The new statutory Direct Marketing Code of Practice will hand increased power to the online giants, create more consumer confusion, and kill off the third-party data market, sending the marketing industry back two decades, according to a damning analysis by the DMA.
The code, first drawn up by the Information Commissioner’s Office in November 2018, was put out for its final consultation last month following submissions from the 65 organisations – including trade bodies, academia and law firms – who contributed to the initial proposals.
The regulator has previously produced direct marketing guidance but the new code, which is a requirement under the UK Data Protection Act 2018, is designed to explain the law and provide good practice recommendations.
Serious breaches of the code could lead to legal action, while the good practice standards will also be admissible as evidence in court or tribunal proceedings and carry far more clout than those in the current guidance.
But while the DMA says the draft code “is a good document” and useful for marketers and compliance professionals at all levels, the industry body insists “there are challenges that can’t be ignored”.
In a blogpost, DMA director of policy and compliance John Mitchison highlights six major areas of concern. These include new rules around the indirect collection of data, consent, data broking, social media, the presentation of new or undefined terms and good practice recommendations.
One of the key issues is a major clampdown on consent. The code states: “If you collect personal data indirectly – ie. from sources other than the individual – you must still be transparent and comply with the right to be informed. Other sources could include publicly available data or third-party suppliers such as data brokers. Here you must provide privacy information to individuals within a reasonable period and at the latest within a month of obtaining their data.”
Mitchison explains that if larger data brokers and data services companies, who combine data and who are unknown to the consumer have to contact each individual as described in this section, it could be unaffordable – putting the vast majority of the third-party data market and all its associated products and services at risk.
He writes: “[It’s] bad news for data brokers and bad news for the users of their data products in both the B2C world and B2B.”
Another bone of contention with the code is the assertion: “When sending direct marketing to new customers on the basis of consent collected by a third party we recommend that you do not rely on consent that was given more than six months ago.”
Mitchison says: “We contest this guidance. What about data collected for insurance renewals, holidays, replacing cars? There are many reasons why a company might delay communication until the most relevant time for the consumer.
“We would continue to urge the ICO to provide recommendations on how to comply with the law; how to create a truly useful data protection impact assessment; and advice on what sort of due diligence they think is appropriate. Marketing industry specifics should be left to the marketing industry.”
Mitchison concludes that new code anti-competitive. He says: “The bigger your organisation, the less concerned you need to be about the code. As the rules tighten up on marketing practices relied on by SMEs more business will be driven to the online giants.”
He adds that it will also lead to poor consumer experiences: “More tick boxes, more privacy information, more confusion for consumers.”
Finally, he claims it will send marketing back 20 years: “No more third-party data. Profiling and audience selection made more difficult. Increased costs and lower ROI for marketers.”
The DMA is calling on members to tell the organisation how the changes will affect their own business by February 14 or respond directly to the ICO before the consultation ends on March 4.
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