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EU sets online marketing rules

InfoWorld

By Paul Meller

(IDG) -- The Council of Ministers of the European Union (EU) agreed Thursday to pass a new law banning the use of unsolicited e-mail and so-called inertia marketing for the promotion of financial services.

The Distance Selling of Financial Services directive covers the marketing of financial products including credit cards and pension plans to consumers on the Internet, by phone and fax and by traditional direct mail.

Ministers of the 15 EU member-states agreed to ban inertia selling, which involves sending unsolicited financial products or services to a consumer and charging them for these before the consumer has agreed to buy them. The ministers also agreed to introduce an opt-in rule that would prohibit companies from using unsolicited e-mail to sell their wares. At present an opt-out rule applies, which allows companies to assume that a consumer wants to receive its direct marketing literature unless they specify otherwise.

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"This is a major breakthrough that will provide consumers with much needed protection and rights," Health and Consumer Protection Commissioner David Byrne said of the agreement.

"Distance marketing is currently dominated by classic techniques such as mail and telephone, but the directive is also a key step in creating a regulatory framework to build consumer confidence in electronic commerce, inside a consumer's member state or across borders."

Frits Bolkestein, commissioner for the internal market, was equally enthusiastic.

"The adoption of harmonized rules across the EU will make it easier for both consumers and suppliers to cross national boundaries in an environment of greater legal security and confidence. That is especially true for Internet trade, for which financial services are especially well-suited," Bolkestein said.

"This directive is an essential complement to the e-commerce directive which was adopted last year and which will enter into force this coming January," he said.

The European Commission (EC) was the author of this new directive. Before becoming law, the directive must be approved by the European Parliament in a second reading expected before the end of the year.

A directive regulating the distance selling of all other goods and services was adopted in 1997 and entered into force last year. Financial services were excluded from its scope since these were considered to require a separate set of rules.

A law on unsolicited e-mail covering all other industries is expected early next year. The question of whether to apply opt-in or opt-out to e-mail marketing is provoking hot debate; the Commission favors opt-in, but many members of the European Parliament prefer the more industry-friendly opt-out approach. The spamming question is included in the proposed Data Protection in Telecommunications directive.




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