This month the Australian Communications and Media Authority (ACMA) added to its list of major businesses fined for spam. The fines were for SMS spam by direct marketers.
The ACMA calculates that SMS spam (photo credit: Big Mouth Media) now accounts for 20% of all complaints to it. The increase is confirmed by the Telecommunications Industry Ombudsman.
The ACMA took action against the Pitch Entertainment Group, trading as Splash Media. The ACMA's press release states that Pitch sent over one million commercial SMS messages to mobile phones without a functional unsubscribe facility.
1. What was the penalty imposed on Pitch?
Pitch was forced to pay and agree to:
a fine of $A11,000 for "extensive breaches" of the Spam Act 2003 (Cth);
an enforceable undertaking that requires future compliance with the Act;
ongoing compliance reporting; and
staff education obligations.
This month the ACMA also fined International Machinery Parts Pty Ltd (IMP Mobile) A$4,400 for breaches of the Spam Act. Like Pitch, IMP Mobile failed to provide a functional unsubscribe facility when sending messages to mobile phones. As mobile phones evolve (see above graphic), so does spam, resulting since about 2000 in new attempted legal and technical fixes worldwide. One of our clients is a vendor of a patent-pending technical fix.
2. What must you do to comply with spam law?
The legal fees Pitch and IMP Mobile incurred are not known. For several months Web searches for their names will list articles referring to their breach of law. They could have avoided this PR debacle, fines and even greater compliance costs had they - in a timely fashion - obtained and implemented a training and legal compliance program.
3. How many legal actions have been taken against spam?
The ACMA and ACA, its predecessor, have since 2004 issued hundreds of warning letters and well as several fines, enforceable undertakings and search warrants. Investigations of complaints are continuing. The risks can be greatly minimised by establishing procedures which comply with legal requirements and conform with relevant codes of conduct. This is also the case for telemarketing as noted in Telemarketers must comply with the Do Not Call Register Act.
4. What are the categories of spam and largest fines paid in Australia?
The Federal Court of Australia still holds the record for imposing the highest fine so far. In its 2006 decision it fined an email marketing company and its director A$5.5 million dollars for breaches of the Spam Act. The offending spammer, a company named Clarity1 and its director Wayne Mansfield, had sent approximately 231 million spam emails to 8 million different email addresses since the Spam Act came into force throughout Australia in April 2004. Clarity1 obtained the email addresses by using address harvesting software and address lists purchased from others.
McAfee, a US IT security software vendor, features on its Website the accompanying graph under the title "Current Spam Categories". The data source for the graphic is not stated.
A great deal of spam reaching Australia comes from the US. In April 2007 the Washington Post reported on a massive class action anti-spam lawsuit filed in Virginia. The plaintiffs' law firm which filed the complaint [PDF] represents 20,000 "Internet users in more than 100 countries". The lead attorney, Jon Praed, is said to have represented America Online and Verizon Online in successful cases against junk emailers.
5. Is your company or organisation exposed, even though you don't spam?
Various laws apply to virtually all businesses and organisations that use electronic messages.
Certainly dedicated spammers are the most affected given their email and SMS spam.
However, the law can hold liable businesses which fail to review or monitor their systems and service providers for legal compliance with various marketing laws. No business function is more regulated than marketing. If you disagree I'd like to hear from you.
Marketing laws have their impact whether you work for profit or not-for-profit.
The laws certainly ban spam but the scope of marketing law extends well beyond to regulate:
blogs and other Websites,
messages sent to mobile phones,
emails and communications on online forums and message boards,
radio, television, newspapers, magazines, newsletters and other traditional media,
and all other marketing messages and communications, off line or online.
Briefly, included in the category of "marketing law" in Australia there are - the Trade Practices Act 1974 (Cth), Copyright Act 1968 (Cth), Trade Marks Act 1995 (Cth), confidential information law, passing off law, Do Not Call Register Act 2006 (Cth), Privacy Act 1988 (Cth), defamation law, Summary Offences Act 1988 (NSW), and the Racial Discrimination Act 1975 (Cth).
6. A practical step for compliance
Send me an email (Email Noric Dilanchian) or call for a conversation on (02) 9269 0229. We can usually help in a number of ways, including supply of a:
short guide on Best Practice for Direct Marketing via Email or SMS; and
Marketing Legal Audit Checklist for use in staff training or checking copy.