On 25 November 2021 (Case C-102/20), the European Court of Justice (ECJ) ruled that displaying advertisements directly in the e-mail inbox, so-called inbox advertising (“Inbox Werbung“), is only permissible with the recipient’s prior consent. The ECJ’s reasoning can also apply to the legal situation in Switzerland on the basis of the provisions of the Federal Act against Unfair Competition (UCA).
- What is inbox advertising?
- What did the ECJ decide?
- How should inbox advertising be assessed from a Swiss perspective?
- What should companies bear in mind when placing inbox advertisements?
- What do email providers have to consider?
What is inbox advertising?
Inbox advertising is the displaying of advertisements in users’ private email inboxes. Such advertisements appear directly where incoming emails are displayed in list form. In its decision, the ECJ assessed inbox advertisements that differ from other emails only on the following four points: the advertisement is marked as an “advertisement”, no sender is indicated, and the text is greyed out. If users click on such a “message” in their inbox, they are redirected to the advertiser’s page, similar to a banner advertisement on a website.
What did the ECJ decide?
According to the ECJ’s decision, this sort of inbox advertising is categorized as “electronic mail” according to Art. 2 lit. h. of the Privacy and Electronic Communications Directive 2002/58/EC (“ePrivacy Directive“). The ECJ justified this, among other things, by stating that advertising messages of this sort could be compared to spam, as they obstruct access to the user’s private emails. Due to the similarity between inbox advertisements and “real” emails, the ECJ also held that there was a risk of confusion with private emails, which could lead to users being redirected to the internet page of the advertiser in question against their will when they click on the advertising message.
The ECJ further held that the placement of inbox advertisements pursues a commercial objective and that the advertising messages are addressed directly and individually to consumers. The fact that the recipient of the advertising message is selected at random is irrelevant in this context.
According to Article 13(1) of the ePrivacy Directive, the use of electronic mail for direct marketing purposes is only permissible if the recipient has given prior consent. The ECJ states that this consent requirement also applies if the email service is free of charge, i.e., if it is financed by advertising. The user must be clearly and precisely informed of the modalities of the distribution of the inbox advertisement, namely in the list of private emails received, and must express consent to receive such advertising messages for the specific case in full knowledge of the facts.
Finally, the ECJ emphasizes that inbox advertising falls under the definition of “persistent and unwanted solicitation” of users of email services within the meaning of the Unfair Commercial Practices Directive (Directive 2005/29/EC)f, (i) the insertion occurs without the user’s prior consent and, (ii) it is so frequent and regular that it can be classified as “persistent solicitation”.
How should inbox advertising be assessed from a Swiss perspective?
In the case of inbox advertising, as assessed by the ECJ, the advertisement is sent automatically via code that is integrated into the website of the email service. Thus, there is no direct connection with content requested by the user; rather, the user is exposed to the advertisement without having taken any action. It is enough for the user to have chosen the means of communication, namely an email address with a corresponding inbox. Such inbox advertising can therefore easily qualify as “mass advertising” within the meaning of Art. 3 para. 1 lit. o UCA.
The inbox advertisement is placed by the email provider as an advertising message in the subscriber’s inbox in such a way that it looks like a real email. This way, the user could mistake it for a normal email, which may trigger an action on the part of the user. It is precisely this reaction resulting in a burden for the user that Art. 3 lit. o UCA, the so-called “anti-spam article”, seeks to prevent among involuntary recipients of mass advertising.
The UCA declares not only the “sending” of mass advertising but also the “inducement of the sending” as unfair. This means that the benefactors or clients of the corresponding mass advertising, i.e., the companies whose advertisements are displayed in the user’s inbox, are held liable.
In order to display relevant advertising, it must be assumed that the email provider has determined the user’s interests and preferences via web tracking services, particularly cookies. The use of such services must be examined from a data protection perspective.
What should companies bear in mind when placing inbox advertisements?
In the case of inbox advertising, it must typically be assumed that the advertising customer (i.e., the party who initiates the display of the advertisement via the provider) neither knows which subscribers will be shown their advertisement in the specific case, nor that they could influence the selection of the advertisement displayed beyond rough categorizations such as age, gender, and certain interests.
It is less the Federal Act on Data Protection (FADP) that appears as relevant to the conduct of the advertising customer in connection with the placement of inbox advertisements than the UCA. The advertising customer is in fact held liable via Art. 3 lit. o UCA because inducing mass advertising also falls within the scope of this provision and can thus be considered unfair. However, such inducement is not unfair and thus permissible, provided that:
- The user’s consent was obtained prior to the insertion of the advertising message.
- The correct sender is indicated in each advertising message.
- A no-hassle, no-cost opt-out option is included in each advertising message.
As for the modalities of consent, the user must be adequately informed, i.e., provided with basic information on the subject matter, purpose and scope of the advertising, in such a way that they can assess the consequences of the consent. The UCA does not contain any formal requirements for obtaining consent. However, in Switzerland, it is good practice to document the consent obtained. That is why senders of traditional advertising emails usually obtain written or electronic consent. The advertising customer must ensure that the email provider has obtained the necessary consent and is able to prove this if required.
What do email providers have to consider?
Like the advertising customer, the email provider who sends out mass advertising in the form of inbox advertising to the user must ensure, pursuant to Art. 3 lit. o UCA, that: (i) the user’s consent has been obtained before the advertising message is displayed; (ii) the correct sender is stated in the advertising message; and (iii) a no-hassle, no-cost opt-out option is included in each advertising message. If consent to advertising, including inbox advertising, is a condition of using a free email service, the email provider could make revocation of consent or refusal to receive inbox advertising conditional on the user upgrading to a paid version or closing the free account.
To be able to display individually tailored advertising, email providers typically allow advertising providers to set cookies and further link to the user and/or enrich the user’s profile based on already set tracking cookies observing the user’s surfing behavior. The following apply under Swiss law with regard to the placement of such cookies:
- The users concerned must have transparency about the acquisition of personal data, the purpose of the processing and the data analysis (Art. 4 FADP; cf. Art. 7 and 19 of the revised FADP).
- Furthermore, according to Art. 45c of the Telecommunications Act, the right to refuse the processing of personal data must be clearly pointed out.