Statement of the Feasible Options (Regulatory and Non Regulatory) that May Constitute Viable Means for Achieving the Desired Objectives
6. Details of the options for enforcement of the legislation and the enforcement agency will be presented in a separate Cabinet Paper.
Status Quo
7. The current regime includes existing legislation, self-regulation, industry and user education and technical measures.
Existing Legislative Framework
8. The existing legislative framework for addressing issues associated with spam in New Zealand comprises the following:
- Computer network security and integrity - Section 250 of the Crimes Act 1961 provides that it is an offence to intentionally or recklessly damage or interfere with any data or software in a computer system or cause any computer system to fail or deny service to authorised users. This provision deals with the concern that some spam is used to transport computer viruses or to launch denial of service attacks on computer systems;
- Misleading and deceptive messages - Misleading and deceptive conduct and false or misleading representations by persons in trade are addressed by sections 9 and 13 of the Fair Trading Act 1986. These provisions can be used to deal with emails sent by businesses which are misleading in nature or make false or misleading claims in relation to a good or service;
- Forgery/Fraud - Sections 256 and 257 of the Crimes Act 1961 provide that it is an offence to make or use a false document with the intention of using it to obtain any benefit or advantage. This provision would apply to email scams which involve false email documents sent to elicit money out of the recipient on the basis of a false promise;
- Privacy - The Privacy Act 1993 provides rules against the collection, transfer and use of electronic address information pertaining to an individual without their consent or knowledge unless the information is already publicly available. It would be a breach of the Privacy Act for a business to collect a customer's email address without their knowledge or to sell a list of customers' email addresses without authorisation;
- Pornographic/offensive material - Section 123 of the Films, Videos, and Publications Classification Act 1993 provides that it is an offence to make or supply an objectionable publication, including objectionable material by way of email;
- Harassment - The Harassment Act 1997 provides that where a person is sending emails as a pattern of behaviour designed to harass another person then action can be taken against the sender.
Self Regulation, Industry and User Education, and Technical Measures
- Self regulation - In New Zealand the Direct Marketing Association (DMA) has developed a set of standards for email marketing by its members to promote consumer confidence in eCommerce and ensure that proper account is taken of consumers' right to privacy. ISPs in New Zealand will generally not tolerate spammers operating from their networks and will have them removed.
- Industry and user education - The Internet Society of New Zealand (InternetNZ) is active in the area of industry and user education and awareness, and has set up a website for helping to deal with spam.
- Technical measures - An ISP can use a spam filter at its server which means that users will not see spam that is filtered out.
On its own the status quo cannot achieve the public policy objectives.
Multi-Pronged Approach Including Specific Anti-Spam Legislation - Preferred Option
9. This option also includes the measures outlined under the "Status Quo" option. It is proposed that a new Act will be developed. Within legislation to combat spam, there are several key issues, each of which may have various options. The key features of the preferred option are:
- The legislation would prohibit the sending of unsolicited "commercial" electronic messages sent for marketing or promotional purposes, where:
- "unsolicited" means that the recipient has not expressly or implicitly consented to such transmission (opt-in). Implicit or inferred consent is defined as being consent that can reasonably be inferred from the conduct and the business and other relationships of the individual or organisation concerned, for example, the act of handing over a business card or a bank-customer relationship.
- "commercial marketing and promotional" means for the purpose of marketing or promoting goods, services, land or an interest in land, a business or investment opportunity, or for the purpose of assisting or enabling a person, by a deception, to dishonestly obtain a financial advantage or a gain from another person.
- "electronic" effectively means in the form of email, instant messaging and text messaging, as facsimile messages and voice calls are excluded.
- The legislation would prohibit the sending of non-commercial electronic marketing messages where:
- "non-commercial" means the primary purpose is to promote an organisation's aims or ideals (for example, a political, religious or charitable organisation seeking support for their cause), and
- the recipient has previously specifically opted out from receiving such messages from the sender.
- A number of matters, such as quotes, estimates, providing warranty or product recall information, will be excluded from the prohibitions and requirements in the legislation.
- The legislation would also regulate the sending of all electronic marketing or promotional messages. Messages would be required to have:
- accurate sender information, and
- a functional unsubscribe facility (which means that there is a working, clearly visible means of opting out of future mailings).
- The legislation would apply to all messages generated within New Zealand and all messages to a New Zealand email address whether generated in New Zealand or overseas.
- All parties knowingly involved in the act of spamming, including the vendor sponsoring the spamming would be committing an offence under the Act.
- Express statutory exemptions would be put in place for telecommunications network operators and ISPs where messages are transmitted over their networks in contravention of the legislation without their knowledge, and in relation to unsolicited messages being sent by mistake or unknowingly by the address holder's computer such as where a computer has been infected by a virus.
- The legislation would prohibit the supply, acquisition, and use of address-harvesting software and harvested-address lists in connection with the unlawful sending of marketing or promotional electronic messages.
- The number of messages sent will be a relevant factor in determining what penalties would apply but it will not form part of the definition of spam.
- There will be a four month transition period.
Other Options
10. The following aspects for the proposal were considered and not preferred or discarded:
- To include faxes and telemarketing as they are also used for the sending of unsolicited marketing and promotional messages. However, there does not currently appear to be a sufficient problem in this area to warrant regulation, and moreover the costs of sending messages via these mediums are largely borne by the sender rather than the recipient or ISP.
- To adopt the sending of a minimum quantity of messages in the definition of spam. For example, in United States legislation, spam is defined as multiple commercial electronic messages, where multiple means more than 100 electronic messages during a 24-hour period. The critical factor, however, with spam is its unsolicited nature rather than its quantity, and it would be easy for spammers to circumvent minimum number restrictions through minor distinctions between messages sent to different addressees.
- To have the legislation apply to all unsolicited electronic messages or all unsolicited "commercial" (as defined under Australian legislation) electronic messages. Extending coverage of anti-spam legislation to all types of unsolicited messages raises difficulties in terms of rights of freedom of speech and creates legality problems for the use of email as a general form of communication. In addition, regulating all "commercial" electronic messages as it is defined under the Australian legislation imposes widespread compliance costs as it requires small businesses to ensure that communications with existing and potential customers, including quotes and invoices, meet minimum requirements.
- To adopt an opt-out approach to consent for commercial messages. Under an opt-out regime, messages can be transmitted until the sender receives an indication from the recipient that they no longer want to receive such messages. The strongest arguments for the opt-out approach are that it would avoid uncertainty around what may or may not amount to consent, and that the opt-in approach places much of the compliance burden on legitimate businesses which have nothing at all to do with spam problem. However, this approach for commercial messages is not supported because:
- It places the onus of addressing the issue of consent on the recipient of the message.
- As long as unsolicited commercial emails meet all other requirements, the opt-out approach gives spammers at least one free hit at mailboxes for a particular product, in effect legitimising spam.
- It is seen as legitimising the sharing of email address lists by businesses with one another.
- To have criminal penalties instead of civil penalties. However, unsolicited marketing messages do not cause sufficient harm or damage to warrant criminal sanction, and a criminal penalty would require proof beyond reasonable doubt (which may be difficult to establish), whereas a civil penalty would only require proof on the balance of probabilities.
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