Campaign fizzer: Vodafone Australia cops $110K fine for Coke SMS ad

Vodafone Hutchison Australia has agreed to make a $110,000 payment to the media regulator after it sent out 100,000 text messages as part of a marketing campaign for Coca-Cola that might have breached anti-spam laws.But the Coke offshoot that launched the campaign, Coca-Cola Asia Pacific, has been spared any penalty for the two batches of 50,000 text messages that went out on October 2 and 9 last year. It got away with only a formal warning. see:ACMA accepts undertakings after Spam Act investigation into Coca-Cola SMS marketing [news release]
The Australian Communications and Media Authority has accepted enforceable undertakings from three companies — Vodafone Hutchison Australia Pty Limited (VHA), New Dialogue Pty Ltd (New Dialogue), Big Mobile Pty Ltd (Big Mobile) — and issued a formal warning to Coca-Cola South Pacific Pty Ltd (CCSP) after investigating alleged breaches of the Spam Act 2003 arising from a marketing campaign that promoted certain Coca-Cola products through SMS.’The ACMA considers that well resourced companies should be compliance leaders,’ said Chris Chapman, Chairman of the ACMA. ‘There is no excuse for them to fall short in their obligations under the Spam Act for SMS marketing campaigns.’The ACMA has accepted an enforceable undertaking from VHA, which includes a financial component of $110,000. The undertaking was offered by VHA in response to three ACMA investigations into alleged breaches of the Spam Act (including the Coca-Cola marketing campaign). VHA has undertaken to appoint an independent auditor to monitor Spam Act compliance and to make recommendations to improve Spam Act compliance, to be implemented by VHA. VHA has also undertaken to provide Spam Act training for all employees.The ACMA has also accepted enforceable undertakings from media agency New Dialogue and content aggregator Big Mobile in relation to the Coca-Cola marketing campaign. In accordance with its enforceable undertaking, New Dialogue has paid an amount of $22,000. Big Mobile has undertaken to pay compensation to each recipient of any SMS message that breaches the Spam Act during the term of the enforceable undertaking (12 months).’VHA, New Dialogue and Big Mobile are businesses which by their very nature are heavily involved in SMS marketing campaigns. The ACMA nonetheless notes their commitment to the process of achieving compliance with the requirements of the Spam Act. I would keenly hope that their actions and responses provide a sobering reminder to all of the players in the SMS marketing industry about the importance of compliance.’Also as a result of the ACMA’s findings, a formal warning has been issued to CCSP for causing commercial electronic messages to be sent without an unsubscribe facility and not providing contact information, as required under the Spam Act.The enforceable undertakings provided by VHA, New Dialogue and Big Mobile are available on the ACMA’s website. Complaints about spam can be made by calling the ACMA on 1300 855 180 or at Spam Act 2003 (Spam Act) regulates unsolicited commercial electronic messages in Australia. Commercial electronic messages can be emails, SMS messages, MMS messages, instant messaging messages or any other similar messages.The Spam Act sets out that commercial electronic messages must generally have the following features:

  • consent – it must be sent with the recipient’s consent. The recipient may give express consent, or consent may be inferred from their conduct and ‘existing business or other relationships’;
  • identify – it must contain clear and accurate information about the person or organisation that authorised the sending of the message; and
  • unsubscribe – it must contain a functional ‘unsubscribe’ facility to allow the recipient to opt out from receiving message from that source in the future.

The penalty provisions of the Spam Act came into force in 2004. At that time Australia was tenth in the ranking of spam-relaying countries for email spam, according to the Sophos list. For the 2008 calendar year, Australia had fallen to 32nd.On 2 October 2008, 50,000 SMS messages promoting certain Coca-Cola products were sent.It was the ACMA’s opinion that the messages did not contain information about how a recipient could unsubscribe from receiving further messages, or contain information about how the recipient could contact CCSP, the authorising organisation.The message read:
‘Take a hint from your PC and reboot. You’ll work faster. Reclaim your lunch hour with a friend. Escape with a Coca-Cola lunch break.’On 9 October 2008, a further 50,000 SMS were sent containing the same message text.Compliance and EnforcementThe Spam Act provides a range of enforcement options and the ACMA determines an appropriate action on a case-by-case basis. Formal warnings are used by the ACMA to indicate concerns about alleged 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 provide the opportunity for a business or individual to formalise its commitment to compliance with the Spam Act.The ACMA may also give an infringement notice in relation to particular civil penalty provisions. In addition, the ACMA can lodge proceedings in the Federal Court, including seeking an injunction. The legislation sets out penalties of up to $1.1 million a day for repeat corporate offenders.

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