Strict Mexican Data Bill Could Move This Fall

A data protection bill could be introduced this fall in Mexico that would severely limit direct marketers doing business in that country, according to the Direct Marketing Association and a U.S. list broker that does business in Mexico, Brazil, Argentina, Chile and Costa Rica.

“This is European philosophy about data protection continuing to travel from country to country,” said Charles Prescott, vice president of international business development at the DMA. “That would kill the list business. This is a major problem in Germany, Denmark and Austria.”

Douglas Sacks, senior vice president at list brokerage and management firm Infocore Inc., said the proposal would limit businesses in Mexico.

“It's a typical pedantic piece of legislation written by politicians and not businesspeople,” he said. “Now it's up to the [Mexican direct marketing association] to see if they can work with the [Mexican Congress] to craft a law that both protects the individual and allows businesses to continue to conduct business.”

Infocore manages more than 200 million legally obtained and consented names in Mexico, Brazil, Argentina, Chile and Costa Rica.

The bill was authored last September by Luis Miguel Barbosa Huerta, a member of the Democratic Revolutionary Party and Mexico's House of Representatives. It has not been taken up by the House yet, though Prescott said it could move when the Mexican House begins its next session this fall.

A translation of the proposed bill made by the U.S. Department of Commerce and obtained by DM News reveals several articles that would limit database construction, list rental and information gathering.

One article requires that an individual give his express consent to a company before the company can collect and store information on the individual. Magazine publishers renting lists to solicit subscriptions through the mail may be hamstrung. Targeting through demographic profiles by town and region also could become difficult.

Another article prohibits companies from transferring the list of people or their information to third parties without the prior consent of the individual.

European countries have similar laws, but have built exceptions in direct marketing use of data as long as marketers give people the right to opt out and still protect their privacy.

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.

The proposal 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.”

Manuel Viniegra Dow, president of the Asociacion Mexicana de Mercadotecnia Directa — the Mexican DMA — did not return calls and an e-mail requesting comment. But it is believed that the 200-member Mexican direct marketing association is lobbying the government against imposing such a stringent law. A privacy committee with AIG, American Express, Citigroup and Ford representatives on board is also part of the effort.

Direct marketing sales of goods and services in Mexico rose 13 percent last year to $3.27 billion. Spending on direct marketing advertising also was up 10.3 percent to $1.58 billion. The U.S. share of those sales and spends is not known.

Publishing, banks, credit cards and the Mexican-controlled telecommunications 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.

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