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Business, regulations, promotion and marketing – The $2 million ‘spam’ fine for DoorDash

Business, regulations, promotion and marketing – The $2 million ‘spam’ fine for DoorDash

Published on August 28, 2023 by Dianne RetiefDianne Retief

It has recently emerged that food delivery service platform DoorDash has been fined $2 million for contravening the spam rules by the regulator, the Australian Communications and Media Authority (“ACMA”).

In a statement, ACMA said its investigation found:

“that between February and October 2022, DoorDash sent more than 566,000 promotional emails to customers who had unsubscribed from these messages and sent more than 515,000 texts without an unsubscribe facility to prospective drivers”.

DoorDash has its headquarters based in the US, and it operates in all states and territories in Australia servicing some 30,000 local businesses and reaching out to over 80 percent of the Australian population. It offers delivery gig jobs for drivers for the delivery of takeaways from restaurants. This article explains how DoorDash got penalised by the Australian Communications and Media Authority for breaching their spam rules.

What are the Spam Rules?

The Spam Act 2003, Cth (“Spam Act”) and the Spam Regulations sets out your responsibilities under Australian law.

A Simplified outline of the Spam Act is as follows:

1. This Act sets up a scheme for regulating commercial email and other types of commercial electronic messages (such as text messages);

2. Unsolicited commercial electronic messages must not be sent;

3. Commercial electronic messages must include information about the individual or organisation who authorised the sending of the message;

4. Commercial electronic messages must contain a functional unsubscribe facility;

5. Address – harvesting software must not be supplied, acquired or used;

6. An electronic address list produced using address-harvesting software must not be supplied, acquired or used.

The main remedies for breach of this Act are civil penalties and injunctions, which in the case of DoorDash included an infringement notice of $2,011,320.

How to comply with the Spam Act?

1. You must have consent from the recipient prior to any message being sent. Consent does not have to be express;

2. Identify yourself (your business) as the sender;

3. Take care when you buy or use a marketing list (you are still responsible to obtain consent for any addresses you use);

4. Make it easy to unsubscribe

Why did DoorDash get penalised?

“An investigation by the Australian Communications and Media Authority (ACMA) found that the company sent more than 566,000 promotional emails to customers between February and October 2022, as well as more than 515,000 texts without an unsubscribe facility to prospective drivers” [1].

DoorDash claimed that the content of the communication it had sent to prospective customers and business opportunities to drivers was factual, and therefore it had not contravened the spam law. While that may true, however if the communication contains any offers or incentives that may entice a customer to subscribe, or drivers to take up opportunities to become contractors for DoorDash, then such communication does not comply with the spam rules.

“ACMA found DoorDash had mischaracterised them (texts/messages sic) as being “solely factual” and outside the spam rules, but they actually included commercial aspects such as offers and incentives” [2]

Electronic communication messages that are sent to customers must have a functional unsubscribe facility, meaning that if the recipient does not want to receive communication from the sender, the recipient can click on a link to unsubscribe, so they are no longer in receipt of any promotional material from the sender. ACMA chair Nerida O’Loughlin said:

“Australians find it incredibly frustrating when they receive marketing messages from businesses like DoorDash after they have taken the time to unsubscribe” [2]

ACMA found that prospective customers that had unsubscribed were still receiving marketing messages from DoorDash.

While every business wants to capture an audience with its marketing tools, the strict laws about Spam in Australia must be complied with to avoid being issued with penalties by ACMA.

According to ACMA, the regulator has in the last 18 months issued fines to businesses operating in Australia totaling in excess of $10 million, as penalties for breaching spam and telemarketing laws. Nerida O’Loughlin stated that:

“DoorDash is a large business conducting high-volume marketing so there is no excuse for non-compliance”. This is a further warning to all businesses that engage in email and SMS marketing that now is the time to review your spam compliance ” [2]

If you already operating a business or propose to start a new business, it is important to make sure the marketing of your business product/services complies with Australian legislation.

At Carroll & O’Dea Lawyers, our team of experts can help you with this, so that your business is spam compliant and does not get penalised by ACMA. Please contact Carroll & O’Dea Lawyers via our Contact Page or call us on 1800 059 278.



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