The Electronic Communications and Transactions Amendment Bill, 2012 (Bill) is likely to cause a buzz among wireless application service providers (WASPs).

The Bill proposes extending the application of the consumer protection provisions of the Electronic Communications and Transactions Act, 2002 Act) to wireless application services with the aim of minimising the transmission of spam or preventing it altogether. In addition, the seven day cooling off period contained in the consumer protection chapter of the Act will apply to WASPs. It is not all doom and gloom for the WASP industry as the limitations of liability provisions of the Act will be extended (eventually) to apply to certain WASPs if the Bill is passed in its current form.

Unsolicited communications

Presently, in terms of the Act, a person sending unsolicited commercial communications must provide the consumer with an option to cancel a subscription and must provide the consumer with identifying particulars from which the sender of the communications obtained the consumer's personal information if so requested by the consumer.

A definition for 'unsolicited communications' has been suggested in the Bill. In terms of the Bill, a communication message regarding goods or services transmitted to a consumer by or behalf of the supplier without the consumer having expressly or implicitly requested that message, constitutes 'unsolicited communications'. The Bill, if passed in its current form, will make the transmission of unsolicited communications unlawful. The definition of 'unsolicited communications' is wider than the definition of 'spam' contained in the Wireless Application Service Provider Association (WASPA) Code of Conduct (Code). The Code excludes messages sent to consumers with whom there is a prior commercial relationship from the definition of 'spam'. The Bill does not give this latitude.

The Consumer Protection Act, No 68 of 2008, (CPA) also deals with unsolicited communications. In terms of the CPA a person may refuse to accept so-called 'direct marketing' (that would include messages for goods and services sent by WASPs) by demanding that the person responsible for initiating the communication desist from any further communication or by registering a pre-emptive block with a person managing a registry recognised by the National Consumer Commission (Commission). A direct marketer must, in terms of the CPA regulations, assume that a potential recipient of a message has registered a pre-emptive block unless the direct marketer has proof that the recipient has expressly consented to receiving direct marketing from the direct marketer. It is therefore incumbent upon the direct marketer to interrogate the registry prior to sending direct marketing messages. These provisions of the CPA are of little or no effect until such time the Commission recognises a registry.

The Bill goes a step further than the CPA. While the CPA allows for consent to receive messages, the definition of 'unsolicited communications' requires that the recipient 'request' the message. The proposed wording of s42(1) states that no person may send unsolicited communications without the 'permission' of the consumer to whom the unsolicited communications are being sent. The proposed amendment requires some refinement given that the definition of 'unsolicited communications' incorporates reference to a consumer request which is more onerous than the requirement for permission.

What will cause some alarm is that the Bill makes provision for the imposition of a fine up to a maximum of R1 million or imprisonment for a period not exceeding one year if a person sends unsolicited communications. The criminal sanction would presumably be over and above any sanction imposed by an industry association such as WASPA.

Cooling off period

The Bill proposes the extension of the definition of 'service provider' to incorporate persons providing wireless application services. The category of 'persons providing wireless application services' is a wider category of service providers than WASPs as defined in the Bill as the definition in the Bill defines a WASP as a person who has concluded an agreement with an electronic communications licensee enabling the provision of wireless application services. Not all persons providing wireless application services have concluded agreements directly with electronic communications licensees.

An implication of the extension of the definition of 'service provider' is that the cooling off period contained in s44 of the Act will become applicable to persons providing wireless application services regardless of whether those persons have concluded agreements directly with electronic communications licensees. Accordingly, a consumer may cancel without reason and without penalty, any transaction for the supply of services or goods within seven days after the date of conclusion of the agreement. If the consumer does so, he/she will be entitled to a full refund within thirty days of cancellation. From the perspective of a person providing wireless application services there is a potential that consumers will receive and consume services for a period of seven days and then terminate the agreement demand repayment of subscription fees.

Protection of personal information

The Act contains a number of principles set out in s51 for electronically collecting personal information. These principles are aimed at protecting private personal information and include an obligation to obtain express permission for the collection and processing of personal information, disclosure in writing of the specific purpose for which personal information is requested, record-keeping, nondisclosure obligations and requirements to destroy obsolete personal information.

Presently, data controllers (i.e. any person who electronically requests, collects, collates, processes or stores personal information) may voluntarily subscribe to the principles. The Bill requires that each data controller subscribe to the principles and must, in addition record the fact that it has subscribed to the principles in any agreement with a data subject.

Limitation of liability

The Act exempts 'service providers' from liability to the extent that the service provider concerned acts as a mere conduit for information in that it does not initiate the transmission, does not select the addressee, or perform its functions in an automatic, technical matter without selection of data and does not modify the data contained in the transmission.

Presently the limitation of liability only applies to Internet service providers. A consequence of extending the definition of 'service provider' is that the benefits of the exclusion of liability provisions of the Act will be extended to WASPs. WASPs who provide content and who select the addressees will not however benefit from the amendment if it is affected.

In addition, the Bill provides that, in order to benefit from the limitation of liability provisions, the service provider that acts as a mere conduit must be a member of a representative body recognised by the Minister of Communications and the service provider must have adopted and implemented the code of conduct. WASPA would need to be recognised by the Minister as a representative body before any WASP can take advantage of the limitation of liability provisions contained in the Act. The Bill proposes that a representative body that applies to the Minister for recognition will be deemed to be recognised after a period of twelve months has elapsed from the date of application if the Minister has not indicated to the contrary. While the deeming provisions may be welcomed by representative bodies, for many the period of 12 months may seem inordinately long and a positive obligation on the Minister to act within a reasonable period of time would be preferred.

The proposed amendments to the Act are wide ranging and the effects of certain amendments on WASPs are but one aspect that requires careful consideration. Written representations are due on 7 December 2012 and a number of industry associations have expressed reservations regarding the feasibility of this deadline. In our view, given the ramifications of the amendments and the range of interested parties affected thereby, it would be appropriate for the Department of Communications to extend the deadline.

Written by Kathleen Rice, Director, Technology Media and Telecommunications practice, Cliffe Dekker Hofmeyr