Industry before the end?: Data protectionists want to ban address trading

According to information from NDR and “SZ”, most state data protection officers are of the opinion that the GDPR no longer allows addresses to be passed on for marketing purposes without the consent of those affected.

The message from the privacy advocates is clear: We live in the year 2022 – and consumers should expect something different when it comes to handling their data than they did ten or twenty years ago. “They no longer want to be confronted and bothered with unwanted, unsolicited so-called consumer information,” says Baden-Württemberg’s state data protection officer Stefan Brink.

One reason for clogged mailboxes: Up until now, consumer addresses have been able to be traded in a relatively uncomplicated manner. A company that has a consumer’s home address can easily resell it – if the buyer wants to use it for mailings. However, according to many supervisory authorities, this is no longer possible.

Is address trading compatible with GDPR?

Because a stricter European data protection law, the so-called General Data Protection Regulation (GDPR), has been in force since 2018 – and this must now finally be applied consistently. So far, companies have been able to refer to a “legitimate interest” in address trading, which basically means that the company’s interests outweigh those of those affected.

However, the GDPR now stipulates that consumers must be informed if their address is to be sold. According to the state data protection officer Brink, they would then have to give their express consent:

This obligation to provide information is “a real hurdle”, according to Brink: “And here everyone who wants to do address trading has to deliver correctly.”

Is an entire industry on the brink of collapse?

This is a view that according to information from NDR and “Süddeutsche Zeitung” are now shared by almost all German data protection authorities – and which could now upset an entire industry. Because the question is also: Can you still trade with this data in the future?

In order to give their informed consent, consumers would need to know who is using their address and how in the future. At the time of approval, however, the address dealers do not yet know who they can sell the address to in the future. Trade should now regularly fail at this hurdle. So is an entire industry on the brink of collapse?

In any case, the lobby of the address dealers, the German Direct Marketing Association (DDV), is already warning of the negative consequences. According to DDV President Patrick Tapp, this would have “serious economic effects, because selected mail advertising is an important motor for the European economy.” One thing is clear: the address dealer industry makes millions, if not billions, in sales every year with consumer data. If that becomes more difficult or completely impossible, it would hit the industry enormously.

Address trading is still permitted from the point of view of the DDV

However, the DDV reads European data protection law differently. Address trading in the previous form is therefore still permissible, changes can only be made at European level, and statements by German state data protection officers are merely a “legal opinion”. Not only that: In addition to the addresses, other characteristics can also be stored – such as age, occupation or whether you live in a rented apartment or your own home. According to DDV President Tapp, it is particularly important for young companies to send out customized advertising by post in order to attract new customers.

This is exactly what data protection officer Brink sees as a problem, because such advertising presupposes “that the advertising industry also knows the wishes and preferences of the consumer, i.e. beforehand creates so-called profiles with interests and previous buying behavior.” You should be able to defend yourself against that, says Brink: “Nobody has to be screened in advance for advertising purposes.”

Conflict of interest in North Rhine-Westphalia?

The data protectionists get encouragement from the Federation of Consumer Organizations (VZBV). With a view to the General Data Protection Regulation, it would be good if the sale of consumer addresses was restricted, according to VZBV expert Florian Glatzner. “This legal basis has now been in force for four years and is also well known. And that’s why we think it’s good that the data protection officers are finally clarifying things and taking action.”

The Berlin data protection authority stated that they wanted to bring about a decision in order to appear uniformly nationwide. Basically, only the data protection authority of North Rhine-Westphalia stands in the way of this uniformity. She considers address trading to continue to be permissible in its current form.

That’s not surprising, comments a data protection officer from another federal state, who wishes to remain anonymous. This may have something to do with the economic interests of the state. Because two of the largest German address dealers, subsidiaries of Bertelsmann and Deutsche Post, have their headquarters in North Rhine-Westphalia.