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When using newsletters in email marketing, companies need to know what works legally and what doesn’t, as Bettina Krause explains.

“A man who stops advertising to save money, is like a man who stops the clock to save time”— Henry Ford’s quote is surely drastic, but at its core it is not totally wrong. After all, any firm that wants to sell products or services has to be known by its target group, which usually does not happen on its own.

Email marketing, sending newsletters and mailings to existing or potential customers, is an effective and cheap method of advertising: it takes only one click to reach hundreds or thousands of recipients. The costs of printing and shipping flyers or placing ads in newspapers and specialist and online media are omitted. However, there are several legal aspects to take into account.

If someone receives an advertisement against his or her will, it is an “intolerable nuisance”—not just in terms of perception but also, in Germany, legally. Section 7(1) of the German Act Against Unfair Competition (UWG) reads: “A business action through which a market participant is harassed in an intolerable way is illegal. Th is particularly applies to promotion the targeted market participant visibly does not wish to receive.”

Section 7(2): “Intolerable nuisance is always to be assumed when … an advertisement is generated through the use of automated calling systems, fax machines, or electronic mail without the explicit prior permission of the recipient.”

According to the EU Directive on Privacy and Electronic Communications, the term “electronic mail” encompasses emails (spamming) alongside SMS (short message service, ie, texting) and MMS (multimedia message service).

The unsolicited delivery of an advertisement is an intolerable nuisance to a private person and an encroachment on the recipient’s general personal rights; delivery to traders is an encroachment on the rights to enterprise. According to the German law, advertising is defined as:

“The making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply ofgoods or services, including immovable property, rights and obligations.”

Consequently, you are already advertising as soon as you are presenting your business activity. Aft er all, you are hoping to catch the attention of potential new customers and, ideally, sell your products or services to them. In this case it is also irrelevant whether your promotion is labelled as such or, for example, is called a ‘newsletter’— what matters is not what’s on it but what’s in it!

Consent

You may send newsletters or other promotional emails, but the recipient must have expressly given his or her consent—an assumed consent,a ‘permission at some point’, or the simple disclosure of an email address is not sufficient. When in doubt you must be able to prove in detail when and how the recipient asked for the newsletter.

Additionally, you must comprehensively explain beforehand for what purpose and to what extent the customer’s data is collected and used. Keeping a corresponding data privacy policy available is not mandatory by law, but it is recommended to post such a statement on the company website.

The permission must always be made in writing, namely in such a way that the recipient can understand clearly what s/he is getting into. If, for example, consent to use personal data for research and promotional purposes is obtained at the same time, compliance with the usage of data for promotional purposes has to be separated and visually highlighted from the text. According to the rulings of the Federal Supreme Court (Bundesgerichtshof), you have to use the so-called ‘double opt-in’ procedure.

"Email addresses obtained from the customer in the course of selling products or services can be used without explicit consent to promote similar products."

Double opt-in means that if a user signs up for a newsletter he will first receive an email (free of advertising) that informs him that he subscribed to such a newsletter; this email is connected with a link to confirm.

Once the user activates this link he will then be added to the distribution list; otherwise, he will not receive further messages. This procedure has two advantages: you can prove that the recipient agreed to receive newsletters and the consent is automatically traced.

Exception for existing relationships

Where there are existing customer relationships the Act Against Unfair Competition allows a narrow exception according to Section 7(3): Email addresses obtained from the customer in the course of selling products or services can be used without explicit consent to promote similar products or services.

This applies provided the customer has not objected. Furthermore, the customer is explicitly informed in the advertising email that he can opt out at any time. Regardless, this reference to an optional opt-out must be included in every newsletter.

The offering of supplementary goods or services or accessories has been accepted, as long as these goods and services keep within fi nancial limits. But so-called ‘up-selling’, meaning the attempt to sell higher-value products or services for correspondingly higher prices to the established customer base, is not covered by the exception.

Anyone who does not abide by data protection laws should expect penalty charges between €50,000 and €300,000, or cease and desist letters from competitors.

Additionally, one would have to reimburse the plaintiff for lawyer’s expenses. It therefore pays to review your databases and check whether explicit consent to use the data for advertising purposes at the point of elicitation was given.

It could be problematic if you acquired data yourself but did not follow the corresponding rules, and also if you bought data with an unknown provenance. Only use existing data for email marketing when you’re sure that the recipient has given consent to receive your advertisement. In this way you can avoid unnecessary trouble.