Electronic Marketing and the Australian Spam Act 2003 - Legalwise Seminars

Katarina Klaric, Principal and Director at Stephens Lawyers & Consultants, discusses the importance of the role electronic marketing campaigns plays in a business’s overall marketing strategy, by examining compliance with the Spam Act and past cases.

Electronic marketing campaigns play a significant part in business’s overall marketing strategy for the promotion of their business, goods and services. They provide an effective tool for the delivery of marketing messages via email or text messaging. However, businesses utilising electronic marketing communications that are linked to Australia must ensure their electronic communications comply with the Australian Spam Act 2003 to avoid significant penalties and court action. Adequate systems, processes and procedures are critical to ensure compliance with the Spam Act and to minimise the risk of infringement.

Optus and Woolworths pay Penalties for breaches of Spam Act

Optus paid a $504,000 penalty after the Australian Communications and Media Authority (“ACMA”) issued an infringement notice under the Spam Act for alleged breaches of the Act. ACMA alleged that Optus, during the period 1 June 2018 to 4 December 2018, had sent out commercial electronic messages without the express or inferred consent of the relevant account holders and its messages did not have a proper unsubscribe facility. Optus also provided ACMA a three year court enforceable undertaking to ensure compliance with the Spam Act[i].

Woolworths Group Limited (“Woolworths”) paid a pecuniary penalty in response to an infringement notice for $1,003,800 issued by the ACMA in May 2020 and also provided court enforceable undertakings for alleged breaches of the Spam Act. ACMA alleged that:

• Woolworths had, during the period 1 October 2018 and 17 July 2019, sent electronic messages to electronic addresses for the purpose of offering to supply or advertise or promote goods sold by Woolworths;
• these messages were “commercial electronic messages” as defined by section 6 of the Spam Act and had an Australian link as required by section 7 of the Act;
• these electronic messages had been sent after the account holder had withdrawn their consent;
• the information provided by Woolworths indicated that this occurred due to system failures and Woolworths was not able to demonstrate that it had adequate systems, processes and practices in place for compliance at the time of the alleged contravention of the Spam Act[ii].

As a part of court enforceable undertakings Woolworths agreed to appoint an independent consultant to review and report on the relevant business units’ current procedures, policies, training and systems in respect of compliance with the Spam Act; implement recommendations contained in the report and undertake training of staff and ongoing monitoring of compliance[iii].

Risk Management Strategies for Compliance with the Spam Act

Businesses involved in electronic marketing campaigns offering, advertising or promoting goods, services, land or interest in land, business or investment opportunities, should have a current strategy and implementation plan for compliance with the Spam Act and management of risks. Some of the factors that business need to consider as a part of their strategy and risk management plan include:

• Education and training of personnel of business units involved in creating or sending of commercial electronic messages on Spam Act
• Review of existing procedures, policies, processes, systems and training for compliance with the Spam Act.
• Implementation of improvements to areas identified by the review as deficient or requiring improvement.
• Review and monitoring of electronic messaging system to ensure marketing messages are only sent with the express or inferred consent of customers or prospective customers and contain the identity and contact details of the business sending the message.
• Review and ongoing monitoring of IT systems used to send out electronic marketing messages to ensure that the systems contain a functioning “unsubscribe facility” as required by the Spam Act and that unsubscribed requests are actioned within the period specified in the Act.
• Ongoing monitoring of business units to ensure compliance with Spam Act and compliance measures.

© Copyright August 2020 — Stephens Lawyers & Consultants

Disclaimer: This update is not intended to replace obtaining legal advice.

[i] ACMA MR 04/2020 titled “Optus pays $504,000 for spamming Australian”; Enforceable Undertaking under s38 Spam Act 2003 accepted by ACMA on 7 January 2020 published at https://www.acma.gov.au/sites/default/files/2020-01/Optus%20-%20Spam%20Act%20investigation.PDF

[ii] Infringement Notice issued by ACMA to Woolworths Group Limited under Section 3(1) Schedule 3 to Spam Act 2003 dated 28 May 2020 and Enforceable Undertaking under section 38 of Spam Act provided by Woolworths Group Limited and accepted by ACMA on 16 June 2020 published at https://www.acma.gov.au

[iii] Ibid.

Katarina Klaric is a Principal and Director of Stephens Lawyers & Consultants, and is skilled in both litigation and commercial business transactions. As a litigator Katarina has been involved in leading cases involving intellectual property infringement, contravention of the Australian Competition & Consumer Law and complex commercial issues. Connect with Katarina via email or LinkedIn