Content:
1. Introduction
2. Enforcing section 6a (now section 6) of the Marketing Practises Act
3. The development in the international co-operation to combat spam
The Danish Consumer Ombudsman [CO] supervises a number of Danish acts, which include the Marketing Practises Act, the Act on Payment Instruments, the Injunctions Directive, the Act on E-commerce and the Tobacco Advertising and Promotion Act. Moreover, the supervision of the Consumer Agreement Act and the Consumer Credit Act is also partly CO domain.
Lately a new EU directive concerning unfair commercial practises and a regulation concerning enforcement co-operation arrangements have found their way into the CO administration.
And as we speak, plans to put price marking and traders who trick consumers into paying for advertisements etc. never ordered under CO supervision are being discussed. Likewise, in areas such as health care, schools, child care etc., will new initiatives to put the consumer in a position to choose freely between a number of service providers in the public sector be placed under CO supervision, as will non-lawyer providers of legal services.
At present, 12 people make up the CO’s section. A modest increase of resources has been granted to the CO in next year’s fiscal budget.
Unlike other public bodies, the CO is not competent to rule or decide cases or matters presented to him. He may recommend, persuade or induce trade and business to act in a certain way or inform the public of his opinion. To bring cases before court, in this case the Maritime and Commercial Court in Copenhagen, alternatively the Supreme Court, is also an option available to him; however, less than 1 per cent of all cases are settled this way.
I will now return to the Marketing Practises Act.
The CO pursues the following aims and objectives:
In order to safeguard consumer interests within the existing legal framework we must ensure:
- That readiness to take into consideration consumer responses and the ability to initiate dialogue is always present;
- That dialogue and co-operation with trade and business, interest groups and authorities is working;
- That the CO, through active communication, make his impact felt in the consumer debate;
- That rules and regulations are efficiently enforced.
We take pains to keep business and trade informed about legislative matters and practise: our websites http://www.forbrug.dk/index.php?id=10225196 and www.forbrugerombudsmanden.dk facilitate search for easy-read information for business and trade. We wish to reach as many traders and businesses as possible this way.
The need for joint efforts to combat spam
Spam has been much debated recently, and the timely discussion has resulted in strengthened co-operation between business and trade, organisations and ministries. If spam is to be defeated, co-operation to which all contribute is crucial to see the end of it.
To send unsolicited commercial communication by email is, in general, prohibited unless consent has been obtained from the recipient. This applies irrespective of the recipient’s status whether consumer, trader or public body. Communication resulting from long-term customer relations is excluded to a minor degree, however.
Since the ban took effect, the CO has received a large number of complaints concerning business and trade’s distribution of unsolicited communication. As a solution to this problem, and to keep evidence for further investigation, two spam mailboxes have been created: one for Danish spammers - dansk@spamklage.dk - and one for spam emanating from other countries - int@spamklage.dk.
We receive somewhere between 1,000-1,500 electronic complaints every day in the spam mailboxes. The majority of complaints concern senders from abroad, but we also receive some complaints regarding Danish traders.
Cross-border cases are difficult to investigate and claims are not easily enforced, so the CO has mostly concentrated on cases involving Danish traders so far. However, as the CO recently acceded to a joint EU co-operation agreement concerning practise on cross-border spam, these days may be numbered.
Although spam emanating from other countries constitutes the bigger problem, some Danish traders still do not seem to have got it right. So they do not know the law? Well, we are here to enlighten them.
New, revised spam guideline on the way
In 2000, the CO issued a guideline on section 6a (now section 6) of the Marketing Practises Act (the provision on unsolicited commercial communication), followed up in 2003 with a guideline on long-term customer relations and the exceptions that apply in this connection. However, time is now ripe for an update, and new interpretations need to be included. The new guideline deals with all matters pertaining to section 6a (now section 6), and included are also new rulings and general instructions to business and trade.
At the moment, the guideline is subject to a public enquiry, but we expect it to be due for release in January 2005.
If, as a trader, one is uncertain whether contemplated marketing activities may conflict with section 6a (now section 6), the CO will, on request, issue a statement in which he expresses his view on the legality of the activity.
Substantial fines are necessary due to their preventive effect
Two criminal cases have been tried under section 6a (now section 6) since it took effect on 1 July 2000. The first case involving a Danish company resulted in a fine amounting to DKK 15,000 (€2000) for distributing 156 unsolicited faxes and emails – approximately DKK 100 (€14) for each.
The other case concerned the distribution of somewhere between 7,650 – 15,300 unsolicited faxes where consent had not been obtained in advance. This activity cost the trader in question no less than DKK 400,000 (€53,500). On this occasion, the CO called for a sharp standard procedure in matters involving a violation of section 6a (now section 6) in connection to distribution of unsolicited commercial communication - irrespective of the form of the media. The following fine calculation model was suggested:
A minimum fine of DKK 10,000 (€ 1,500) should be given for 100 instances of violation or less. A DKK 100 fine for each instance of violation should be given in excess of 100 violations. Hence, the fine for 60 instances of violation should amount to DKK 10,000, and 140 instances of violation should amount to a fine of DKK 14,000 (€ 1,900).
The Court accepted the model; however, the size of the fine should be subject to rounding down, depending on the individual case.
The CO is satisfied with the ruling which sanctions the calculation model suggested. He takes it that the size of a fine calculated on the basis of this model will deter potential spammers.
Imposition of substantial fines is needed not only to prevent spam, but also to ensure trade’s compliance with the Marketing Practises Act in general.
Currently, 10 cases concerning instances of violation of section 6s are being investigated – some of them by the police. We hope for a consolidation of the calculation model in future trials as this may result in some heavy fines amounting to DKK 1,000,000 or more.
Improving investigation
A project to make spam investigation even more effective has been launched by the CO. By optimising the current spam mailboxes technically, it is the idea that enhanced search options will provide the CO with better opportunities to choose which spam cases should be reported to the police.
The CO also hopes to be able to a-operate and investigate with Internet service providers [ISP] and spam filter companies in the near future. Exchange of information concerning the number of emails filtered out by the ISP or a spam filter company may prove indispensable in spam cases brought before the court as a supplement to the number of complaints stored in the CO spam mailboxes.
Co-operation with the police
Steps have been taken to increase co-operation with the police for more effective and consistent enforcement following instances of violation of section 6a (now section 6).
Efforts need to be better co-ordinated with the individual police districts, and more and better communication is needed. The police can assist the CO in investigation matters, help solving technical problems with evidence, and help preparing the investigation procedures, including house searches. A public body of limited means, the CO is anxious to make the police able to conduct independent investigation of spam cases soon, so that he may concentrate on international co-operation, among other things.
Spam is a problem recognised and debated worldwide, and so international co-operation against spam is a keystone if we are to succeed.
The CO participates in a number of international forums. It remains an important source of inspiration for his work.
ICPEN (International Consumer Protection Enforcement Network) and ICPEN-Europe
The Nordic COs took the initiative to form the International Consumer Protection Enforcement Network in 1990. Today the network comprises more than 30 countries worldwide such as Mexico, the USA, Canada, Japan, South Korea, New Zealand and Australia, along with most European countries. The Baltic countries have been the latest to join while Chile is in waiting position.
The network meets a couple of times annually to discuss practical measures in relation to actions to be taken against unethical cross-border marketing. The increasing use of Internet and other communication media for marketing purposes give rise to concern in particular.
The CO acceded to ICPEN’s London Action Plan on Spam in October 2004. The action plan deals with issues such as introduction of national points of contact to improve investigation of cross-border spam, and introduction of telephone conferences to provide frequent updates and questionnaires to share experience concerning enforcement and (technical) investigation in spam cases. The network comprises 27 countries around the world, including the USA.
EU networks - the informal co-operation network of CNSA (The Contact Network of Spam Authorities)
The CO is both the national enforcement agent of the EU regulations on spam (Directive EU/58/2002) and the Danish point of contact in relation to spam investigation and EU co-operation as well as in relation to international networks, for instance the FTC in the USA.
As the national enforcement agent, the CO has acceded to the CNSA co-operation procedure on cross-border spam investigation in the EU.
Investigation of spam lies with different enforcement agencies across the EU – the problem of competence
Within the CNSA network, the national consumer authorities supervise and execute spam investigation in 3 countries only. Data protection authorities handle the problem of spam in 8 countries, 3 countries have made the IT and telecommunication authorities their enforcement agency in relation to spam while the enforcement competence is shared between the latter two in 2 countries. This cause a number of problems as to how investigation of spam should be carried out when competencies are differently allocated among the enforcement agents in the network countries.
A government-appointed marketing board has debated whether the competence to supervise and monitor section 6a (now section 6) should lie with the CO or the Data Protection Agency. Professor Peter Blume has advanced that the CO is not the right agent to enforce the provision on spam: it promotes wholes in the legislation. One example is the uncertainty as to whether ‘collection’, distribution and/or resale of email addresses are punishable, and if so, to what extent. Collection and resale of email addresses constitute the core problem in relation to spam, so any doubt as to enforcement competence and the very legality of spam is highly undesirable. The CO does not find it problematic to hand over the enforcement competence in relation to section 6a (now section 6) and spam to the Data Protection Authority; however, this re-allocation of responsibility is currently not favoured by either the board or the Ministry of Justice. Yet neither in 2002 or 2003 were the CO given any resources to enforce the provision on spam.
OECD
The CO participates in the online discussion group EDG concerning spam in OECD member countries. Further, he frequently attends relevant meetings on the spam problem.
Enforcement resources
Spam is in focus nationally and internationally - however, the CO is currently the only authority who enforces the injunction in Denmark.
But the CO has many more functions in connection to his office, and the number of employees at his disposal has decreased over the last 15 years in step with an increase in the supervision tasks delegated to him. This means that the amount of resources that it is possible for the CO to allocate to spam investigation may hit the ceiling very soon.
The need for ISP self-regulation
To think that law enforcement alone can do away with spam is naïve. There is no universal solution to put into effect to see the end of spam. The battle is to be fought on several fronts and by various means.
Consumers can take a number of precautions to reduce spam problems. In co-operation with the Ministry for Science, Technology and Innovation, the CO re-launched his top 10 spam-fighting tips in October – it is now available on the website www.consumerombudsman.dk
Consumers should not be left to their own devices when it comes to tackling spam.
The development of spam-preventing technology is very important in the spam battle. Spam should not even reach consumers.
It will be interesting to see what the ISPs can do reduce the problem. The CO would like to see them formulate a joint position on self-regulation in relation to spam, possibly with the shape of a 'Code of Conduct'.
A call for business and trade to put greater emphasis on ethics, dialogue and responsibility
The CO would like to take the opportunity to suggest that business and trade in general should develop a greater interest for ethics–or the principles of good marketing practises as section 1 of the Marketing Practises Act calls it. The more aware business, trade and their workers become of the image they convey of themselves to consumers, partners, media and the public sector, the more likely it is that the CO does not have to make use of his function as law enforcement agent - and invest large amounts of resources on this.
Taking dialogue and responsibility seriously is the best way to self-regulation for business and trade.
A CO Wish list
I would like to finish this speech with a little list of wishes:
- A substantial standard fine level likely to deter potential offenders
- More co-operation and co-ordination with the police in connection to investigation and enforcement
- More international co-operation on enforcement and cross-border spam which is binding on the participating countries
- It should be possible to exchange information with ISPs and spam filter companies in specific cases
- ISP self-regulation in the shape of a ‘Code of Conduct’
- Business and trade should put greater emphasis on ethics, dialogue and responsibility
The speech is available in Danish at www.forbrug.dk.