What does the POPI Act mean for Sports Sponsorship?
The POPI Act has been on everyone’s lips since the Act was first drafted and even more so since the Act was brought into effect on 1 July 2020 giving everyone 12 months to comply before the 1 July 2021 deadline, but while “POPI Compliance” has become a new buzzword to be thrown about in meetings what does it actually mean for Rights Holders and Brand Partners?
With the POPI Act being so new there is very little certainty as to how the law will be enforced. There is no case law or history to fall back on and while there is talk of various industry specific codes being developed the timing thereof is uncertain and until such time as there is clearer guidance it is up to Rights Holders to ensure that they protect both themselves, as well as their audience, while offering value to Partners.
A key right traditionally offered to Brand Partners as part of many sponsorship agreements is the ability to market their products or services to the Rights Holders’ audience. Without this link to talk directly to an audience a Brand’s ability to link their sponsorship directly to communication (and hopefully sales) is significantly restricted. It is customary for Rights Holders to either allow their Brand Partners to communicate through them (i.e. the Rights Holder retains the information) or in some cases, pass the information on directly to Brands and their sales channels. How do Rights Holders now offer similar value to Partners without falling foul of the POPI Act and its significant penalties?
Both of the above methods fall under the definition of Direct Marketing and are governed by Section 69 of the POPI Act. In terms of the Act the subject must consent to the processing of the Personal information and the Personal information may only be collected for a specific and lawful purpose and may not be retained longer than is required to fulfil the purpose unless the subject otherwise agrees to the retention. There’s a lot going there.
Furthermore in terms of Direct Marketing the subject must specifically agree to their information being processed for such purposes. So in the case where the Rights Holder communicates on behalf of Brand Partners, it is a requirement of the Act that the subject have explicitly consented to receive such marketing. It is not clear however whether or not this consent should be “opt-in” or “opt-out.”
In the case where the subject’s information is shared with the Brand, in order for the Brand to market directly to the subject, it gets a little trickier. The current opinion on the sharing of information in this manner is that it amounts to the selling of a database and may very well be illegal. The payment of sponsorship/rights fees having been regarded as an indirect form of remuneration in return for the subject’s Personal information.
Where does that leave us then? Until we start to see how the Act is interpreted and enforced Rights Holders would be advised to take a cautious approach and ensure that they retain ultimate control of the Personal Information collected from their audience. The Act while new will remain newsworthy and a hot topic with individuals looking to highlight those cases in which they feel their rights under POPI have been infringed.
Rights Holders may try to indemnify themselves via contract however it is ultimately the Rights Holders’ reputation at risk should there be a breach of Personal Information, regardless of where down the chain that breach occurred. As the saying goes, “a good reputation is hard won, and easily lost.”