Directive on Privacy and Electronic Communication is generating both relief and uncertainty within the industry. The DTI's consultation paper on the EU's Directive on Privacy and Electronic Communication is generating both relief and uncertainty within the industry. On the one hand, it's welcomed and on the other, it's causing a mixture of panic and confusion amongst some who believe it will effectively make SMS marketing illegal. So what impact will the legislation have? Will it prohibit the majority of mobile campaigns in the future?

The Directive, likely to become UK law by October, calls for electronic communication to be on an 'opt-in' basis. This stands in contrast with existing laws around direct mail, which can be sent on an opt-out basis. The Directive makes one exception: - where there is an "existing customer relationship", communication can be sent regarding similar products or services, using an opt-out, instead of an opt-in. The difference between the two is opt-in consumers are required to 'tick the box', whereas opt-out 'un-tick the box' to not be part of a service. With opt-out the default is that consumers want to hear from a brand, with opt-in they have to explicitly request information.

The Directive's impact will on the whole be positive. It will not spell the end of mobile marketing campaigns, but prohibit bad practice, such as sending out blanket text messages to large databases of mobile numbers, where no opt-in is acquired. Brands will be able to continue to incentivise responses and engage an audience via mobile. Brands can continue to collect data on customers, as long as consumers have given explicit consent. Another likely effect is greater scrutiny over 'opt-in' mobile databases.The Internet spawned the practice of acquiring dubious lists by tricking users into un-ticking the box if they didn't want to receive any further information, as opposed to consciously ticking it. With mobile, ring-tone and logos vendors surreptitiously collected mobile numbers of people requesting ring-tone or logos, on databases to sell onto third parties. Luckily, this practise is no longer common place, but hopefully the Directive will force purchasers of mobile lists to ask more questions before buying and sending out to supposed 'opt-in' databases.

One problem with the Directive is the ambiguity around the definition of the "existing customer relationship". The unspecific nature of this definition raises as many questions as it answers. What is an "existing customer relationship"? At one end, a television channel has a relationship with its viewers, which most probably does not qualify. At the other, a utility company has a billing relationship with its customers, which almost certainly qualifies. The grey area between these examples is vast.

The interpretation this guideline lays open to means self-regulation has a valuable role in the implementation of this law. Self-regulation is not there just to fill holes in existing legislation and is preferable to legislation in many instances because it allows for more flexibility. The mobile marketing industry itself is very young and it's impossible to predict what it will look like in five years. Self-regulation reacts quickly to changes, whereas the process of changing legislation is long-winded. It is also effective because industry players have a strong incentive to preserve the medium's credibility. The balance between legislation and self-regulation is a fine one to achieve.