A broad new law in Israel regulating commercial solicitations, including by email, went into effect on December 1, 2008. The law, Amendment 40 to the Communications Law, regulates the practice of sending commercial marketing materials to recipients without their consent by way of email, fax, automatic phone dialing systems or short messaging technologies (SMS, MMS). It includes both civil and criminal penalties for non-compliance, including personal liability for officers and those in charge of the marketing or advertising activities of a company. Furthermore, individuals may sue and collect up to 1,000 NIS in exemplary damages for every spam email they have received, even without proving any actual damages. To make this threat more real, the Israel Internet Association is calling on users to sue spammers and has uploaded a sample "cease and desist" letter and form lawsuit to its site.

Since the law will impact many companies, even those who do not perceive themselves as sending "spam", we are writing to provide details of the main points of the law, as well as a checklist for compliance. Most importantly for readers of Mondaq, the law may impact senders of commercial email even if they are outside of Israel.

General Rule

The new law establishes a general rule that an advertiser may not send commercial communications without obtaining the explicit, written, advance permission of the recipient. Even after a recipient has given his or her permission to receive messages, the recipient may revoke that permission at any time. This model, similar to that prevailing in the European Union, is an "opt in" model. (It differs from the "opt-out" model adopted by the U. S. Can-Spam Act, which permits unsolicited commercial email until a recipient "unsubscribes".)

What type of information is covered?

The law's scope is broad. It covers "advertising material," which is "any commercial message, the object of which is to encourage the purchase of a product or service, or to encourage spending money in any other way."

In order to be considered "advertising material", the email must meet both requirements:

First, it must be a "commercial message". Based on the 2005 explanatory notes to the proposed law, this means that it must be sent to a "large number of recipients." The law does not give guidance as to what such a large number is, and therefore, this will need to await judicial interpretation.

Second, the purpose must be to encourage spending money, either directly or indirectly. It is not clear whether a potential "indirect" or "secondary" expenditure by an email recipient will trigger the application of the law.

For example, websites which do not charge for access may send an email advertising their site and services. While the user arriving at the site does not need to pay for anything, the site itself may have advertising. This could lead a user to purchase goods. Does this mean that the original email was "advertising material" and subject to the law's strict "opt-in" mechanism? The law does not provide any guidance here.

Due to the harsh penalties, it is advisable that companies make their best efforts to follow these rules even for messages which may be construed as only indirectly related to the purchase of goods or services.

What means of communication are covered?

The law covers electronic commercial communications via:

  • Email
  • Fax
  • SMS and MMS, including by text, audio or video
  • Automated phone messages

Who is Covered?

The law broadly defines an "advertiser" as being anyone:

  • Whose name or contact details appear in the message for the purpose of purchasing the good or service;
  • Whose business is advertised or goals promoted in the message; or
  • Who markets the message on behalf of a third party.

Note that while the law does not explicitly cover recipients who are outside Israel—and therefore give them rights to sue--the drafters of the law have stated publicly that they believe that such recipients are covered. In addition, and potentially more worrisome to many companies, is that it may apply to senders outside Israel. There may be good reason to argue that senders outside Israel should not be covered by the law just because some recipients are in Israel. Nevertheless, senders which target an Israeli audience, either because the message is in Hebrew, or the service is directed to Israelis, may very well be subject to the law's requirements.

Are there Exceptions to Obtaining the Recipient's Consent?

Yes. There are two circumstances in which explicit consent from a recipient is NOT required. A message may be sent:

  • to a business on a single occasion as long as it requests a consent to send future messages; or
  • if it satisfies all three of the following conditions:
    • Previous business relationship: In the course of purchasing a product or service, or during negotiations therefor, the recipient discloses his or her contact details and was notified that such details would be used to send marketing materials.
    • Opportunity to Unsubscribe: The recipient is given an opportunity to indicate that he or she does not want to continue receiving marketing materials.
    • Similar product: The advertisement being sent is for a product or service similar to that previously purchased or negotiated.

Is there specific information that must be included in messages?

Yes. For email, in addition to receiving the recipient's consent, a message must "prominently and clearly" contain:

  • the word "advertisement" in the subject heading;
  • the name, address, telephone number, fax and email of the advertiser; and
  • the right of the recipient to unsubscribe, including a valid email address for such purpose.

Remember that the name and address of both the entity whose goods or services are being advertised, as well as the third party direct mail company, if one is used, must be included.

For SMS or automated phone messages, the word "Advertisement" should appear at the beginning of the message.

For SMS or MMS, the advertiser's name and contact details in the body of the message satisfy the "unsubscribe" requirement.

What are the penalties for violating the Law?

The real stick is the severe criminal and civil penalties for violating this law. Perhaps most importantly, officers and marketing/advertising managers can be personally liable. The law specifically requires these officers to do everything possible to prevent violations of the law. Furthermore, class actions are possible. The fines for violating the law are stiff:

  • An advertiser which sends a message without receiving the recipient's express consent commits a criminal offense punishable by a fine of up to 202,000 NIS (about €40,000).
  • An advertiser which sends a message without complying with the form and content requirements commits a criminal offense punishable by a fine of up to 67,300 NIS (about €13,000).

May individuals sue?

Yes! Some spam laws, such as the U.S. Can-Spam Act, do not provide for private enforcement -- only government entities may bring an action. The Israeli Law, however, does permit individuals to sue. Importantly, these individuals may obtain damages of 1,000 NIS (about €200) per advertisement even without proving actual damage. The courts in fact are directed to be sympathetic to plaintiffs in that they are NOT to consider the damage (or lack thereof) caused to the recipient. Rather, the court should consider the following factors in determining damages:

  • the deterrent value of an award;
  • the extent that an award would encourage recipients to enforce the law; and
  • the extent of the violation.

Importantly, the Israel Internet Association is encouraging individuals to enforce the Law, and has both sample cease & desist letters, as well as court complaints which can be downloaded from its website.

Summary and Recommendations for Compliance

We suggest that you take the following steps to comply with this new law:

  1. For emails to businesses, send a short email with a reply option indicating that if they want to continue receiving messages from you, they need to affirmatively indicate they are interested. Note that you are not permitted to send emails to consumers or individuals requesting opt-in, but only to businesses, and only on one occasion. So make it compelling! Be creative: One sender is entering into a prize drawing the names of all who give consent; the winner receives a free international round-trip plane ticket to the destination of their choice.
  2. Since officers may be personally liable, they should establish clear, written procedures for their organizations to follow to avoid violations of the law. We would recommend following this up with a documented, face-to-face session with anyone who may send out emails for your company, in order to ensure they understand how to comply with the law.
  3. Advertisers wishing to send commercial email must do all of the following:
  1. Receive express permission from recipient;
  2. Include the words "ad" or "advertisement" in the subject line;
  3. Include the name of the advertiser, and its address, fax, telephone and email;
  4. Send from a working email address to which the recipient can simply "reply" in order to be removed from the list (you may not hide behind "do-not-reply" addresses); and
  5. Maintain a central list of those recipients who have agreed to receive emails, and those who have requested removal. This is particularly important if your organization has many different groups sending mass mailings.
  1. Finally, you should check whether your insurance policies cover liability under this law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.