In a class action filed against Google, a district court in Israel was asked to decide whether the display of ads by Google’s Remarketing service required the user's prior explicit written consent, pursuant to the provisions of the Israeli Spam Act. In a rather complex decision (Class Action 1862-11-12 Joseph Toister v Google Inc., delivered on September 18) the court used creative analysis and reading of the law to dismiss the case.
The Google Remarketing Service
Behavioral retargeting (retargeting, in short) is a common practice for displaying online ads. Website owners use retargeting services to “follow” the user's activities on other websites and display advertisements that match the user's online behavioral patterns. The targeted ads are meant to lure the user back to the website that uses the retargeting service and to cause the user to engage in a transaction; i.e., buy a product, register to a service, etc.
Along with the advantages to advertisers (and perhaps to users as well, who view advertisements tailored personally to their preferences), remarketing services raise concerns, because they constantly monitor users' behavior and collect vast amounts of personal information—thereby creating privacy and data misuse issues.
Google offers its clients, among others, a retargeting service called Remarketing. Google purchases advertising spaces from various publishers (website owners) and directs advertisements to the advertising spaces in a way that analyses which user is interested in which content, according to the information collected by Google and to its client base of website owners who use the service.
The Action Against Google and the Israeli Spam Act
In December 2008 Amendment No. 40 of the Communications Law (Telecommunications and Broadcasting) - 2008, came into effect, to prevent the distribution of unsolicited advertisements. The essence of the act provides that a "publisher will not send advertisements by facsimile, auto-dialing system, an electronic message or a short message without the prior written express consent of the recipient.”
An "Electronic Message" is defined as an "Encoded telecommunications message, which is transmitted over the Internet to a recipient or a group of recipients, and may be stored and retrieved in a computerized manner."
In November 2012, the claimant, Joseph Toister, filed a motion for preliminary approval of a class action against Google with the central district court, arguing that the Remarketing service violates Israeli Spam act by transmitting advertisements through electronic messages without the prior consent of the recipients.
The court ruled in favor of Google for a number of reasons, as explained below.
Does Displaying Ads by the Remarketing Service Constitute a Transmission of an "Electronic Message"?
The court ruled without doubt that the Remarketing service meets the first two requirements under the definition of "Electronic Message"—it is an encoded telecommunications message, and it is transmitted over the Internet.
Google argued that the other two requirements in the definition do not apply to the Remarketing service. In Google's view, the service does not send advertisements "to the recipient or group of recipients" because Google does not have any information regarding the identity of the recipients. This argument involves a problematic factual claim, as it was recently revealed, with the help of Edward Snowden, that the NSA uses Google's cookies to identify online activities of suspects. This shows that Google's cookies at least assist in identifying Internet users. Additionally, Google assumed that 'recipient' for the purpose of the law must be an identified user. However, the Spam Act does not differentiate between identified and un-identified recipients. Consequently, the court did not rule in favor of Google's argument in regard to this third requirement of the "Electronic Message" definition under the law.
Google also argued that the displayed ads cannot be "stored and retrieved in a computerized manner." Assuming that a copy of the ads is not downloaded to the user's device, there may be merit to this argument, though the claimant argued in response that using the standard 'print screen' button will store the webpage together with the add.
According to Google, the ads "do not exist and are not shown in the individual's electronic sphere" and therefore do not meet the requirements of storage and retrieval. The separation between the private and the public sphere, in our opinion, is correct. The Spam Act was designed to protect the recipient's private realm against nuisance and violation of privacy. However, the distinction between the two is not trivial at all; for example, a TV commercial is not stored on a user's device and is displayed simultaneously to hundreds of thousands. When a person watches the commercial on her private TV screen at home, is the commercial displayed in the private or public sphere? In any case, the law did not make such a distinction and the court did not accept it either.
Thus, on its face, Google has failed in its attempt to exclude the advertisements it displays through the Remarketing service from the Spam Act provisions.
So Why did the Court Rule that Remarketing is not Spamming?
The court held that in today's technological reality almost any advertisement displayed on a computer screen or mobile phone may be an “Electronic Message” under the definition of the law. A literal interpretation of the definition may result, according to the court to "the collapse of a substantial portion of the existing business models on the Internet, based on this type of advertising revenue."
With the assistance of legal theory, the court practically altered the law's provisions and held that when defining the "Electronic Message," lawmakers meant using a software system designed for delivery, receipt and management of messages according to user's preference, or in other words, email (and possibly instant messaging services as well).
The court further held that the Spam Act's purpose was not to protect Internet users from all types of advertising (an assumption that we strongly agree with), but only to protect them from the hassle of handling of advertisements. (This is incorrect in our opinion. The Spam Act also aimed to prevent the un-consensual invasion of the private sphere of the recipient.)
What the Court Did Not Know and Could Have Had an Impact on the Decision?
Advertisers who use the Remarketing service, are required by Google to add a notice about their use of the service and the data collection by Google, as part of their website's privacy policy. In addition, Google requires that the user will receive an explanation about the available ways for removing herself from the list of users who are served with Google's targeted ads. This is a typical 'notice and choice' mechanism and it follows U.S. laws. However, Israel, much like the EU and other territories, has a consent-based privacy legal structure. The Spam Act follows the same consent requirements. At least in some of the cases, users do not provide their “prior written express consent,” as required by the Spam Act, or “mindful consent,” as required by the Protection of Privacy Act, to the website's privacy policy. The court's decision does not address this issue and we can only assume that it was not raised by any of the parties.
What was Missing in the Decision and Could have been Useful to Justify the Decision?
The Spam Act requires that an “Electronic Message” will include the word "advertisement" in its title. The term “title” in the law assumes that the message is divided between title and other content that is not the title. Such division is relevant to email messages in which the title appears usually in the subject line of the message. Typical banners do not have this kind of division. This significantly strengthens the theory that the legislature used the broad term "Electronic Message," while the intention was to address unsolicited commercial email.
Conclusions
No doubt, the result that the court reached is the correct result. The Spam Act had no intention to apply to the said form of Google advertising. But in their quest to fight spam, the legislature used inaccurate and too-broad definitions. It calls for a fine-tuning of the law's provisions.