Direct advertising by e-mail has only been permitted under strict conditions since the entry into force of the General Data Protection Regulation. The legal simplification of e-mail advertising for existing customers is, therefore, gaining in importance. According to a recent ruling by the Court of Appeals (Oberlandesgericht) of Munich, this exception is now also applicable to free, so-called "freemium" offers.
The claimant, a consumer association, sued a leading partnership exchange, which sent its users an e-mail with the offer of paid membership after the free registration without first obtaining their express consent by means of the so-called "double opt-in" procedure. At the defendant's partner exchange, it was possible to register free of charge after providing gender, date of birth, city, a pseudonym, a password and an e-mail address. Based on the free registration the user can see photos of other partners looking for other registered partners but could not contact them. The lower court held that e-mail advertising for paid membership permissible and dismissed the complaint of the consumer association.
The appeal of the consumer association was unsuccessful. The Court of Appeals considered the e-mail to be justified in accordance with Section 7 (3) of the German Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, "UWG"). According to this section in the law, e-mail advertising, as an exception, does not constitute prohibited unacceptable nuisance if (1.) a business has received the customer's email address in connection with the sale of goods or services, (2.) the business uses the address for direct advertising for the own similar goods or services, (3.) the customer has not objected to the use and (4.) the customer is clearly informed when the address is obtained and each time the address is used that the customer can object to the use at any time without incurring any costs other than the transmission costs according to the basic rates.
In the present case, the Court of Appeal held that the partner exchange had received the user's e-mail address "in connection with the sale of a service" because the user who registered free of charge had, in any event, been given the opportunity to view the pictures of the other members in return for disclosing the customer's data.
The Court of Appeals held that the second element of using the address for direct advertising for "own similar services" was satisfied because the free registration had the same purpose as the paid membership, namely, finding a partner on the partner exchange.
The last two aspects for the exception under Section 7 (3) UWG were also found to be satisfied because the customer was clearly informed, when the address was collected and each time it was used, that the customer could object to the use at any time and that no costs other than the basic rates for transmission would be incurred. The reference in the e-mails: "To no longer receive this e-mail, click here" with a corresponding unsubscribe link was found to be easily understandable and sufficient.
The decision of the Court of Appeals in Munich should not be underestimated in its effects on the practice of direct advertising. Even if the possibilities for existing customer advertising are limited and linked to certain formal requirements, they still represent an effective option for the advertising industry for permissible direct advertising, for example in connection with customer satisfaction surveys.
The exception for existing customer advertising is also contained in the current proposal for the so-called ePrivacy Regulation after the entry into force of the General Data Protection Regulation. It can be assumed that this possibility of e-mail advertising will continue to exist without the requirement for prior express consent of the addressee even under the strict data protection regime.
(OLG Munich, judgment of 15.2.2018, Ref. 29 U 2799/17)
Dr Christian Triebe, Attorney at Law, Specialist Attorney for Intellectual Property, Specialist Attorney for Copyright and Media Law