The Australian Communications and Media Authority (ACMA) has handed Kogan a $310,800 for being in breach of Australian spam laws.
Kogan breaches Australian spam laws
According to its infringement notice, ACMA began investigating the online retailer in March 2020 regarding its compliance with the Spam Act.
It found that between December 15 and 19 2o19 marketing emails sent by Kogan didn’t contain a functional unsubscribe button unless the recipient created a Kogan account.
“There are reasonable grounds to believe that Kogan contravened subsection 18(1) of the Spam Act, between 13 December and 15 December 2019, in relation to commercial electronic messages it sent, or caused to be sent, to recipients who had not set a password with Kogan,” the infringement notice reads.
“This meant these recipients could not unsubscribe unless they took additional action to register an account with Kogan, set a password and login to the Kogan account.”
Kogan reportedly sent a total of 42 million marketing emails that were difficult to unsubscribe from. The company has agreed to the court-enforceable undertaking, which includes independent review and recommendations for Kogan’s email marketing practices.
“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 to Mumbrella.
“Businesses must comply with the unsubscribe requirements in the spam rules.”
According to Kogan, forcing recipients to create an account before they could unsubscribe was for their own security.
“During the period, if you received an email from us, to protect your security you needed to login to your Kogan.com account before unsubscribing. This was to ensure that only an authorised account holder could make changes that impacted their account,” a statement from Kogan reads.
“The additional security step we implemented is very common among leading global technology companies.”
We’ve resolved a ACMA notice about a technicality with our unsubscribe function from one week in 2019.We did this so we can focus our time & resources on what we care most about: making the most in-demand products & services more affordable and accessible https://t.co/BTwo5pJZ3Q
— Ruslan Kogan (@ruslankogan) January 19, 2021
Founder and CEO of the company, Ruslan Kogan, said on Twitter that the matter was resolved, focusing on the period of time ACMA investigated.
“We’ve resolved a ACMA notice about a technicality with our unsubscribe function from one week in 2019.We did this so we can focus our time & resources on what we care most about: making the most in-demand products & services more affordable and accessible,” Kogan said.
Yet another fine
This certainly isn’t Kogan’s first consumer-related fine. Back in December the Australian Competition and Consumer Commission (ACCC) found Kogan guilty of creating fake discounts during a Tax Time promotion in 2018.
Kogan raised the prices of 621 products before including them as part of a 10 per cent ‘discount’ offer. The Australian Federal Court found that 10 million emails and 930,000 texts sent to customers offering the false promotion were misleading.
Some of the emails included calls to action such as ’48 hours left!’ and ‘End midnight tonight!’.
Kogan was given a $350,000 fine for this breach of Australian consumer law. It was the third time Kogan had been fined for misleading advertisements.