SpamAct 2003: Prosecution

Spamming is regulated by the Spam Act 2003 (Cth) ("the Act"), as supported by the Spam Regulations 2004 (Cth). The Act came into operation on 10 April 2004. Apparently the term "spam" was taken from a Monty Python skit and applied to spam email by the ICT industry. The Australian ICT sector has had to adjust its procedures, policies and practices in the wake of this legislation. The Act covers email, instant messaging, SMS (mobile phone text messaging) and MMS (mobile phone graphic messaging) of a commercial nature. The Australian Communications and Media Authority (ACMA) launched the first prosecution under the Spam Act 2003 which was heard by the Federal Court of Australia in Perth on 13 April 2006. This case is Australian Communications and Media Authority v Clarity1 Pty Ltd & Mansfield [2006] FCA 410 ("Clarity1").

At the heart of the regulatory scheme embedded in the Act is the fact that it targets unsolicited commercial electronic messages: see Part 2 (sections 15 – 18). Section 16 of the Act provides that a person must not send, or cause to be sent, a commercial electronic message that has an "Australian link and which is not a designated commercial electronic message."

The Act contains four types of regulatory mechanisms to counter spamming. The first is what are termed "civil penalties" (Part 4, comprising sections 23 – 30). The second anti-spamming mechanism is an infringement notice system under Schedule 3 of the Act.

The third anti-spamming mechanism comprises machinery for court-issued injunctions under Part 5 (sections 31 – 36). The fourth anti-spamming mechanism is enforceable undertakings under Part 6 of the Act. In Australia, spammers cannot be jailed.

ACMA claimed that at least 213,443,382 instances of spam (of which 41,796,754 were successfully sent) to 5,664,939 unique electronic addresses had been sent by the company under the directorship of the second respondent, Mr Mansfield. After rejecting defences of non-commercial electronic messaging involving charities and charitable institutions, educational institutions and consent, the Federal Court found the claim for contravention of section 16 proved. The Federal Court also found claims of a contravention of the prohibition in section 22(1) of the Act against the use of address-harvesting software or a harvested-address list proved.

The Federal Court imposed direct liability for contraventions of the Act on the company itself. In the case of its director, Mr Mansfield, he was liable as an "accessory" because he was found to have "intentionally participated in and knew the essential elements of each aspect of Clarity1’s conduct".

The Court listed for a separate hearing the determination of the civil penalty for both the company and Mr Mansfield. Gadens Lawyers will report the outcome in a later addition of Corporate Update.

Clarity1 signals resolve on the part of the industry regulator (ACMA) to target an electronic disease of epidemic proportions. This case is of interest to the ICT sector because it interprets and applies the Spam Act 2003 in a sensible and straightforward way.

Participants in the ICT sector will need to ensure that their policies, protocols and practices adequately guard against spam dissemination and electronic address harvesting.

Participants in the ICT sector should also be aware of the intersection between the Spam Act 2003 and the Privacy Act 1988. Because of sections 13A and 16A of the Privacy Act 1988, many ICT participants must comply with and not breach any of the National Privacy Principles which are set out in Schedule 3 of the Privacy Act 1988 or any industry-wide approved privacy code.

For more information about the Spam Act 2003, e-commerce and e-commerce compliance, contact Michael Owens.

This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.