01/02/2013

Many businesses have a client database with the client’s email address.  But if you’re the business can you sell that database or will that breach the SPAM law?

Client email address lists are a valuable asset in any business. Lately we’ve been asked whether a business owner can sell their email address list as part of their business. The answer depends on three main points:

1.   how the list was obtained;
2.   how the list was used; and 
3.   how the buyer proposes to use the list

How the list was obtained

If the list was obtained using address-harvesting software, the SPAM Act 2003 (Cth) prohibits its sale. But if you obtained and used the addresses in accordance with the requirements for the sending of commercial electronic messages, and the buyer is not proposing to use the list to send unsolicited messages, there is no express prohibition on the selling of email addresses under the Act.

A “harvested address list” is:
“a list, collection or a compilation of electronic addresses where the production of the list, collection or compilation is, to any extent, directly or indirectly attributable to the use of address-harvesting software”.

The term “address-harvesting software” means:
“software that is specifically designed or marketed for use for searching the internet for electronic addresses and collecting, compiling, capturing or otherwise harvesting those electronic addresses”.

To buy and sell respectively the email address list, the buyer and seller must be satisfied that the list was genuinely obtained as part of a commercial business relationship and not by the use of address-harvesting software.

How the list was used

The second matter concerns how the seller used the email address list. 

A person must not send or cause the sending of commercial electronic messages unless they are designated commercial electronic messages, namely:

•   they must clearly identify the sender;
•   the recipient must be able to contact the sender; and 
•   they must contain a functional unsubscribe facility.

A “commercial electronic message” includes offers to supply, advertise or promote goods or services or a supplier of goods and services. 

But the prohibition does not apply if the electronic account holder consented to the sending of the message.  Consent can be express consent or consent reasonably inferred from the conduct and business and other relationship of the individual or organisation concerned.

Both the buyer and the seller need to be satisfied that the seller only used its email addresses to send designated commercial electronic messages, or that the client consented to the sending of such electronic messages.

How will the buyer use the list

The SPAM Act does not apply if the seller has no reason to suspect that the buyer intends to use the software or list in connection with sending unsolicited commercial electronic messages. Unfortunately, what is meant by an “unsolicited” message is not defined in the Act, but it refers instead to the use of “designated commercial electronic message” as discussed above. 

So the seller needs to be satisfied that the buyer will only use the email address list lawfully, namely, to send designated commercial electronic messages and not for the unlawful sending of unsolicited messages.

Provided all these conditions are met, the seller can sell its client email list.

If you need assistance or have any questions in relation to this article, please contactTOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.