Woolies hit with AU$1 million spamming fine

July 02, 2020

The Australian Communications and Media Authority (ACMA) has hit Woolworths Group with a fine of AU$1,003,800, the largest it has handed down, due to five million breaches of the Spam Act 2003 made between October 2018 and July 2019.

The breaches consisted of continuing to send marketing emails after people had unsubscribed. ACMA said Woolies’ systems, processes, and practices were inadequate to comply with spam rules.

“The spam rules have been in place for seventeen years and Woolworths is a large and sophisticated organisation. The scale and prolonged nature of the non-compliance is inexcusable,” ACMA chair Nerida O’Loughlin said.

“Woolworths failed to act even after the ACMA had warned it of potential compliance issues after receiving consumer complaints.”

The million-dollar fine, which the company has already paid, is unlikely to make a dent on Woolies though, as for its third quarter, the group reported taking in almost AU$16.5 billion in sales and posted AU$1.45 billion in after-tax profit.

Nevertheless, O’Loughlin claimed the fine and a three-year court-enforceable undertaking were “commensurate to the nature of the conduct, number of consumers impacted and the lack of early and effective action by Woolworths”.

The undertaking will see Woolworths bring in an independent consultant to review its system, processes, and procedures, and report back to ACMA. As usual with these type of infringements, the company will undertake training for its staff.

“The ACMA’s actions should serve as a reminder to others not to disregard customers’ wishes when it comes to unsubscribing from marketing material,” O’Loughlin added.

Over the past year, Australian businesses have paid over AU$1.75 million in fines for breaching spam and telemarketing laws, with ACMA also stating it has accepted six undertakings and issued seven warnings. It also said repeat offenders could face fines of up to AU$2.22 million a day.

Last week, Woolworths announced that it would spend between AU$700 million and AU$780 million in technology and fitouts over the next four years as part of plans to build an automated regional and distribution centre and a semi-automated national distribution centre at Moorebank Logistics Park in Sydney.

As part of the build, the company has allocated AU$176 million for redundancies of workers at its Minchinbury, Yennora, and Mulgrave centres.

The company also said the cost of underpaying staff has now blown out to AU$390 million after it identified its salaried team members at ALH Hotels were not paid in full according to the general hospitality industry award during FY18 and FY19.

Last Friday, Woolworths said it was increasing online delivery and pick up availability as online interaction surged 40% across Melbourne. The same weekend, the supermarket reinstated purchase limits on toilet paper, hand sanitiser, paper towel, flour, sugar, pasta, mince, long-life milk, eggs, and rice across Victoria.

By Tuesday, Victorian Premier Daniel Andrews had enforced 10 postcode-based lockdowns across Melbourne for a period of four weeks.