12 July 2017
Australian e-marketing company Upside.Digital has paid a $39,600 infringement notice following an Australian Communications and Media Authority investigation into breaches of the Spam Act 2003 (the Act). The ACMA has also accepted a court-enforceable undertaking from the business targeted at future compliance.
The ACMA found that Upside.Digital sent and caused to be sent a significant number of marketing emails that did not clearly contain the name and contact details of its clients who authorised the sending of the messages involved. Also, while Upside.Digital could demonstrate how it obtained consent to send emails to recipients on its own database, it was unable to demonstrate that consent had been obtained for other emails that it caused to be sent through a third party.
Upside.Digital operates as part of an affiliate marketing chain. Its activities include sending advertising emails on behalf of clients and providing these emails to other third party marketers to send to their own customer databases.
‘Every single entity in an e-marketing chain needs to be aware that they are responsible for complying with the requirements of the Act,’ said the ACMA’s acting Chairman, Richard Bean. ‘Advertisers also need to be able to prove that consent exists for all messages they have authorised, irrespective of who sends them.’
The Act requires e-marketing messages to include clear and accurate details of the entity that authorised the message. Typically this is the business whose product or service is being advertised. The authoriser and sender of the message also bears the burden of proof, to establish that consent was obtained.
If you receive a marketing email that you think may not comply with the Act, you can report it to the ACMA by forwarding the message to firstname.lastname@example.org. You can forward SMS spam to the Spam SMS service on 0429 999 888.
The Spam Act 2003 regulates unsolicited commercial electronic messages in Australia. Commercial electronic messages can be emails, SMS messages, MMS messages, instant messaging messages or any other similar message that includes a marketing/commercial element.
Affiliate marketing is an advertising model that, in this instance, consisted of three main players:
- The Advertiser – wants to advertise its products or services
- The Network (Upside.Digital) – consolidates emails from various Advertisers and provides these emails to its Affiliates
- Affiliates – sends the emails to their own individual databases.
In this model, generally both the Advertiser and the Network are causing emails to be sent, as defined by the Act. The Advertiser and the Affiliate usually do not have contact with each other, so care needs to be taken by the Advertiser to ensure that the Affiliate has, and can prove, consent. The Affiliate needs to take care that the Advertiser’s name and contact details are clearly provided in the message.
The Act requires that commercial electronic messages must not be sent, or caused to be sent, without the following:
- Consent - they must be sent with the recipient's consent. Recipients may give express consent, or consent may be inferred from their conduct and 'existing business or other relationships'
- Identification - they must contain clear and accurate information about the person or organisation that authorised the sending of the message, this is typically the business whose product or service is being advertised
- Unsubscribe - they must contain a ‘functional unsubscribe' facility to allow the recipient to opt out from receiving messages in the future.
If a person breaches the Act, the ACMA has a range of enforcement options. It adopts a graduated approach to compliance and enforcement and determines enforcement outcomes on a case-by-case basis.
Formal warnings are used by the ACMA to indicate concerns about contraventions, and allow for the business or individual to take compliance action to prevent any future contraventions.
Enforceable undertakings can be offered to the ACMA at any time, and if accepted, provide the opportunity for a business or individual to formalise its commitment to compliance with the Act. These undertakings are enforceable by the Federal Court.
The ACMA may also give an infringement notice for contraventions of particular civil penalty provisions.
In addition, the ACMA may institute proceedings in the Federal Court, including seeking an injunction. The legislation sets out penalties of up to $2.1 million a day for repeat corporate offenders after 1 July 2017.