ACMA slams Groupon Australia with formal warning for violating the Spam Act

Group buying giant Groupon has been slammed by the Australian communications watchdog, which has issued a formal warning to the company regarding its daily email newsletters – and the ability to unsubscribe.

The warning comes during a bad time for Groupon. The company recently ditched chief executive Andrew Mason, and has been attempting to boost profitability. In the past year, its share value has plummeted by 70%.

Groupon Australia was contacted this morning, but a reply was not available prior to publication.

In a statement, the Australian Communications and Media Authority said it had issued a formal warning to the company, after hearing complaints users who attempted to unsubscribe from the newsletters were only unsubscribed from one particular letter, and not others.

A formal warning puts a company, or person, on notice that ACMA has identified “issues of concern”. The warning also means stronger action can be taken if nothing is done to solve the problem.

ACMA said it was unclear what Groupon users were actually unsubscribing from, which is in breach of the SPAM act.

“In the ACMA’s view, it was reasonable for individuals to expect they would be unsubscribed from all newsletters unless they were advised otherwise.”

“The ACMA also found that some unsubscribe requests made to Groupon were not actioned within the five business days required by the Spam Act.”

However, ACMA also said Groupon has made the wording clearer on its website and in emails about subscriptions, and also introduced a new system so users could choose which email newsletters they want to have sent.

Michelle Gamble, the chief executive of Marketing Angels, says it’s becoming increasingly difficult for businesses to get away with this type of behavior.

“I’ve dealt with a client, a small telco, which had a decent amount of customers and no unsubscribe functionality,” she says.

“Consumers are very aware, even if companies aren’t, and they know the standard expectation is that you should be able to unsubscribe.”

Sam Yip, senior research and consulting manager for Telsyte, told SmartCompany while the amount of emails in the complaint was relatively small, he said “it’s not in the interests of group buying sites to spam customers…this isn’t 2010 anymore”.

Groupon isn’t the only large company to have been caught in ACMA’s sights. Late last year, McDonald’s Australia was issued a warning over a violation of the Act.

This story first appeared on SmartCompany.