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Cunliffe: Unsolicited Electronic Messages Bill

15 December 2005 Speech Notes

Unsolicited Electronic Messages Bill

Madam Speaker,

I move that the Unsolicited Electronic Messages Bill now be read for the first time.

I will move in due course that this Bill be considered by the Commerce Committee.

Why do we need to enact specific anti-Spam legislation?

In just a few years, unsolicited commercial e-mail - generally known as “Spam” -has gone from being a minor nuisance to becoming a significant social and economic issue. It is also a drain on the business and personal productivity of New Zealanders.

Mid-2005 data from an anti-Spam software company indicated that unsolicited bulk mail volumes accounted for approximately 65% of all email traffic on the Internet, up from just 8% of traffic in mid-2001. Many people are not aware of the true extent of the Spam problem because the majority of Spam is filtered by the Internet service providers or corporate Spam filters before it reaches the recipient.

Spam impedes the effective use of email and other communication technologies for personal and business communications. It threatens the growth and acceptance of legitimate e-commerce. Spam technology is also increasingly being used as the delivery mechanism for computer viruses, phishing attacks and identity theft.

In addition to undermining users’ confidence in communication technologies, Spam imposes costs on all Internet users. It is a nuisance to have to continually deal with unwanted emails. More importantly, however, Spam uses scarce resources of users and service providers without compensation or approval.

Spam consumes network and computing resources; email administrator and helpdesk personnel time, and reduces worker productivity.
Legislation is part of a multi-faceted approach to combat SPAM
Spam is a multi-faceted problem that requires coordinated action from government, industry, marketers and consumers working together on several fronts:

- Self-regulatory measures such as industry codes – The New Zealand Direct Marketing Association has in place a set of standards for email marketing, and a Spam code of practice is currently being developed by InternetNZ in conjunction with the Telecommunications Carriers Forum;

- Education and awareness campaigns for business and Internet users;

- Technical measures such as the use of filtering by Internet Service Providers (ISPs) and users;

- International cooperation and coordination;

- Legislative and regulatory measures.
Shortcomings of current measures

New Zealand already has in place many of these measures. However, reliance on the existing legislative framework, codes of practice, industry and user education, and technical measures has shortcomings:

- Existing laws are generally aimed at Spam content and are not specifically designed to deal with Spam as a problem in itself;

- Self-regulation through codes of practice has clear limitations. Not all individuals and businesses are members of the relevant associations and therefore not subject to the codes of practice;

- Industry and user education is likely to leave gaps in awareness and there will be some organisations and individuals who will choose not to follow best practice; and

- While technical solutions to deal with Spam can provide a significant reduction in the amount of Spam individuals receive it is, at best, an imperfect solution. In no way does it alleviate the load of Spam on the Internet “backbone” before it reaches the recipients’ ISP.

The degree of public concern and the growing cost to our economy have made it clear that it is now time for specific anti-Spam legislation.
Without specific anti-Spam legislation and a specific anti-Spam enforcement agency, New Zealand runs the risk of being seen as a safe haven for spammers. And it will lack a firm basis on which to enter into multi-lateral arrangements with other countries to address the problem of Spam originating from overseas.

What the Bill will achieve

Enactment of this Bill is part of a multi-pronged approach to address the problem of Spam, and will provide the following benefits:
The Bill will prohibit Spam and enable legal action to be taken against spammers based in New Zealand;

- It will regulate the sending of commercial electronic messages;
- It will prevent New Zealand from being seen as a safe haven for spammers; and
- It will provide a basis for New Zealand to participate in international regulatory arrangements to curb the growth of Spam.

The Bill also sets out an enforcement regime based on civil penalties and the ability to take preventative action.
Specifics of the Bill

The design of anti-Spam legislation requires the resolution of issues such as what messages are covered, who should be covered and what amounts to consent to receiving messages. The resolution of these issues requires the balancing of a number of factors such as the seriousness of the problem, compliance costs for business, and the right to freedom of expression.
What the legislation will apply to:

The legislation will apply to:

- Electronic messages, including email, text messaging and instant messaging, but not to facsimile messages and voice calls;
- “Commercial” messages, that is, they are primarily for the purpose of marketing or promoting goods, services, land or an interest in land, or 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;

- “promotional” messages, that is, they market or promote an organisation’s aims or ideals; and

- messages with a “New Zealand link”, that is messages sent within or from New Zealand, messages authorised by a person or organisation from New Zealand and messages sent to people in New Zealand from overseas.
Restrictions on the sending of electronic messages

The main issue with Spam is that it is unsolicited. To address this, the Bill requires that commercial electronic messages can only be transmitted if the recipient has opted in, that is, they have expressly or implicitly consented to such transmission. This is the regime favoured by anti-Spam groups and the majority of legislators, including Australia and the EU.

For promotional electronic messages, however, legislation will require that further such messages can only be sent if the recipient has not opted out, that is, they have not taken action to indicate to the sender that such messages are unwanted.

Feedback from the consultation process indicated that all unsolicited electronic messages should be prohibited, whether they promote goods and services, or aims and ideals such as by a political or religious organisation. However, the government has considered that an opt-out approach to consent for promotional messages is appropriate because the right to freedom of expression is a fundamental right in a democratic society. Recipients of such messages are best placed to determine whether they wish to receive similar such messages in the future.

Regulation of the sending of commercial and promotional electronic messages

The legislation will require specified commercial and promotional electronic messages to have accurate sender identification and a functional unsubscribe facility, that is, a working and clearly visible means of opting out of future such messages. These measures empower ISPs, businesses and users to better control the email they have to deal with.

Restrictions on address-harvesting software and harvested-address lists
The Bill will prohibit the supply and use of address-harvesting software and harvested-address lists for Spam purposes.

The enforcement regime

This legislation will be enforced through a regime that provides for a range of civil pecuniary penalties and remedies.

The enforcement regime will based on a tiered structure with emphasis on Internet Service Providers (ISPs) and telecommunications carriers taking action in response to customer complaints in the first instance. If complaints cannot be satisfactorily resolved in this way then the user’s ISP/carrier can forward the matter on to the enforcement agency. The enforcement agency will then consider whether an investigation or further action is appropriate.

The government enforcement agency will have available to it a range of penalties and remedies. This will enable it to adopt a flexible approach to enforcement including issuing warnings, entering into enforceable undertakings, issuing infringement notices, seeking injunctions and taking legal action for contraventions of the Act.

Under this legislation, ISPs/carriers and users affected by contraventions of the legislation will have the right to take direct legal action as well as join any action taken by the enforcement agency.

The Department of Internal Affairs will be the responsible enforcement agency. It will have responsibility for carrying out any investigations regarding complaints referred by ISPs/carriers or matters that it considers should be investigated, issuing warnings and infringement notices, taking legal action where appropriate, and cooperating with overseas enforcement agencies

Conclusion

Madam Speaker, the Unsolicited Electronic Messages Bill gives effect to the government’s decision to enact specific anti-Spam legislation as part of a multi-pronged strategy to reduce and control Spam.

ENDS

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