This article provides a high-level summary of the following under the Spam Act 2003 (Cth) (Spam Act):
- the general rule regarding unsolicited emails; and
- the main exception to the general rule.
The general rule under the Spam Act – 'commercial electronic messages'
The general rule is that a business cannot send unsolicited emails to market, sell, and promote their goods and services.
The Spam Act applies to 'commercial electronic messages'. While the Spam Act sets out a particular definition of that term in section 6, it is safe to say that that definition is extremely broad and is intended to cover both direct and obvious marketing and advertising, but also inferred or soft sell messaging.
If the email does constitute a commercial electronic message, then consent, either express or inferred, is required prior to sending. Express consent may include the recipient opting in to receive your emails such as by ticking a tick box. Consent may be inferred if the recipient has for example, knowingly and directly provided their contact information to you. The key point is:
It must be reasonable to believe that the recipient would expect to receive the commercial electronic message.
Penalties for breach
There are numerous cases of parties prosecuted for breaching their obligations under the Spam Act. The maximum penalty the Federal Court can issue companies for not complying with the Spam Act is $660,000 per day where a company does not have a prior record of contravening the Spam Act. The maximum court penalty increases to $3.3 million per day for companies with a prior record.
Individuals without a prior record are liable to pay penalties of up to $132,000 per day and up to $660,000 per day if they do have a prior record.
The Commonwealth Bank of Australia was fined over $7.5 million in August 2024 for sending over 170 million marketing emails that breached the Spam Act. 34.8 million of these messages were sent to people who had either not consented or had withdrawn their consent to receive these messages. Companies including the likes of Telstra, Pizza Hut, Ticketek, DoorDash and Kmart have also been liable and subject to significant penalties for sending spam without consent.
Exception to the general rule – 'designated commercial electronic messages'
The Spam Act allows designated commercial electronic messages to be sent which do not require consent from the recipient.
The fundamental element of a designated commercial electronic message is that it must consist of no more than factual information with certain specified additional information. The following are examples of messages which would consist of no more than factual information with certain specified additional information:
- an electronic message from a private law firm which includes an information sheet outlining the effects of a particular court decision. Although the message could be seen to be commercial in nature as it is designed in some way to promote the interests of the private law firm, the primary intent of the message is to provide factual information;
- an electronic version of a neighbourhood watch newsletter which is sponsored by the local newsagent;
- an electronic newsletter from the local chamber of commerce which is sponsored by one of their members; or
- an e-mail message promoting a birdwatching enthusiasts' website with a link to the website, where the website provides purely factual information relating to birdwatching but is sponsored by a commercial entity.
Circumstances in which the exception will not apply
Extreme care must be taken in relation to designated commercial electronic messages – even an inference of marketing or advertising will result in the exemption not applying.
The Spam Act and the Spam Regulations prescribe particular information that must be contained in a designated commercial electronic message including (amongst other things):
- Clearly and accurately identifying the individual or organisation who authorised the sending of the message.
- The information in the message is likely to be valid for at least 30 days after the message is sent.
Application of the unsubscribe rule
Designated commercial electronic messages are excepted from the unsubscribe rule and as such do not need to include an unsubscribe facility – however, we strongly recommend that an opt out or unsubscribe function be included in these communications. Customers expect that option, and to not provide it could lead to frustration and reputational damage.
Final comments
We do not recommend that you issue a designatedcommercial electronic message without obtaining express advice on its contents. The risk is material if there is any inference of marketing or advertising
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
