Kogan fined over $310,000 for breaching Spam Act
An Australian Communications and Media Authority (ACMA) investigation has revealed that online retailer Kogan breached Australian spam laws. Kogan has agreed to a court-enforceable undertaking and paid a $310,800 infringement fee for breaching the Spam Act, which requires commercial electronic messages to contain a functional unsubscribe facility.
The ACMA investigation found Kogan sent more than 42 million marketing emails to consumers from which they could not easily unsubscribe. Instead, Kogan required consumers to take additional steps setting up a password and logging in to a Kogan account.
ACMA Chair Nerida O’Loughlin said the ACMA received complaints from a number of recipients of Kogan’s email expressing their frustration and concern with Kogan’s practices. The ACMA reportedly sent Kogan multiple compliance alerts before commencing its investigation; the notifications are designed to alert businesses of potential non-compliance with the Spam Act.
“Businesses must comply with the unsubscribe requirements in the spam rules. This investigation makes clear that businesses can’t force customers to set a password and login to unsubscribe from receiving commercial messages,” O’Loughlin said.
The ACMA has accepted a three-year court-enforceable undertaking from Kogan, requiring it to appoint an independent consultant to review its systems, processes and procedures, and to implement any recommendations from the review.
The undertaking covers Kogan Australia and is applicable to all of the company’s trading names, including the Kogan and Dick Smith brands. Per the undertaking, Kogan must train staff responsible for sending marketing messages, and report back to the ACMA on actions taken in relation to consumer complaints.
“ACMA alerts put businesses on notice — address consumer concerns or we will investigate you under the law, as we have done here. That said, we acknowledge that Kogan fully cooperated with the ACMA in our investigation and took actions to update their unsubscribe facilities prior to its completion,” O’Loughlin said.
Over the past 18 months, businesses have paid over $2,100,000 for ACMA-issued infringement notices for breaking spam and telemarketing laws. Enforcement action for breaches of spam laws can include formal warnings, infringement notices, action in the Federal Court and accepting court-enforceable undertakings. Repeat corporate offenders can face penalties of up to $1.11 million a day.
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