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Japan – Over-reaction to the Privacy Law

Date: April, 2010 --

When the Japan Parliament adopted a typically vaguely-worded Japanese law on privacy in 2005, many commentators with long experience in Japan, such as Charles Prescott of the DMA, predicted that "the list business is dead in Japan".

The law delegated responsibility for drawing up industry regulations on data management and privacy to respective ministries in the government. This is a common way to regulate industry in countries that have adopted the German government model, such as Japan and Korea. It is confusing to Americans, and this particular subject is even more puzzling. Privacy is privacy and data protection is data protection, because people are people regardless of what business they are in.

As a consequence, many ministries have drawn up rules and regulations that apply to their industry. The marketing department of automaker Honda, and that of the electronic product maker Sony conceivably would have to treat their customers under different regulations.

Fortunately, there has been substantial movement toward unified regulations in this area. However, another problem has taken its place as the most important, which is the fact that violations of the vaguely worded statute can be punished by phenomenally high fines.

According to Todd Crosland of direct2one, a direct marketing agency whose principals work constantly in Japan, lists now seem to be available only in dark rooms and for cash. Most of their work in Japan in the last several years has been of a CRM nature. For their clients, they have been doing a great deal of database analysis with a view to up-selling and cross-selling, and much less prospecting.

If you have a current Japanese customer file, it is extremely valuable. So keep it healthy and enrich it with appended data when you can and have Data Services be sure it is as current and accurate as possible.