Viral marketing is taking off in the arts and yet it is still legally a grey area, with little legal precedent to work on. Sean Egan looks at the legal position.
Viral marketing has so many advantages that I am sure its use will continue to grow. However, as it matures from a way of making personal recommendations into a serious means of marketing, legal regulation will start to bite. The Information Commissioner, who regulates this area, probably has not been concerned to date and this may be reflected in there being no specific guidance from him on viral marketing. With the increasing and more sophisticated use of viral marketing this a good time to outline the legal restrictions.
The Privacy and Electronic Communications (EC Directive) Regulations enacted in UK law is a Directive passed by the EU in 2002. This bolsters the protections for consumers in the context of direct marketing by electronic means (i.e. telephone, fax, email, text message and picture). Here the relevant media are email and SMS to which the regulations apply equally.
The relevant Rules are as follows:
" You cannot transmit or instigate the transmission of unsolicited marketing material to an individual unless the person receiving has previously consented.
" You cannot transmit or instigate the transmission of unsolicited marketing material to anyone (i.e. an individual or corporate body) where the identity of the sender is disguised or concealed, or a valid address for an opt-out is not given.
Clearly, this can apply to viral marketing as the sender can be seen as instigating the onward transmission. The question is, in effect, whether the person forwarding (i.e. the initial recipient) does so as the senders agent. First, you need to assess whether you comply with the rules in relation to the initial recipients and then to assess whether these rules apply to the forwarding of the message and, if they do, how that affects the messages you can send.
Do the Rules apply?
You should try to distinguish between:
" Messages that are essentially casual, where you are making a personal recommendation and have not been requested to forward the message
" A message that is clearly a means of marketing a product (a show or exhibition, for example) and where the recipient is requested to forward the message; and
" An essentially informal email requesting you to forward the message.
In my view, the first of these falls outside the Rules as the choice to forward is with the recipient; the second falls within the Rules even though the ultimate recipients are not known to the sender; and the third may or may not fall within the rules.
If rewards or incentives are offered to the initial recipient in order to forward the message that is a good indication that this is marketing activity and that the rules apply. There are many variations on my categories and each example needs to be looked at on an individual basis.
If the Rules apply
If the Rules apply (and assuming ultimate recipients are individuals) then you need to look at the issue of consent. If the initial recipient has previously asked his/her contacts whether they would like to receive information about shows and only forwards information to them then this limb of the rules is satisfied. I would recommend to viral marketers that the marketing message states that where the message is forwarded to individuals they have indicated their wish to receive such information. If the initial recipient does not comply with the requirement then the sender, though strictly in breach of the Rules, is in a much better position to establish good faith in sending the message. There is also the prospect that the recipient who forwards the message is himself/herself in breach of the Rules.
The requirement not to conceal the identity of the sender should be complied with in any event so that the means of forwarding the message should not hide the originators identity. The opt-out address is more problematic. I would suggest that the realistic means of enabling unsubscribing is for the person forwarding the message to accept responsibility. As with the issue of consent, the sender should require the person forwarding to edit the list of onward recipients, but this may be insufficient to absolve completely the sender from liability.
As you can see, the net practical effect of the application of the Rules is to impose requirements on the initial recipient that may deter him/her from forwarding the messages.
Data Protection
The above requirements are in addition to Data Protection law. The great advantage of viral marketing is that the message is sent to new contacts and as such data protection issues are usually side-stepped. The issue then remains as to the storage of the initial recipients details. The issue of data protection registration will need to be addressed at the earliest stage.
As viral marketing comes of age and becomes more professional in its use I would expect the Information Commissioner to issue specific guidance and become more involved in regulating this form of marketing.
Sean Egan is Head of the Theatre & Arts department at Bates Wells & Braithwaite solicitors. For further details see http://www.bateswells.co.uk.