‘Inbox Advertising’: Direct Marketing Rules Apply to Ads in Email Inboxes

Cooley LLP

Cooley LLP

On November 25, 2021, the Court of Justice of the European Union (CJEU) held in the case C-102/20 that the display of advertising messages in a form similar to an actual email among others in an inbox constitutes an electronic mail for direct marketing purposes. Hence, rules on direct marketing apply to “inbox advertising.”

The advertisement appeared as soon as users of the email services opened their inboxes, with both the users and the messages displayed being chosen at random (an advertising activity known as “inbox advertising”). The advertisement in question was not visually distinguishable in the list from other emails in a user’s inbox – except for the fact that the date was replaced by the word “advertisement,” no sender was mentioned, and the text appeared against a gray background. The “subject” section corresponding to that entry in the list contained text intended to promote the advertised services. Users of the email service had a choice of two formats: a free email service funded by advertising or a paid-for email service without advertising. Thus, only users who opted for the free version were shown the advertisement.

The CJEU found that the advertisement in question was subject to direct marketing rules because it resembled an electronic communication (i.e., email).

The CJEU also stressed that this form of advertisement is distinguishable from pop-up windows or advertisement banners that are displayed in the margins of the page, on the outer edge of private messages or separately from the list of private emails. The CJEU argued that the advertising messages in a form similar to an actual email among other emails in an inbox require the same decision-making and actions by the user (e.g., deletion from the inbox) as unsolicited emails. Therefore, these advertising messages impede the user’s privacy in the same way as unsolicited marketing emails (“spam”).

According to the CJEU, such use of emails for the purposes of direct marketing is allowed, if the recipient has given prior consent. The CJEU held that it is for the referring German court to determine whether each user concerned, having opted for the free email service, was duly informed of the precise means of distribution of such advertising and in fact consented to receiving advertising messages as required by the General Data Protection Regulation (GDPR).

Although it would have been desirable, the CJEU did not provide any guidance on whether consent to direct marketing could be linked with the provision of an email service.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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