December 6, 2021
StWL Städtische Werke Lauf ad Pegnitz GmbH (StWL) and eprimo GmbH are both electricity suppliers. eprimo instructed an advertising agency to distribute advertisements in the form of messages displaying banners in the email inboxes of users of the German T-Online free email service.
The advertisements appeared as soon as randomly chosen users of the email service opened their inbox, and the messages displayed were also chosen at random (so-called “inbox advertising”). The messages were not visually distinguishable in the list from other emails in the user’s inbox except for the fact that the date was replaced by the word “Anzeige” (advertisement). No sender was named, and the text appeared against a grey background. The “subject” section of the email contained text intended to promote competitive prices for electricity and gas services.
StWL issued proceedings against eprimo in Germany in relation to these activities, claiming that using the recipient’s inbox without their express prior consent was contrary to the rules of unfair competition. The German court upheld StWL’s claim and ordered that eprimo cease disseminating such advertising to consumers on the grounds that it constituted an unacceptable nuisance and was misleading.
eprimo appealed and the German appeal court found that inbox advertising was not an unlawful commercial practice under competition law.
StWL appealed to the Federal Court of Justice in Germany, which asked the CJEU whether the practice of displaying advertising messages in the inbox of a user of a free-of-charge email service funded by advertising is compatible with the E-Privacy Directive and the Unfair Commercial Practices Directive and, if so, in accordance with what conditions.
The CJEU said that the E-Privacy Directive seeks to protect subscribers against intrusion into their privacy by unsolicited communications for the purpose of direct marketing, in particular by means of automated calling machines, telefaxes, and emails, including SMS messages. That objective must be ensured regardless of the technologies used, meaning that the Directive must be interpreted broadly to take account of evolving technologies, it said.
The CJEU found that the distribution method used by eprimo’s ad agency, i.e., straight into people’s email inboxes, amounted to use of electronic mail likely to breach the objective of protecting users from any intrusion into their private life by unsolicited communications for the purposes of direct marketing.
Further, the nature of the advertising messages in question, which promoted services, and the fact that they were distributed in the form of an email meant that they were “communications for the purposes of direct marketing”. The fact that the recipient was chosen at random was irrelevant; what mattered was that there was a communication for a commercial purpose, which reached, directly and individually, one or more email service users.
The CJEU noted that the use of email for the purposes of direct marketing is allowed on condition that its recipient has given prior consent. Such consent must be specific, informed and freely given. The T- Online email service was offered to users in two forms: (i) a free service funded by advertising; and (ii) a paid-for service, without advertising. The CJEU said that it was for the national court to determine whether the user of the free T-Online email service had been duly informed of the means of distribution of the advertising and had consented to receiving it.
The CJEU also observed that the display of advertising messages in a user’s private email inbox impeded access to private emails in a similar way to that of unsolicited emails (i.e., “spam”). The E-Privacy Directive does not require the burden on the user to be any greater than a nuisance, but in the CJEU’s view, the display of advertising messages in a user’s private email inbox was, in fact, a burden on the user.
Finally, the CJEU said that inbox advertising of this type falls within the concept of “persistent and unwanted solicitations” under the Unfair Commercial Practices Directive if the display is sufficiently frequent and regular to be classified as “persistent” and counts as “unwanted” in the absence of user consent. (Case C-102/20 StWL Städtische Werke Lauf ad Pegnitz GmbH v eprimo GmbH EU:C:2021:954 (25 November 2021) — to read the judgment in full (in French), click here. To read the CJEU’s press release (in English), click here).