AUSTRALIAN E-MARKETING CODE OF PRACTICE - DEVELOPED BY THIS ACA ENDORSED COMMITTEE Date: December 2004 A SETTING THE PARAMETERS FOR THE CODE INDEX A: Explanatory Statement B: Background C: How the Code builds on the current Regulatory Arrangements D: Application of the Code of Practice E: Code Enforcement F: Code Objectives G: How will those Objectives be achieved ? H: Code Benefits I: Code Status J: Participants in Developing CodeRUBAC Electronic Information Management Methodology - Copyright of Hamme Family Trust A: EXPLANATORY STATEMENT This is the Explanatory Statement for the Australian eMarketing Code of Practice (the Code). This explanatory statement explains the purpose of the Code and describes the context in which it has been developed. B: BACKGROUND The Australian Government has acted to combat the increasing problem of spam by passing the Spam Act 2003. The Act came into effect on 10 April 2004 and prohibits the sending of unsolicited commercial electronic messages with an Australian link. Electronic messages are defined by the Act to include messages sent by e-mail, instant messaging and Short Message Service (SMS) and Multimedia Message Service (MMS). The Act requires that all commercial electronic messages are sent with the express or inferred consent of the recipient, and that they include accurate information about who authorised the sending of the message and a functional unsubscribe facility. The Act also prohibits the supply, acquisition or use of address-harvesting software for the purpose of sending unsolicited commercial electronic messages. The obligations outlined in the Spam Act 2003 are general in nature and apply to all organisations and individuals without distinction. As a result, the Act does not provide specific guidance to participants in the eMarketing industry involved in email or mobile marketing, on how current industry practice should be amended to ensure compliance with the Act. Therefore the eMarketing Code of Practice has been developed to establish comprehensive industry rules and guidelines for the sending of commercial electronic messages with an Australian link in compliance with the Spam Act 2003. The Code has been developed under Section 112(1A) of the Telecommunications Act 1997. This provision recognises the intention of the Commonwealth Parliament that industry bodies or associations representing sections of the eMarketing industry should develop industry codes of practice that apply to the industry sector in relation to the e-marketing activities of the participants. The Act requires that the industry bodies or associations developing the Code must be representative of the eMarketing industry to the satisfaction of the Australian Communications Authority (ACA). A Committee comprising representatives from peak industry associations, consumer groups, message service providers, government regulatory agencies and corporate business (a full list of participants is listed at page 10), developed the Code. The Committee was chaired by the Chief Executive Officer of the Australian Direct Marketing Association and was representative of the eMarketing industry from both a business and consumer perspective. The eMarketing industry is defined in section 7 of the Telecommunications Act 1997 as 'an industry that involves carrying on an e-marketing activity'. C: HOW THE CODE BUILDS ON THE CURRENT REGULATORY ARRANGEMENTS The Code establishes industry-wide rules and guidelines for the sending of commercial electronic messages in accordance with the Spam Act 2003. The Code rules and guidelines provide practical and specific guidance in relation to the sending of messages in the context of current eMarketing practices. The Code also provides a framework by which industry can handle complaints about spam and monitor industry compliance with the Code provisions. The Code provides detail on the following key areas relating to the sending of commercial electronic messages in an email and mobile marketing environment in Australia: a Obtaining and maintaining consent; b Keeping records of consent; c Obligations in relation to viral marketing campaigns; d Inclusion of accurate information about senders/message authorisers ; e Provision and operation of a functional unsubscribe facility; f Sending commercial electronic messages about age sensitive material; and g Complaints handling. The Code also delivers a higher standard of practice than required by the Spam Act 2003. D: APPLICATION OF THE CODE OF PRACTICE The Code automatically applies to all persons, including individuals and organisations, undertaking an e-marketing activity. An 'e-marketing activity' is defined at section 109A of the Telecommunications Act 1997, which states: (1) For the purposes of this Part, an e-marketing activity is an activity to which subsection (2) or (3) applies. (2) This subsection applies to an activity that: (a) is carried on by a person (the first person) under a contract or arrangement (other than a contract of employment); and (b) consists of: (i) using commercial electronic messages to market, advertise or promote goods or services, where the first person is not the supplier or prospective supplier of the goods or services; or (ii) using commercial electronic messages to advertise or promote a supplier or prospective supplier of goods or services, where the first person is not the supplier or prospective supplier of the goods or services; or (iii) using commercial electronic messages to market, advertise or promote land or interests in land, where the first person is not the supplier or prospective supplier of the land or interests in land; or (iv) using commercial electronic messages to advertise or promote a supplier or prospective supplier of land or interests in land, where the first person is not the supplier or prospective supplier of the land or interests in land; or (v) using commercial electronic messages to market, advertise or promote business opportunities or investment opportunities, where the first person is not the provider or prospective provider of the business opportunities or investment opportunities; or (vi) using commercial electronic messages to advertise or promote a provider, or prospective provider, of business opportunities or investment opportunities, where the first person is not the provider or prospective provider of the business opportunities or investment opportunities. (3) This subsection applies to an activity carried on by a person if: (a) the activity consists of using commercial electronic messages to market, advertise or promote goods or services; and (b) the person is the supplier or prospective supplier of the goods or services; and (c) the activity is the sole or principal means of marketing, advertising or promoting the goods or services. (4) An expression used in this section and in section 6 of the Spam Act 2003 has the same meaning in this section as it has in that section. In summary, the Code automatically applies to the following activities (whether an eMarketing industry member is a signatory or not) and to the extent to which entities engage in these activities, they are bound by the provisions of this Code in respect to these activities: 1 Activities undertaken by individuals or organisations to market, promote or advertise their own goods and services where sending or causing to send commercial electronic communications is their sole or principal means of marketing, promoting or advertising their own goods or services. 2 Activities undertaken by individuals or organisations who by contract or other arrangement with a person market, advertise or promote the goods or services (including land and interests in land and business and investment opportunities) of that person by sending commercial electronic communications or causing them to be sent. 3 Activities undertaken by individuals or organisations who by contract or other arrangement with a person market, advertise or promote that person as a supplier, prospective supplier, provider or prospective provider of goods or services (including land and interests in land and business and investment opportunities) by sending commercial electronic communications or causing them to be sent. Note that the definition of 'use' of commercial electronic messages includes sending commercial electronic messages or causing them to be sent, for example by engaging a third party to send. To clarify, this does not include merely supplying the underlying carriage service or web-based facility for the storage, transmission or delivery of a message where the persons supplying the carriage service or web-based facility have no control over the content of any messages stored. The Code does not apply to the actions of individuals or organisations involved in the sending of commercial electronic messages who are not engaged in eMarketing activities as described above. However, such entities remain subject to the Spam Act 2003 and may choose to use the Code provisions as a best practice approach to compliance. E: CODE ENFORCEMENT The Telecommunications Act 1997 provides the ACA with powers to investigate complaints, issue warnings to comply and direct compliance with registered codes of practice (whether the industry member is a signatory to the Code or not). A failure to comply with a direction issued by the ACA can result in court action and the imposition of pecuniary penalties. Part 6 of the Act allows for the development of self-regulatory industry codes which amongst other benefits, provide an opportunity for industry to actively manage complaints and monitor its own compliance with codes. In enforcing the provisions of this Code, the Code employs the greatest practicable use of industry self-regulation whilst acknowledging the ACA's powers as an important backup. The Code provides for industry to actively resolve and monitor complaints where appropriate. Where complaints are not satisfactorily resolved or breaches of the Code arise the ACA may pursue enforcement action. F: CODE OBJECTIVES The objectives of the Code are to: 1 reduce the incidence of unsolicited commercial electronic messages received by consumers; 2 provide a plain English application of the provisions of the Spam Act 2003 to current eMarketing practices; and 3 promote best practice use of commercial electronic messaging in compliance with the Spam Act 2003. G: HOW WILL THOSE OBJECTIVES BE ACHIEVED ? The objectives of the Code will be achieved by: 1 the establishment of clear, unambiguous rules and guidelines for the sending of commercial electronic messages; 2 the application of these rules and guidelines to current marketing practices by members of the eMarketing industry; and 3 enforcement by the ACA when necessary. Data on complaints (collected by industry and the ACA) can be used by the Code administration body and the ACA as an indicator of industry's compliance with the Code. H: CODE BENEFITS Anticipated benefits to consumers The anticipated benefits to consumers from industry compliance with the Code include: 1 An expectation of appropriate industry behaviour in relation to the sending of commercial electronic messages and the gaining of consent; 2 A reduction in the incidence of unsolicited commercial messages sent by members of the Australian eMarketing industry; 3 A clear understanding of the eMarketing industry's processes and benchmarks in respect of commercial electronic messages; 4 A clear and comprehensive identification of the senders and/or authorisers of commercial electronic messages; 5 Clear and transparent means of unsubscribing to and withdrawing consent to receive future messages; 6 An efficient and fair method of having complaints handled by the eMarketing industry. Anticipated benefits to industry Compliance with the Code should result in the reduction of complaints made to members of the eMarketing industry. The existence of the Code will give the public greater confidence of the eMarketing industry's compliance with the Spam Act 2003 and its ability to self-regulate on this issue. Compliance with the Code will provide industry with confidence in its own compliance with the Spam Act 2003. Anticipated costs to industry It is anticipated that industry participants will incur some initial and ongoing costs in relation to complying with the Code. It should be noted that industry will already have incurred some costs in altering practices to comply with the Spam Act 2003. As the Code is likely to result in improved relationships with customers, it is likely to result in better outcomes for industry in the long run. Other public interest benefits or considerations Although the Code is applicable to and may only be enforced in relation to defined eMarketing activities there is scope for its principles, rules and guidelines to be adopted by all senders of commercial electronic messages to assist in compliance with the Spam Act 2003, resulting in a wider adoption of better practices. I: CODE STATUS It is intended that this Code be submitted to the ACA for registration. J: PARTICIPANTS IN DEVELOPING CODE Representative Organisation Robert Edwards (Chair) Australian Direct Marketing Association Jodie Sangster Australian Direct Marketing Association Chad Gates Australian Retailers' Association Charles Britton Australian Consumers' Association Chris Thomas / Jenny Williams Advertising Federation of Australia Peter Coroneos Internet Industry Association Ewan Brown Small Enterprise Telecommunications Centre Gordon Cramer Actif Communications Val Smirnios Legion Interactive Adam Benson Public Relations Institute of Australia David Hinitt Aus Competition and Consumer Commission Ian Crute Qantas Anna Snidaro Australian Communications Authority (observer and secretariat services only)