Agency Tongue pays out over spam texts for Coca Cola

“Ideas agency” Tongue, which recently rebranded from Ikon spin-off New Dialogue, has been forced to pay $22,000 to the communications regulator and make a legally enforceable undertaking about its future conduct after arranging for spam mobile messages to be sent on behalf of client Coca Cola.  

According to the Australian Communications and Media Authority, Coca Cola South Pacific has been issued with a formal warning over the breach, Vodafone Hutchinson Australia has paid $110,000 and Big Mobile, which provided the software platform to send the texts, will have to pay 25c compensation to each consumer who was spammed with messages that had no means of unsubscribing or contact information about the sender.

ACMA said the outcome came “after investigating alleged breaches of the Spam Act 2003 arising from a marketing campaign that promoted certain Coca-Cola products through SMS””

The campaign took place last year, with New Dialogue aranging for 100,000 SMSs to be sent on behalf of Coca Cola from a database it obtained from elsewhere. According to the settlement, the agency will have to put staff through spam training and give ACMA three-monthly updates on how that is going. It will also have to prove it has made reasonable efforts that when a database of mobile numbers is provided by a third party the users have opted in to receive commercial messages.

The undertaking was signed by Tongue’s managing partner Tim Sexton. Sexton did not return messages left by Mumbrella, and Tongue’s switchboard was unable to reach another senior member of staff.

VHA’s undertaking was signed by CEO Nigel Dews. The breaches involved both 3 and Vodafone – which have since been through a merger. In a statement, Vodafone said: “VHA is committed to complying with the Spam Act, and to working with ACMA to ensure its customers are protected. Mobile advertising is an exciting new platform and VHA looks forward to continuing to work with our advertisers, to realise the potential of this emerging medium.”

As part of the settlement, VHA has appointed an independent auditor to ensure customers are not spammed in the future. ACMA chairman Chris Chapman said:

“The ACMA considers that well resourced companies should be compliance leaders. There is no excuse for them to fall short in their obligations under the Spam Act for SMS marketing campaigns. VHA, New Dialogue and Big Mobile are businesses which by their very nature are heavily involved in SMS marketing campaigns. The ACMA nonetheless notes their commitment to the process of achieving compliance with the requirements of the Spam Act. I would keenly hope that their actions and responses provide a sobering reminder to all of the players in the SMS marketing industry about the importance of compliance.”

Mobile marketing firm Big Mobile’s commercial director Graham Christie, who signed the undertaking, was overseas and unavailable to comment.

Meanwhile, Coca Cola issued a statement saying that it had successfully argued to ACMA that it had not breached the Spam Act. It said:

“The sending of the messages was under Vodafone’s control and Vodafone have agreed to enforceable undertakings, which includes a financial component. Although Coca-Cola provided materials for the message, it provided senior legal opinion to ACMA it was not in breach of the Act. Coca-Cola has received a warning letter from ACMA but was not fined nor undertakings given.”


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