Inbox advertising and the need for prior user consent
Published on 24th Jan 2022
The Court of Justice of the European Union has ruled that the insertion of advertising messages in users' inboxes in a form similar to that of e-mails constitutes a direct marketing practice which requires the prior consent of users under European Union law.
The digital marketing sector is moving towards new simple and economically attractive ways of positioning advertising that differ from the commonly known ways such as banners or pop-ups. One of these new advertising practices is what is known as inbox advertising, which, as its name suggests, consists of placing advertisements in the inbox of e-mail service users and is characterized by the fact that both the users and the advertising messages are chosen at random and the appearance of the advertising message is similar to that of ordinary e-mails.
It is precisely the randomness in the selection of the recipients of the advertisement and the similarity in appearance to an ordinary e-mail message that may lead us to question the legality of this form of advertising.
The Court of Justice of the European Union ("CJEU") judgment that analyses the legality of the practice of inbox advertising arises from a dispute between two competing consumer electricity supply companies. One of these electricity suppliers contracted an advertising agency to insert advertisements in the e-mail inboxes of users of the T-Online e-mail service, which is financed by advertising. The advertisements in question were visually indistinguishable from other email messages in users' inboxes, except for the fact that the date was replaced by the word "advertisement", no sender was mentioned and the text appeared against a grey background. Its competitor considered that the advertising practice described constituted an unacceptable and misleading nuisance to users and brought an action for an injunction before the German courts, which upheld it as a practice contrary to unfair competition law. Following appeals by both parties, the German Supreme Court finally decided, on cassation, to refer several questions to the CJEU for a preliminary ruling on the interpretation of various provisions relating to the Directive on privacy and electronic communications (Directive 2002/58/EC) and the Directive on unfair commercial practices (Directive 2005/29/EC). In particular, the CJEU was asked to rule on the criteria governing the concepts of "electronic mail", "use of electronic mail for the purposes of direct marketing" and "persistent and unwanted solicitations by email" in the light of the wording of the aforementioned directives.
First, the CJEU considers that this type of advertising presented in users' inboxes is sent by means of electronic mail within the meaning of the Directive on privacy and electronic communications. The Court justifies this reasoning by the fact that these advertising communications are provided to the user through a space generally reserved for private emails which obliges users to check the content of the advertising communication and to delete it in order to have an overview of their emails, thus creating a risk of confusion because of the similarity in appearance between private emails and advertising messages with the consequent effect that users unintentionally click on advertising messages believing that they are ordinary emails.
On the other hand, there is no doubt as to the direct marketing purpose of these emails promoting services and that conclusion cannot be called into question by the mere fact that the recipients of such emails are chosen at random and their recipients are not predetermined. In fact, it is the random and massive choice of the recipients of these advertising messages which calls into question whether, for practical purposes, the requirement to obtain the user's prior consent to the sending of this type of message can be complied with, bearing in mind that such consent must satisfy the requirements of being free, specific, informed and unambiguous.
With regard to analyzing the validity of the consent, the CJEU does not resolve this question, and it is for the referring court to determine whether the user concerned, having chosen to take advantage of the free version of the T-Online e-mail service, was duly informed of the means of distribution of that advertising and whether he did in fact consent to receive those advertising messages.
It should also be pointed out that the determination of whether the email is used for direct marketing purposes does not depend for the CJEU on the level of nuisance that such advertising content may cause to the recipient of the message, although it is precisely that nuisance or burden on the recipient that requires the prior consent of the users.
Finally, the CJEU concludes that the practice of inbox advertising qualifies as an aggressive commercial practice under the Directive on unfair commercial practices in so far as it is considered to be a persistent and unwanted solicitation. It must be concluded that the insertion of advertising in the inbox of a private, password-protected e-mail service where users expect to receive only messages addressed to them individually is a solicitation (within the meaning of the Directive) of a professional by email. However, it shall be analyzed whether such solicitation is of a persistent nature, which requires an analysis of the frequency of the advertising messages over a limited period of time (for example, three messages in less than one and a half months), and whether it is of an unwanted nature (i.e. whether the user has not consented to such advertising in advance).
The reasoning of the CJEU in this judgment is of particular interest to the digital marketing sector as it shows once again that technological developments are not exempt from compliance with EU law, particularly when they involve an intrusion into users' privacy.
