The new law criminalizes companies that do not notify customers about using their personal data for direct marketing.
Privacy Commissioner Allan Chiang Yam-wang also made it clear that silence cannot be construed as consent when businesses are faced with a "non- response." Only consent that is expressly given is valid.
"In determining whether or not 'consent' has been validly given, it will be relevant to consider the circumstances under which the data was collected and the consent obtained," the watchdog said.
Therefore, with the implementation of the amended law, the existing "opt- out" arrangement is being replaced by more stringent requirements.
Individuals have now been given the flexibility to select which category of their personal data they wish direct marketing firms to use; the type of direct marketing they wish to receive, or not receive; and they have the ability to restrict certain businesses from passing on their personal data to others.
Direct marketers now have to provide their customers with a response facility through which they can indicate in writing whether they object to the intended use of their personal information.>Offenders face a fine of up to HK$500,000 and a maximum three years in jail.
Those who intend to sell personal data, meanwhile, will be subject to disclosure requirements similar to those for direct marketing activities. Individuals will have a similar right to opt out.
In this case, offenders will face a fine of up to HK$1 million and imprisonment of up to five years.
The new regulations not only protect consumers, but also businesses that rely heavily on promotions, said Ohad Hecht, managing director of Austria- based consulting firm emarsys.
"The amended law provides better protection of personal data, meaning that consumers will feel more confident in allowing businesses to use their data," Hecht said.
"They have the choice of who can promote to them and how."
On the ethical front, he said, successful firms will be able to show respect to their customers.
"Or they will simply walk away," he stressed, adding that the new laws will force companies to go for quality promoters - they must find meaningful ways to inspire others.
Hecht, who is a specialist in e-mail marketing services, feels this is an opportunity for businesses to plan carefully on how they can approach potential clients.
At the same time, they have to seek improvements in products or services.
"Customers will be willing to listen more if you have a good track record to provide good products or services," said Hecht, who expects businesses will boost their loyalty or membership programs to keep customers.
The law change came after an outcry over the sale of personal data by Octopus Holdings in 2010. At the time, the privacy commissioner found the firm guilty of selling the information of two million users of its reward cards to business partners without their consent.
Octopus dodged punishment, but the case forced the privacy watchdog to look for new rules on direct marketing and sales of personal information.