Clarity1 has become the first company to be successfully prosecuted under the 2003 Spam Act after the Perth Federal Court ruled in favour of the Australian Communications and Media Authority (ACMA).
Since the Spam Act came into effect in April 2004, ACMA has received over 4000 formal complaints through its website. The regulator has issued warnings to 600 companies as a result of the complaints.
The actions of Clarity1 and its managing director, Wayne Mansfield, came under ACMA scrutiny after being listed on spamhaus.org's top 200 spammers list.
Justice Robert Nicholson last week found Clarity1 to have illegally sent more than 56 million spam messages to email addresses around the world during the twelve months since the Act was introduced in April 2004.
In his defence, Mansfield maintained that his company's actions did not fall under the Spam Act because the incidences of spam were in place before the Act came into effect.
"The fact that address-harvesting may have occurred at a time when no such prohibition was in the law, does not prevent the application of the provision in its term from the date it came into force," Justice Nicholson ruled.
ACMA media manager Donald Robertson said the ruling was an important test case and a good indicator for the workability of the Spam Act.
He said ACMA meticulously compiled the case against Clarity1 and tried to make it as watertight as possible to set a firm precedent for future cases.
ACMA chairman, Chris Chapman said the ruling gave a "strong indication to Australian spammers that their activities will be vigorously pursued by ACMA."
ACMA has until May 19 to submit penalty recommendations to the Federal Court that will then be handed down to Mansfield at a later date.