Kogan has been slapped with a AU$310,800 fine following an Australian Communications and Media Authority (ACMA) investigation that found the online retailer breached Australian spam laws.
The ACMA investigation uncovered that Kogan sent more than 42 million marketing emails to consumers between 13 December and 15 December 2019 from which they could not easily unsubscribe. Instead, customers were required to set up a password and login into their Kogan account to unsubscribe.
Under the Australian Spam Act, commercial electronic messages are required to contain a functional unsubscribe facility.
“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.
“Businesses must comply with the unsubscribe requirements in the spam rules. This investigation makes clear that businesses can’t force customers to set a password and login to unsubscribe from receiving commercial messages.”
O’Loughlin noted that the ACMA sent Kogan “multiple compliance alerts” prior to commencing the investigation.
“ACMA alerts put businesses on notice — address consumer concerns or we will investigate you under the law, as we have done here. That said, we acknowledge that Kogan fully cooperated with the ACMA in our investigation and took actions to update their unsubscribe facilities prior to its completion,” she said.
In addition to paying the infringement notice, Kogan has also agreed to a three-year court-enforceable undertaking, which covers Kogan Australia Pty Ltd and all of the company’s trading names, including Kogan and Dick Smith Brands.
The undertaking includes appointing an independent consultant to review its systems, processes, and procedures, producing a recommendation report within six months of the appointment, and implementing any recommendations from the review.
It also requires Kogan to both train staff responsible for sending marketing messages and report back every 12 months to the ACMA on actions it has taken in relation to consumer complaints.
“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.
Just last month, Kogan was ordered by Australian Federal Court to pay AU$350,000 for misleading consumers by inflating the prices of products and then promoting “discounts” for these products.
Issues around the retailer’s practices were first raised by the Australian Competition and Consumer Commission (ACCC) in May 2019. At the time, the ACCC alleged that Kogan ran an online promotion where consumers could obtain a 10% discount on most of its products through the use of a discount code between 27 and 30 June 2018.
