not illegally infringe the
privacy of the concerned persons (art. 12 al. 1 DPA). Pursuant to art. 3 lit. e DPA, any operation




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with regard to personal data, irrespective of the applied means and procedures, is consid-
ered to be a «processing of data».

Art. 12 al. 2 DPA contains a non exhaustive enumeration of cases in which the processing or
the disclosure of data is deemed to be unlawful. For instance, the privacy of a person is in-
fringed if (i) the personal data has not been collected in accordance with the law (art. 4 al. 1
DPA), (ii) if the processing is not fair, lawful and appropriate (art. 4 al. 2 DPA) and (iii) if the
personal data is not processed for the purpose indicated at the time of the collection or as
provided by the law (art. 4 al. 3 DPA). Furthermore, the processing of inaccurate data (art. 5
DPA) and the inappropriate protection of the data against unauthorized processing (art. 7 al.
1 DPA) are deemed to be unlawful. The same holds true for the processing of data against the
will of a person (art. 12 al. 2 lit b DPA) or for the disclosure of sensitive personal data or of
personality profiles in the sense of art. 3 lit. a and c DPA to third persons.

E-mail addresses are personal data in the sense of art. 3 lit. a DPA, if they refer to a person
that already is or that can be identified. Thus, the collecting and a collection of e-mail ad-
dresses fall into the scope of the DPA. Consequently, all of the described obligations under
the DPA must be observed by the person processing the data. The fact that e-mail addresses
are collected with the purpose of dispersing advertisement does not change the legal situa-
tion as far as the DPA is concerned, as long as the customer is aware of the reason for which
his data is stored.

Where the purpose is not evident or where the information on the e-mail addresses is used
for purposes other than intended, this has to be communicated clearly and any questions
with regard to how the e-mail addresses have been obtained must be answered correctly.
This duty will be introduced on 1 January 2008 by art. 8a DPA.


cc)   L eg a l Re m e di es a nd Sanc tio ns
As stated in its art. 1, the DPA only protects persons whose data are processed. It offers them
the right to request information from the controller of the data file (art. 8 al. 1 DPA). Pursuant
to art. 8 al. 2, the controller of the data file must communicate to the concerned person what
data relating to him is processed as well as – this (second) duty of the controller will enter
into force on 1 January 2008 – all available information regarding the provenance of the data.
As a rule, the information has to be communicated in writing and free of charge according to
art. 8 al. 5 DPA.




                                                                                                       5
Art. 15 al. 1 DPA refers to art. 28 – 28l of the Swiss Civil Code as far as legal claims and provi-
sional measures regarding the protection of the privacy are concerned. In particular, the
plaintiff may require that personal data is rectified, destroyed or that the disclosure of such
data to third parties is blocked. The protective provisions of civil and public law are rein-
forced though additional criminal law sanctions: Pursuant to art. 34 al. 1 DPA, private bodies
that breach their duty to provide information to a concerned person, as set out in art. 8 – 10
DPA, and intentionally provide false or incomplete information, shall be imprisoned or fined
upon request of such person. With the imminent entry into force of the revised DPA on 1 Janu-
ary 2008, the breach of the new art. 7a DPA (introducing the duty to inform how sensitive
personal data has been obtained and how personality profiles have been established) will
also fall into the scope of the criminal law provision stated in art. 34 al. 1 DPA.

As far as e-mail advertising is concerned, the rules of the DPA are of great importance. The
core element in the spam-area is the illegality of the processing of data if such processing is
carried out against the will of the concerned person. Such person can request that its e-mail
address is deleted from the distribution list. Furthermore, it can, based on art. 28a al. 3 CC,
claim damages, even if the damage will often be very small and difficult to prove. The princi-
ples that the processing of the data must be fair, lawful and proportionate (art. 4 al. 1 and 2
DPA) suggest that a clandestine procurement of data is inadmissible. Therefore, software
programs scanning the internet and collecting e-mail addresses automatically or generating
e-mail addresses on their own, breach the DPA. It is not in the sense of the recipient who
published his e-mail address on the internet in order to be contacted, be it for private or for
business purposes, that he becomes the target of uncontrolled e-mail advertisement. The
Federal Data Protection Commission has come to the same conclusion. It is of the opinion
that the collector of e-mail addresses cannot prove that the use of an e-mail address, which is
freely accessible on the internet, has not been forbidden, particularly when the address has
been collected automatically. The same holds true where e-mail addresses have been gen-
erated randomly. In addition, the Commission states that its conclusion remains the same
even if the sender of such e-mail advertisement offers a possibility for the customer to opt
out. The opt out-solution can only be seen as appropriate if the (initial) delivery of the e-mail
has been made in accordance with the law.


d)    Conclusion
As already set out, e-mail marketing is regulated by different laws in Switzerland. At the
moment, very few court decisions have been pronounced on this issue. The recent introduc-




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tion of criminal law remedies as well as the fact that the competent criminal law authorities
have to become active upon request of a customer could make it easier for customers to
proceed against unrequested e-mail advertisement, at least if the sender is located in Swit-
zerland. This possibility is enhanced by the right to obtain information on the sender from the
telecommunication companies pursuant to art. 45 al. 2 TA. However, the difficulty to enforce
such rights on an international level has not been eliminated.



II.     DIRECT MARKETING

A.      Intr o d uc ti on
The following paragraphs shall treat the regulation of the three regularly used means for
direct marketing in Swiss law: the direct marketing by regular mail (B.), by phone (C.) and by
fax (D.). Then, the legal remedies and sanctions of the customers shall be described (E.) be-
fore making a short comparison of the regulation of direct marketing to the one regarding e-
mail advertisements (F.).


B.      Di r e c t M a r k e t ing by Reg ul a r M a il
There are two different ways of marketing by regular mail (Briefkastenwerbung): the person-
ally addressed letter and any advertisement not directly and expressly addressed to the
recipient.

The unaddressed version is considered as admissible amongst Swiss scholars with view of
the ICA because it is can easily be identified as an advertisement and then sorted out without
disturbing the recipient. Furthermore, the widespread “no advertisement” stickers on the
letterboxes guarantee a good protection against impersonal advertisement.

Opposed to that, a personally addressed advertisement letter could fall into the scope of art.
3 lit. h ICA. Pursuant to this provision, a person is deemed to act improperly, if he exercises an
influence on the decision making process of the customer applying particularly aggressive
sales methods (besonders aggressive Verkaufsmethoden). Where the customer has explicitly
stated that he does not whish to receive advertisement letters, art. 3 lit. h. ICA could be
violated, if this is seen as a particularly aggressive sales method. The majority of legal doc-
trine does not follow this opinion. However, there are no court precedents confirming this
view.




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In view of the above, it can be said, that direct marketing by regular mail is, in principle,
admissible in Switzerland.


C.     Di r e c t M a r k e t ing by Phon e
Direct marketing by phone is not generally forbidden in Switzerland. However, art. 65 al. 1 of
the Ordinance on the Telecommunication Services states that any person registered in a
directory can clearly state that he does not want to receive advertisement and that his data
may not be passed on for the purpose of direct marketing. Usually, a (small) star behind the
name of the person in the directory indicates that a customer has made the choice to opt-out.

Basically, telephone marketing does not have a bigger influence on the decision of the cus-
tomer than an unexpected personal visit from a salesperson. Furthermore, consumers have
the right to rescind a contract concluded on the telephone during a period of seven days
pursuant to art. 40b lit. a of the Swiss Code of Obligations. Nonetheless, a large parte of the
legal doctrine is of the opinion that direct marketing by phone is a model case falling into the
scope of art. 3 lit. h ICA.

On the other hand, the revision of the ICA and of the TA with respect to the treatment of e-
mail marketing could be seen as a confirmation that the legislator does not generally want
to treat telephone marketing as an improper mean of advertisement. Still, there is a possi-
bility that, in singular cases, art. 3 lit. h ICA is violated, particularly if the salesperson aggres-
sively urges a customer to buy the offered products.


D.     Di r e c t M a r k e t ing by Fa x
Some legal authors argue that the unrequested sending of advertisement by fax is generally
improper – with the exception of some hours during the night – and thus not admissible,
because it blocks the telecommunication line without the possibility to stop the fax and
because it uses paper, toner and electricity against the will of the customer.

However, as the admissibility of direct marketing by fax has to be examined from case to case
with view of art. 3 lit. h ICA, it is quite difficult to make a general and abstract statement in
this regard. The fact that such advertisement causes some (minor) costs for the customer
does, in my opinion, not make it particularly aggressive in the sense of art. 3 lit. h ICA. How-
ever, this should be examined separately, taking into account the content of the fax.




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E.    L eg a l Re m e di es a nd Sanc tio ns
With regard to the legal remedies of the customers and the applicable sanctions under the
ICE, reference is made to section I.B.a)bb) above.


F.    Co mp a r ison t o the Reg ul a t i on of E- m ail M a r k e t ing
Even if there are some resemblances in the regulation of the traditional methods for direct
marketing and the new regulation of e-mail advertisement as described above – in particu-
larly as far as the applicable sanctions are concerned – there remain significant differences
between the rules applicable to these marketing methods. In view of the current regulation,
one can draw the general conclusion that a marketing method is and has to be regulated
more strictly the more it can be abused and the less a customer can defend itself against it.




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