The Direct Marketing Association is appealing to members to support lobbying in Mexico against the proposed introduction this fall of a federal personal data protection bill that it claims threatens direct marketing not only within that country but also across its borders.
First reported last month in DM News, the bill would require opt-in permission for the use of all personal data by firms for marketing activities. Transfer of personal data to other companies for list-rental purposes and movement of data from Mexico to the United States would become illegal.
“If a company is developing databases for marketing or for enterprise management, such as human resources, you won't be able to bring the data to the United States, and what you will be able to do in Mexico will be severely limited,” Charlie Prescott, the DMA's vice president of international business development and government affairs, said in a statement yesterday.
If enacted into law, the bill also might curb foreign investment in allied areas like information technology, the DMA said.
Mexico currently has no data protection law.
The Asociacion Mexicana de Mercadotecnia Directa — the 200-member Mexican DMA in Mexico City — has formed a task force to lobby against the bill. Executives from Reader's Digest Mexico and American Express Co. are leading that effort.
Mexico is a leading spender on direct marketing in the Spanish-speaking world. Direct marketing sales of goods and services last year increased 13 percent to $3.27 billion. Spending on DM advertising rose 10.3 percent to $1.58 billion. The U.S. share of those spends is not known.
Publishing, banks, credit cards and the Mexican-controlled telecommunications industry accounted for the bulk of direct marketing use. Direct marketing between businesses is more prevalent than business to consumer largely because of currency and postal delivery problems.
The DMA estimates the Mexican direct marketing industry supports 139,000 jobs.
Luis Miguel Barbosa Herta, a member of the Democratic Revolutionary Party and of Mexico's House of Representatives, authored the proposed piece of legislation last September.
“This is European philosophy about data protection continuing to travel from country to country,” Prescott last month told this publication.
One article requires express consent from an individual before a company can collect and store information on the individual. Magazine publishers renting lists to solicit subscriptions through the mail might be hamstrung. Targeting through demographic profiles by town and region also could become difficult.
Another article prohibits companies from transferring their list of customers or their information to third parties without the prior consent of the individual.
European countries have similar laws but created exceptions in direct marketing use of data as long as marketers give people the right to opt out.
Another article calls for a National Registry for Data Protection that would require all companies in Mexico that maintain a database to register it with the central body.
“It is a very nice revenue device because you can charge a fee to companies and individuals to register their databases,” Prescott said last month.
The proposal also calls for a prison term of two to five years for “anyone that discloses to a third party information recorded in a database or bank, the secrecy of which he [she] is obligated to observe by a legal provision,” according to an English translation by the U.S. Department of Commerce.