ACMA bites again: online retail giant Kogan receives AUD$310,800 fine for Spam breaches

In the latest instalment, Kogan Australia, was recently issued with a AUD$310,000 infringement notice and 3 year court enforceable undertakings, for failing to provide a functional unsubscribe facility in its marketing emails.

Section 18 of the Act prohibits the sending of commercial electronic messages (referred to as spam) with an Australian link, such as marketing emails sent to or from someone in Australia, unless such message contains a ‘functional unsubscribe facility’ which (amongst other requirements prescribed in the Act) includes:

• a statement to the effect that the recipient may use an electronic address set out in the message to send an unsubscribe message to the individual or organisation who authorised the sending of the message;
  
  
• such statement must be presented in a clear and conspicuous manner; and
  
  
• the electronic address provided in such statement is capable of receiving unsubscribe messages (if any) sent by recipients at all times during a period of at least 30 days after the message is sent.[2]

In this case, the ACMA’s investigations found Kogan had sent over 42 million marketing emails that did not contain an unsubscribe facility which made it easy for recipients to opt-out from receiving such messages, in breach of the Act. Instead, recipients were required to take extra steps including creating a password and logging into a Kogan account via its website, before unsubscribing.

ACMA’s Chair, Nerida O’Loughlin, said, “ACMA received complaints from a number of recipients of Kogan’s email expressing their frustration and concern with Kogan’s practices… The ACMA sent Kogan multiple compliance alerts before commencing this investigation. These notifications are designed to alert businesses of potential non-compliance with the Spam Act. [3]”

In addition to a hefty fine, the court-enforceable undertakings agreed to require Kogan to:

• appoint an independent consultant to review its systems, processes and procedures and implement any recommendations from such review;
• train staff responsible for sending marketing messages; and
• regularly report to the ACMA on its actions taken in relation to consumer complaints.

These undertakings apply not only to Kogan Australia Pty Ltd, but to all of the company’s trading names, which include both the Kogan and Dick Smith brands.

Key takeaways:

ACMA’s latest fine in its crackdown on spam demonstrates the regulator’s continued commitment to enforcing spam laws and making Australian businesses pay (literally) for their failure to comply with such laws. Penalties for repeat offenders are regularly being issued into the hundreds of thousands (and even millions) of dollars (see our article on previous breaches of Australia’s Spam Act here). Consequently, companies should ensure compliance with the Act is front of mind when creating and distributing commercial electronic messages, such as marketing emails, within Australia, including ensuring they contain a functional unsubscribe facility that allows recipients to easily and readily opt-out from receiving such messages, that complies with the requirements of the Act.

For more information on Australia’s spam laws, please contact Hamish Fraser (Partner) and Emma Cameron (Senior Associate) at Bird & Bird, Sydney.

[1] ACMA, ‘Kogan breaches Australian spam laws’ (Media Release MR 1/2021, 20 January 2021) https://www.acma.gov.au/articles/2021-01/kogan-breaches-australian-spam-laws

[2] Spam Act 2003 (Cth) s 18(1)

[3] ACMA, ‘Kogan breaches Australian spam laws’ (Media Release MR 1/2021, 20 January 2021) https://www.acma.gov.au/articles/2021-01/kogan-breaches-australian-spam-laws