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De Jure

On-line version ISSN 2225-7160
Print version ISSN 1466-3597

De Jure (Pretoria) vol.47 n.1 Pretoria Jan. 2014




Direct marketing and spam via electronic communications: An analysis of the regulatory framework in South Africa


Direkte bemarking en spam deur middel van Elektroniese Kommunikasies: 'n ontleding van die regulerende raamwerk in Suid-Afrika



Bernard HamannI; Sylvia PapadopoulosII

IBCom(Law) LLB. Academic Associate, University of Pretoria
IIBLC(UP) LLB(UP) LLM (UP). Senior Lecturer, University of Pretoria




Hierdie artikel weerlê die feit dat die reguleering van "spam" en direkte bemarking aanlyn nie holistiese aandag geniet nie en dat die gefragmenteerde benadering in terme van die Wet op Elektroniese Kommunikasies en Transaksies 25 van 2002, Wet op Verbruikers-beskerming 68 van 2008 en die Wet op Beskerming van Persoonlike Inligting 4 van 2013 ongewens is. Dit het die gevolg dat verbruikers onvoldoende beskerming geniet en 'n onvermoë van die reg om "spam" en direkte bemarking aanlyn effektief te beheer.
Terwyl aanlyn direkte bemarking en "spam" tot 'n mate oorvleuel is "spam" 'n wyer konsep as direkte bemarking. Dit is belangrik om in gedagte te hou dat nie alle direkte bemarking "spam" is nie, en nie alle "spam" direkte bemarking is nie. Die beperking van die regulering van "spam" tot kommersiële kommunikasies of selfs die meer noue konsep, kommunikasies wat met direkte bemarking betrekking het, is nie voldoende nie omdat daar dan steeds baie verskillende tipes "spam" is wat nog ongereguleerd sal bly.
Die artikel argumenteer dat hoewel onlangse regulatoriese veranderinge kan gesien word as 'n verbetering op die vorige posisie in sekere aspekte, is daar nog meer aspekte wat onaangeraak bly en daar is 'n paar bepalings wat nuwe probleme skep. Ten spyte van die onlangse veranderinge in die regulatoriese omgewing is dit waarskynlik dat verbruikers steeds blootgestel gaan word aan 'n deurlopende stroom van nuusbriewe, meningsopnames, godsdienstige boodskappe, politieke inhoud, virus waarskuwings en virus bedrog, nuus, ketting briewe, haat-pos en noukeurige vervaardigde elektroniese kommunikasies wat bedrieglike of misleidende inhoud bevat.



1 Introduction

From a consumer protection point of view, spam and direct marketing are regulated by certain industry-specific self-regulatory guidelines and codes of conduct,1 section 45 of the Electronic Communications and Transactions Act2 (the ECT Act), as well as through newer legislation such as the Consumer Protection Act3 (the CPA). Once it is fully in force, the Protection of Personal Information Act4 (the PPI Act)5 will repeal section 45 of the ECT Act and replace it with chapter 8, sections 69-71, entitled "The rights of data subjects regarding direct marketing by means of unsolicited electronic communications, directories and automated decision making."6 Despite the PPI Act's intention to repeal section 45 of the ECT Act, on the 26th of October 2012 the Department of Communications published the proposed Electronic Communications and Transactions Amendment Bill7 (the draft ECT Act Amendment Bill) wherein it is suggested that section 45 be retained, or re-enacted, albeit in an amended form.8

The purpose of this article is firstly, to present a brief cursory overview of the abovementioned changing legislative paradigm for spam and direct marketing via an electronic communication and secondly, to critically examine the changes that new legislation has or will introduce within that framework. The article builds on previous research published9 but is distinguished due to the fact that the final version of the PPI Act differs materially to previous versions published10 and takes into account the recently published draft ECT Act Amendment Bill [2012].


2 Direct Marketing vs Spam

2 1 Introduction

Unsolicited electronic communications range from bothersome to destructive, irritating to offensive, they are an abuse of resources and they can be a threat to email and internet security.11

While online direct marketing and spam do overlap to some degree, there are notable differences. It will become evident to the reader that spam is a wider expression than direct marketing and therefore it is important to keep in mind that not all direct marketing is spam and not all spam is direct marketing. With this in mind, this article aims to focus on the current legislative trend, which has opted to regulate direct marketing only.

2 2 Direct Marketing

From a marketing perspective, direct marketing is a system of marketing where the marketer communicates directly with a customer with the goal that the interaction will exact a measurable response and/or transaction.12

From a legal perspective, South African legislation defines direct marketing in section 1 of the CPA and section 1 of the PPI Act, as an approach to a person (or data subject in the case of the PPI Act), either in person or by mail or electronic communication, for the direct or indirect purpose of promoting, offering to supply, in the ordinary course of business, any goods or services or to request a donation of any kind.13

Practically therefore, in terms of these definitions, any method that can be used to deliver an electronic communication to an existing or potential customer for the direct or indirect purpose of promoting, offering to supply in the ordinary course of business, any goods or services or to request a donation of any kind, would amount to direct marketing online, including but not limited to:

Mobile cellular text and video messaging (SMS or MMS) which is sent directly to the user's device;

Mobile device applications (Apps) often contain interactive advertisements that appear inside the app;

Email marketing;

Search engine optimisation, where meta-tags (keywords written in computer code, which are invisible to the end-user and describe the contents of websites that are recognised by search engines) are used to associate specific websites with specific keywords in order to target people searching for those keywords using search engines like Google. The more often a keyword appears in the hidden code of a website, the higher the search engine will rank the website in the displayed search results, that is, delivered as website or communication by electronic transmission;14

Pay-per-click advertising is similar to search engine optimization in that this form of advertising also uses keywords that consumers are searching for to deliver the electronic communication (website) directly to the searcher. The difference is that with pay-per-click advertising, advertisers bid on certain keywords and the advertiser willing to pay the most for a keyword will ensure a prominent placement in the search result listings that will be displayed first. The advertiser only pays if the consumer clicks on the link;15

Social media marketing;16

Affiliate marketing;17

Banner advertising (mobile and internet), includes static banners on websites and pop up adverts and are a form of interactive advertisement that appears next to or over existing website content;

Voicemail marketing, that is, where an advertisement is recorded on a personal voice mailbox; and

Couponing, where manufacturers and retailers make coupons/discounts available for online electronic orders which can be available on company websites, social media, texts or emails and a methodology which is gaining popularity in South Africa in the so-called "daily-deal" websites which offer online deals each day. Customers sign up to receive notices of discounted offers or to receive coupons.18

It is submitted that all of these amount, in one way or another, to direct marketing via an electronic communication as defined above.

However, in order for direct marketing to be successful, marketers need to address a target audience and, in order to accomplish that, they need information in the form of names, prospects and/or business leads, together with certain other relevant information such as contact details in the form of phone numbers, addresses and email addresses; demographic details and purchase habits/history or preferences.19 This information is electronically compiled in a number of ways such as spoofing,20 harvesting,21 dictionary attacks,22 spyware,23 cookies24 and phishing.25

Whether or not our legislative framework is sufficient to regulate all the practices that are related to direct marketing and information collection or compilation falls outside the scope of this paper.

Direct marketing does have an important role in the economy. Marketing has the function of facilitating exchange by creating utility. Utility is created by matching the supply of a product or service with the demand for that product or service, and facilitating the conclusion of the transaction that benefits both the supplier and the consumer.26 Responsible marketing and related advertising practices can therefore be a very useful tool for consumers.

2 3 Spam

Spam can be in the form of direct marketing, but it is wider than just direct marketing, as it may also take the form of solicitation for questionable products, or services, or contain fraudulent or deceptive content. It can also include hoaxes, virus warnings, urban legends, jokes, chain letters, newsletters, opinion surveys, requests for support or donations and hate mail, that is, non-commercial electronic communications. Spam has also been used to distribute viruses and malicious code.27

There are three main trends that can be identified in legislative descriptions for spam: Firstly, "unsolicited electronic messages" (UEM); secondly, "unsolicited commercial electronic messages" (UCE) and thirdly, "unsolicited bulk electronic messages" (UBE).28

The drafters of the ECT Act chose to regulate, not prohibit, the sending of UCE to consumers,29 while the CPA and the PPI chose to limit their protection to direct marketing, arguably a more restrictive version of UCE.30

The unsolicited element of an UCE communication implies that there is no prior relationship between the sender and the recipient and that the recipient has not explicitly given consent to receive the communication.31 It is also a communication that is commercial in nature that seems to relate to messages whose primary purpose is to advertise or promote goods or services.32 Therefore, any communication that is classified as non-commercial would not be regulated under an UCE definition. This would include, but is not limited to, communications such as newsletters, opinion surveys, religious messages, political content, virus warnings and virus hoaxes, urban legends, news, chain letters and hate-mail.33 More importantly, any carefully crafted electronic communication that contains fraudulent or deceptive content will, more than likely, fall through the regulatory net as a non-commercial communication.

An UCE definition therefore concentrates on message content rather than the sender's motivation for sending the message.34 The main reasons advanced for using an UCE definition include: The fact there are no threshold numbers of messages that need to be sent before it qualifies as "spam" and non-commercial messages may be constitutionally protected under the right to freedom of expression and therefore using an UCE definition avoids legal issues that may arise in this arena.35

None of the legislation discussed in this article included the bulk requirement, as an alternative to commercial, as can be found in some foreign jurisdictions. Therefore, a single UCE communication may be classified as spam.36

Geissler argues that the real issue with spam is not about content but the method of delivery. Bulk implies that the message could be a single message sent to a very large number of recipients, or it could be separate but identical copies of a message that are sent to a large number of recipients. The main problem with a bulk requirement is determining the threshold for how many copies constitute a bulk mailing and within what time period they should all be sent.37

Geissler's arguments in favour of an UBE definition include that often the contents of an UCE communication are not objectionable and that the focus should be on the harm that is caused, that is, the fact that it is sent in large quantities rather that the motivation for sending the communication.38 She finally concludes that legislation regulating or prohibiting spam should include the requirements of "unsolicited" and "bulk", that is, an UBE definition rather than an U