When it comes to retail marketing for shopping centres, direct marketing schemes conducted using different types of electronic communications (e.g. SMS, e-mail, telephone calls, snail mail) are so lucrative that landlords and tenants are allured by the benefits. Electronic communications is one of the most popular advertising techniques because it provides instantaneous promotion within a limited period of time. However, with the coming into effect of the Consumer Protection Act, Act Number 68 of 2008 (CPA) as well as the Protection of Personal Information Act, Act Number 4 of 2013 (POPIA), there are pitfalls to watch out for when marketing to the patrons of your shopping centre. In terms of the CPA, these patrons are considered to be “consumers”, and in terms of POPIA, patrons to shopping centres are “data subjects”.
Both the CPA and POPIA apply concurrently to direct marketing, where possible, and if concurrent application is not possible, the act which provides the best protection to consumers will apply. The assumption would be that it is in the shopping centre patron’s best interest not to be contacted by the owner of the shopping centre, for purposes of protecting the patron’s privacy, as well as the patron’s right to elect not to receive electronic communications. Based on this assumption, the position would be as follows:
Where the patron isn’t an existing customer, POPIA will apply, because it is stricter. In other words, the landlord cannot market to that patron unless the patron’s consent was obtained, but the landlord may contact the patron to get his/her consent. However, the CPA will apply to the contact aimed at obtaining the patron’s consent. That is, if the patron has already opted-out, either with the landlord directly, or with the Opt-Out Registry to be established by the National Consumer Commission (NCC) under the CPA, the landlord cannot contact that patron to obtain consent to market to them.
Where the patron is an existing customer who has not expressly consented already, POPIA and the CPA will apply, as both acts provide that the landlord can market to a patron unless that patron has opted-out (free of charge). This position will continue to apply until the Opt-Out Registry is established. Then the position of existing patrons will change slightly as the landlord will then have to assume that the patron has opted-out, until it is confirmed that this is not the case, instead of assuming that they have opted-in.
All of the above has the potential to create confusion, as the rules prescribed by POPIA and the CPA are slightly different. From a legislative drafting perspective, it would be easy to clarify the confusion and to prevent the dual application of the CPA and POPIA, by either removing the reference to “direct marketing” in POPIA, or by repealing those provisions in the CPA which deal with “direct marketing” and consumer consent. However, it is doubtful that this will happen.
In order to make sense of the confusion, the starting point for any landlord would therefore be the definition of “direct marketing”.
The definition of “direct marketing” in POPIA is the following: “Direct marketing” means to approach a data subject, either in person or by mail or [electronic communication], for the direct or indirect purpose of: (a) promoting or offering to supply, in the ordinary course of business, any goods or services to the data subject; or (b) requesting the data subject to make a donation of any kind for any reason.
POPIA therefore only refers to direct marketing “by means of any form of electronic communication”.
The definition of “direct marketing” in the CPA is the following: “Direct marketing” means to approach a person, either [in person or by mail or electronic communication], for the direct or indirect purpose of: (a) promoting or offering to supply, in the ordinary course of business, any goods or services to the person; or (b) requesting the person to make a donation of any kind for any reason.
The CPA therefore applies to all types of direct marketing (i.e. in person or by mail), including electronic communications.
The next step for the landlord wishing to market to the patrons of its shopping centres would be to look at the definition of “electronic communication”, in order to establish whether POPIA or the CPA will apply. If it is an electronic communication, both POPIA and the CPA could potentially apply. If it is not an electronic communication, only the CPA will apply.
Section 1 of the CPA defines “electronic communication” as follows: “Communication by means of electronic transmission, including by telephone, fax, SMS, wireless computer access, e-mail or any similar technology or device.”
Section 1 of POPIA defines “electronic communication” as follows: “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.”
It is clear from the above that the CPA expressly includes telephonic direct marketing, whereas POPIA doesn’t apply to telephone calls.
Section 69 of POPIA introduces what is referred to as an “opt-in” system, or in the case of existing patrons, it is what is referred to as a “soft opt-in” (i.e. the landlord can accept that the patron opted-in, because the patron chose not to accept the opportunity to opt-out). The opt-in system is watered down somewhat because the landlord can contact the patron once to get his/her consent. This means that a landlord is not allowed to conduct direct marketing unless prior consent is obtained. POPIA provides that a patron must consent before electronic direct marketing can take place, unless that patron is an existing customer who gave his/her personal information to the landlord in the context of the patron’s visits to the shopping centre, for the purpose of direct marketing, and the patron has been given a reasonable opportunity to object, free of charge and in a manner free of unnecessary formality.
However, the landlord may contact any patron only once in order to obtain consent. For purposes of POPIA, how the landlord asks for consent is very important, because it determines whether the landlord can ever contact that patron again if the patron says no the first time. If the landlord asks for very specific consent and the patron says no, the landlord may be able to ask the patron again for a different marketing campaign at a different shopping centre.
The NCC will, in terms of Section 85 of the CPA, establish an Opt-Out Registry where a patron may register a pre-emptive block against direct marketing communications, and any landlord authorising, directing or conducting any direct marketing must implement appropriate procedures to facilitate demands to stop further communications (Section 11(2)-(4) of the CPA).
Once the Opt-Out Registry is established, Regulation 4(3)(c) of the CPA Regulations provides that a patron may register:
- his or her name, identification number, passport number, telephone number, facsimile number, email address, postal address, physical address, a website uniform resource locator (URL);
- any other global address for any website or web application or site on the World Wide Web;
- any combination of the aforementioned media or addresses;
- a pre-emptive block for any time of the day, or any day of the year; or
- a comprehensive prohibition for any medium of communications, address or time whatsoever, in his or her sole discretion, as the factor which triggers the pre-emptive block, contemplated in section 11(3) of the CPA.
If the CPA applies, a landlord can conduct direct marketing until the patron opts-out. The landlord does not need the prior consent of a patron. In the case of existing patrons, the landlord must assume that there is a comprehensive block already registered by the existing patron, except where the landlord has proof that an existing patron has “expressly consented” to receive direct marketing. If the landlord has made use of an opt-in provision, it would be simple to show such proof. If the landlord cannot show express consent, the administrator of the Opt-Out Registry must confirm in writing that no pre-emptive block has been registered. All landlords will have to check their databases against the Opt-Out Registry before engaging in direct marketing.
In order to remember all of the intricacies of the overlaps between the CPA and POPIA, the following cheat sheet may come in handy:
- When POPIA does not apply, the CPA applies.
- When both POPIA and the CPA apply, the act which gives the most protection to the patron of the shopping centre applies.
- The definition of “electronic communication” is key in establishing whether POPIA or the CPA will apply.
- If it is an electronic communication, both POPIA and the CPA could potentially apply.
- If it is not an electronic communication, only the CPA will apply.
Words: Madeleine Truter is the legal advisor at Setso Property Fund