Online retailer cops hefty fine over marketing emails – could your business be breaching spam laws?

Online retailer cops hefty fine over marketing emails – could your business be breaching spam laws?

Australia’s communications watchdog, the Australian Communications and Media Authority (ACMA), has been on an investigation blitz over the past 18-months, having issued over $2.1 million worth of infringement notices to businesses in breach of spam and telemarketing laws.

One of these businesses is the well-known online retailer, Kogan, which was recently penalised for sending marketing emails from which consumers could not easily unsubscribe.

australia’s spam laws

Before we jump into the details of what landed Kogan in hot water, let’s first understand the Australian laws that apply to spam and telemarketing and why they exist.

The Privacy Act 1988 (Cth) (Privacy Act) and Spam Act 2003 (Cth) (Spam Act) both apply when it comes to direct marketing, however, the Spam Act is sometimes forgotten. An easy way to contrast the two is; the Spam Act’s purpose is to regulate the sending of electronic messages of a commercial nature, whereas, while the Privacy Act may also regulate such activity, it only covers private sector organisations use of “personal information” (information which can be used to identify or reasonably ascertain the identity of an individual).

In the Kogan matter, the ACMA action involved consumer rights that apply through the Spam Act, given it imposes obligations on businesses that send “commercial” electronic messages to customers (e.g. advertising or promoting a product or service). These obligations include:

  • recipient consent;
  • accurate sender information; and
  • providing a functional unsubscribe facility.

If your business sends any marketing emails or messages to customers, it is important that you understand these responsibilities under the Spam Act.

kogan’s breach of the spam act

After being investigated by the Australian Competition & Consumer Commission (ACCC) in mid-2020 for making false or misleading representations regarding a sales promotion, Kogan has landed in trouble again, this time for breaching the Spam Act.

Kogan sent over 42 million marketing emails, which required the recipients to set up a password and log into a Kogan account to unsubscribe.

After receiving numerous complaints from recipients of these marketing emails, the ACMA put Kogan on notice and subsequently carried out an investigation. The ACMA found that Kogan’s conduct had breached a requirement under the Spam Act which requires commercial electronic messages to contain a functional unsubscribe facility.

The company was issued with a $310,800 infringement notice and a comprehensive three-year court enforceable undertaking.

key takeaways

Kogan’s conduct and the ACMA’s recent investigation serves as a reminder to businesses that they must comply with their obligations under the Spam Act or face significant penalties of up to $1.11 million per day, for repeat offenders.

Learn from Kogan’s mistakes and ensure your business does two things:

  1. Always include a functional unsubscribe / opt out option in commercial electronic messages; and
  2. Always ask the question – can your recipients easily opt out of marketing emails? If the answer is no, then review and update your e-commerce practices.

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