The Spam Act 2003 (Cth) (Spam Act) which governs commercial electronic communications, spam and online content, has been rigorously enforced by the Australian Communications and Media Authority (ACMA). Businesses found to be in breach of the Spam Act have been subject to significant penalties.
This article is a quick overview, for all businesses to check that electronic marketing messages sent to clients or potential clients comply with the conditions under the Spam Act.
Businesses have received fines totalling more than $6.5 million, in this year alone, for violating requirements under the Spam Act. ACMA have been successful in obtaining four court enforceable undertakings as a result of the breaches. Two of the companies that have been pursued by ACMA and fined include DoorDash Technologies Australia Pty Ltd (DoorDash) and the Commonwealth Bank of Australia (CBA).
Requirements of the Spam Act
Sending ‘commercial electronic messages’ are governed by the Spam Act. Direct messages that are intended to offer, advertise, or promote the delivery of goods, services, real estate, business opportunities or investment opportunities are referred to as ‘commercial electronic messages’ and may be transmitted to an electronic address using the internet or any other designated carriage service.
The usual forms of electronic messages include:
- SMS; and
- multimedia messaging services.
However, a message or marketing communication made through ‘voice calls’ over the phone are not considered to be an electronic message and may be subject to other telemarketing legislation.
It is a requisite under the Spam Act that a marketing message must specify that it is prohibited from sending any further promotional material to a recipient after they have unsubscribed and must include functional unsubscribed links.
It is also crucial to keep in mind that even if the Spam Act doesn’t apply to the marketing messages sent by your company, you may still be required to be compliant with the provisions governed by the Privacy Act 1998 (Cth) with respect to direct marketing.
Current prosecution and enforcement action of the Spam Act
There are severe penalties applied to businesses for contravening the Spam Act. Further, there are enforcement provisions and enforceable undertakings, infringement notices and formal warnings issued by ACMA to companies for contravening provisions of the Spam Act.
The largest infringement notice to-date issued by ACMA to CBA was in June 2023, of a penalty of $3,552,000 together with an enforceable undertaking requiring CBA to undergo an independent review of its e-marketing processes in order to administer improvements to their existing arrangement.
ACMA’s investigations found that CBA was in breach of the Spam Act for a period of 9 months (i.e., from 30 November 2021 to 11 August 2022), by which specific ‘commercial electronic messages’ were sent to its customers by CBA. CBA had unlawfully sent over 61 million marketing emails to customers that required each one to log-in to their account to unsubscribe from the emails.
More recently, in August 2023, ACMA issued its latest infringement notice to DoorDash for a penalty of $2,011,320 together with an enforceable undertaking – which means, failure to comply with the undertaking may result in ACMA taking an enforcement action against DoorDash to comply with the undertaking. DoorDash had sent more than 566,000 emails to customers who had previously unsubscribed from the promotional marketing. In addition, DoorDash sent 515,000 text messages to their potential drivers without an unsubscribe function.
What’s the significance here for your business?
Companies must stay up to date and be aware of their legal obligations when sending marketing or promotional emails to existing customers or potential customers. To alleviate risks, it’s advisable that businesses implement an internal assessment of their e-marketing procedures and ensure they’re compliant with the relevant legislation.
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Published: 4 October 2023