AHMORE BURGER-SMIDT AND DALE ADAMS: Jury out on telephone calls after ruling against marketing firm

The Information Regulator issued its first enforcement notice regarding noncompliance with the direct marketing provisions of the Protection of Personal Information Act (Popia) against FR Ram Consulting.

Of importance is what the enforcement notice practically means for the direct marketing industry. What is the extent and impact of the notice, the intended and unintended consequences? Has the record been set straight?

The enforcement notice was issued against FR Ram after a complaint from a data subject of countless direct marketing messages, particularly emails, received from FR Ram despite multiple attempts by the data subject to opt out and requests to be removed from its emailing list.

FT Ram was ordered to “immediately stop sending unsolicited direct marketing messages by means of any electronic communication, including telephone, fax, SMS, email or automated calling machine, to any data subject who has not consented, including the complainant”.

The regulator found that FT Ram ignored the opt-out requests from the data subject and thus contravened the conditions for the lawful processing of personal information and section 69 of the act. It was found that FT Ram contravened sections 69(1) — (2) of the act by transmitting to the subject — without first obtaining their consent — persistent direct marketing communications through emails, and not using the prescribed form to obtain the data subject’s written consent.

The enforcement notice comes about while various statements have been made about whether a telephone call constitutes an electronic communication. The chair of the regulator, Pansy Tlakula, recently remarked they had decided that a telephonic call is a form of electronic communication.

Telemarketing will thus come within section 69 of the act “because these telephone calls have become such an inconvenience. They annoy everyone, including me.” 

What does the act actually say? It defines electronic communications as “any text, voice, sound, or image message sent over an electronic communications network which is stored in the network or in the recipient’s terminal equipment until it is collected by the recipient”.

Not stored

By this definition alone, emails are clearly included within section 69(1)-(3) of the act as the marketing message is stored in the network or in the recipient’s terminal equipment. In fact, section 69(1) itself deliberately mentions emails as a form of electronic communication.

However, live telephone calls are not stored in the network or in the recipient’s terminal equipment except if one leaves a message. This raises the question of the extent to which telemarketing constitutes a form of direct marketing in terms of section 69 of the act.

The catch-all ground is section 69(4), which provides that, duly emphasised, “Any communication for the purpose of direct marketing must…”. Section 69(4) thereafter sets out an opt-out regime in terms of which the direct marketer must disclose its identity and contact details to which the recipient may send a request that such communications cease. The wording of section 69(4) is important — it refers to all communications and not just electronic communications.

The regulator is established pursuant to enabling legislation and equipped with the task of overseeing, monitoring and enforcing the act and its regulations. The regulator is bound by the provisions of the act and the Promotion of Access to Information Act in the exercise of its powers and functions. It is an administrative body and is also bound by the requirements for valid administrative action set down in the Promotion of Administrative Justice Act. The role of the regulator is therefore important for the proper governance of data privacy matters. The regulator must carry out its functions without fear, favour or prejudice.

Judicial review

Though the functions of the regulator and legislature complement each other, they serve different roles within the legal system. The legislature is responsible for lawmaking and policy setting. This accords with section 43(a) of the constitution, which vests the legislative authority of the national sphere of government in parliament. This confers on the National Assembly the power to consider, pass, amend or reject any legislation before the National Assembly and to initiate or prepare legislation.

Being an administrative body that is accountable to the National Assembly, all administrative actions and decisions of the Information Regulator must be executed in a lawful, reasonable and procedurally fair manner. If this is not the case, the action or decision of the administrative body is subject to judicial review in terms of the Promotion of Administrative Justice Act.

Can a regulator therefore create the law? The regulator expects litigation regarding its interpretation. Tlakula remarked that “the rules are very clear but I think with direct marketing … we’ll probably end up being in court. They will wait for the time when there is a complaint and once we decide against them, they’ll probably take us on review and the issue of whether a telephone is electronic communication or not will come to the fore.”

It has been reported that the regulator will issue a guidance note on direct marketing through unsolicited electronic communications. To this end Tlakula remarked that this “is why we needed to take a decision and it took us a long time to take that decision when we finalised the direct marketing guidance note. We took a decision … that a telephone [call] is an electronic communication.”

Can the regulator read “telephone” into the definition of electronic communications? Time will tell. 

• Burger-Smidt is head of regulatory, and Adams senior associate, at Werksmans Attorneys.