In-House Memo (Factual Information)
In 2012, McDonald’s fell foul of the Spam Act 2003 (Cth). Although the Act’s provisions can be difficult to interpret, business communication alone is not SPAM.
The Spam Act 2003 (Cth) (‘the Act’) regulates what are called ‘commercial electronic messages’, in order to prevent irritating and unsolicited advertising or promotions. It excludes voice call messages.
What is covered?
The term ‘commercial electronic messages’ has a precise and particular definition. In summary it is an electronic message to:
- offer to supply goods or services; or
- advertise or promote goods or services; or
- offer, provide, advertise or promote a (prospective) provider of, a business or investment opportunity; or
- assist or enable a person, by a deception, to dishonestly obtain property, or financial advantage belonging to another person.
Neither of the key terms ‘advertise’ or ‘promote’ are defined in the Act. A search of relevant case law indicates these terms have not been considered with respect to the Act.
Oxford Dictionary definitions are:
- advertise: To give notice of (something); to make generally known;
- promote: To publicize or advertise (a product, organisation, venture, etc.) so as to increase sales or public awareness.
ACMA relies on the Macquarie definition of promote as:
- “to further the growth, development, progress, etc. of; encourage”.
A number of High Court cases, decided before the Act and concerning other legislation, gave consideration to the nature and definition of an “advertisement”. These decisions state that that:
“Material which is designed or calculated to draw public attention to a product or to promote its use may constitute an advertisement”
“The word “advertisement” … would seem to be used in a broad general sense which would encompass any broadcast or telecast of material “designed or calculated to draw public attention” to something (165)”.
In 1995, the US Supreme Court considered in some detail the meaning of the term “promote” and stated that:
“The term ” promotes ” as used here would comprehend any writing advocating a … position that rests upon a belief …. See Webster’s Third New International Dictionary 1815 (1961) (defining ” promote ” as “to contribute to the growth, enlargement, or prosperity of: further, encourage”)”.
How to comply?
Where an electronic message does fall within the definition of a ‘commercial electronic message’, the Act prohibits the sending of any ‘unsolicited commercial electronic message’. Non-compliance can attract the attention of the Australian Communications and Media Authority (ACMA) as well as negative publicity, prosecution, substantial fines and enforceable undertakings.
The Act has two main requirements: unsubscribe facility and recipient consent and (ss 18 & 16). Consent can be either express, or a consent which is reasonably inferred from conduct and business relationships. Exemptions also exist where the message consists of no more than factual information.
The term ‘unsubscribe facility’ is not defined in the Act. However the Act specifies that an unsubscribe facility must take the form of:
“a statement to the effect that the recipient may use an electronic address set out in the message to send an unsubscribe message to the individual or organisation who authorised the sending of the first-mentioned message”.
Given that consent is a core element, many cases have turned on this. In ACMA v Clarity1, consent was not obtained and address-harvesting software was used to send unsolicited and designated commercial electronic messages. The Federal Court found that the ‘silence’ or non-response to such a message by the email recipients did not establish consent.
In ACMA v Mobilegate, unsolicited SMS messages were sent to mobile phone users. Their effect was to create the belief that recipients could correspond with individuals seeking to meet them and form relationships with them via dating websites. These messages were held by the Federal Court to breach the Act. The Court, warned that:
‘penalties must be of such an order that having regard to particular gains which might be involved, it is in effect commercial suicide to seek those gains via contraventions of the [Act]’.
In ACMA v JER Pty Ltd, promotional material about a nightclub was sent by a promoter via text message without prior consent of the recipients. This was found to breach the Act.
‘Send-to-friend’ email product promotions also risk contravening the Act. In 2012, McDonald’s breached the Act through one of its ‘send-to-friend’ promotions. The company was issued a warning by the Australian Communications and Media Authority (ACMA).
ACMA states that:
“consent may also be inferred when someone conspicuously publishes their work-related electronic address (for example, on a website, brochure or magazine); and your business wants to send them a commercial electronic message that relates directly to that person’s line of work. However, if that publication includes a statement that the person does not want to receive unsolicited commercial electronic messages at that address, you can not infer consent.”
A ‘designated commercial electronic message’ is exempt from the prohibitions above. This term is defined as a lawful commercial electronic message:
“that consists of no more than factual information (with or without directly-related comment)”
The Marketing Association of Australia and New Zealand has published information provided by ACMA including examples of purely factual messages. These examples include:
- “an electronic message from a private law firm that only outlines the effects of a particular court decision”;
- “an electronic version of a neighbourhood watch newsletter that is sponsored by a local business establishment”.
A ‘designated commercial electronic message’ must still contain:
- the name, logo and contact details of the individual or organisation who authorised the sending of the message;
- the name and contact details of the author;
- if the author is an employee – the name, logo and contact details of the author’s employer;
- if the author is a partner in a partnership – the name, logo and contact details of the partnership;
- if the author is a director or officer of an organisation – the name, logo and contact details of the organisation;
- if the message is sponsored – the name, logo and contact details of the sponsor;
- information required to be included by section 17;
- information that would have been required to be included buy section 18 if that section had applied to the message.
Some particular institutions are authorised, in certain circumstances, to send unsolicited commercial electronic messages. These include government, registered political parties, registered charities and educational institutions. Such a message may only be sent if it is ‘designated’, i.e. consists only of factual information, and if it relates to goods or services supplied by the authorised body.
To assist your business, there are three key checks to apply:
- Is your message a ‘commercial electronic message’? Does it offer to supply, advertise or promote the supply of goods or services, schemes or opportunities.
- Is an unsubscribe function included?
- Does the message consist of no more than factual information?
- Is there actual or inferred consent by recipient?
 A summary of section 6, the Act
 Australian Communications and Media Authority, 2013, ‘Investigation Report No.3064’, ACMA2013/936, p4
 Director of Public Prosecutions v United Telecasters Sydney Ltd (“Cigarette Advertising case”)  HCA 5, Brennan, Dawson and Gaudron JJ at 
 Australian Capital Television Pty Ltd & New South Wales v Commonwealth  HCA 45, Dean and Toohey JJ at 
 Rosenberger v Rector and Visitors of Univ of Va  USSC 81, Kennedy J at 
 Section 16, the Act; ‘unsolicited’ is not defined in the Act. Note: ‘unsolicited contact’ is defined in the National Consumer Credit Protection Regulations 2010 (Reg. 3(1)) as the first contact, contact with a consumer who did not provide their contact details, or subsequent contact on or after 3 months of being provided contact details, made by the person (or by an associate of that person) from a non-standard business premises in relation to the supply of goods and services..
 Section 16, the Act.
 Section 18(1)(c)(i), the Act.
 Australian Communications and Media Authority v Clarity1 Pty Ltd  FCA 410.
 Australian Communications and Media Authority v Mobilegate Ltd (No 4) (2009) 261 ALR 326.
 Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 4)  FCA 1225 at  per Logan J.
 Australian Communications and Media Authority v JER Pty Ltd  FCA 1198 at -.
 Michael Pattinson & Monique Donato (2013), ‘Using customers as marketing intermediaries: the legal risks of indirect messaging and third-party Facebook posts’ 65(2) Keeping Good Companies, 114.
 See: http://www.acma.gov.au/webwr/_assets/main/lib310037/fs161-spam_act-understanding_consent.pdf, accessed online 30/01/14
 Cl.2(1)(a), Schedule 1, the Act.
 The Marketing Association of Australia and New Zealand, no date, ‘Dealing with Spam’, information provided by the Australian Government Australian Communication Authority, http://www.marketing.org.au/images/cimages/spaminformation.pdf, accessed online 30/01/14, p15
 Section 17, the Act. ‘Commercial electronic messages must include accurate sender information’
 Section 18, the Act. ‘Commercial electronic messages must contain a functional unsubscribe facility’
 Cl. 2(a), Schedule 1, the Act.
 Cl.4, Schedule 1, the Act.
 Cl.2, Schedule 1, the Act.
 Cl.4, Schedule 1, the Act.