Online electronics retailer Kogan has been slapped with a $310,800 infringement notice after it sent out more than 42 million marketing emails to consumers from which they could not easily unsubscribe.
The Australian Communications and Media Authority (ACMA), which conducted an investigation into the emails, found that Kogan required consumers to take additional steps setting a password and logging into a Kogan account in order to unsubscribe to the emails.
Ultimately, the communications and media regulator found that Kogan’s conduct breached the Spam Act, which requires commercial electronic messages to contain a functional unsubscribe facility.
In addition to the infringement notice, Kogan has agreed to a court-enforceable undertaking that requires the company 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.
The undertaking also requires Kogan to train staff responsible for sending marketing messages and to regularly report back to the ACMA on actions taken in relation to consumer complaints.
“Kogan’s breaches have affected millions of consumers. The ACMA received complaints from a number of recipients of Kogan’s email expressing their frustration and concern with Kogan’s practices,” ACMA chair Nerida O’Loughlin said.
While O'Loughlin stressed that Kogan fully cooperated with the ACMA in its investigation and took actions to update its unsubscribe facilities prior to its completion, the regulator sent the company multiple compliance alerts before commencing the investigation.
“This substantial infringement notice and a comprehensive three-year court-enforceable undertaking sends a message to Kogan and other businesses that the ACMA will take strong action for breaches of the spam rules,” O’Loughlin said.
The ACMA action comes just weeks after Kogan was fined $350,000 as a result of legal action by the Australian Competition and Consumer Commission (ACCC) in relation to a ‘sale’ by the company that saw hundreds of items cost the same as, or more than, their original price.
Kogan's 2018 tax time 10 per cent off ‘sale’ was found to have contravened Australian Consumer Law when it quickly raised product prices ahead of an impending sale, only to drop them afterwards.
As a result, the ACCC launched proceedings in Federal Court against Kogan, winning the case in July.
However, Justice Jennifer Davise declined to impose the $2 million penalty sought by the ACCC, calling it “excessive” and instead handed it the lesser $350,000 fine, plus costs.