Record-high fine imposed on Smartguy for spam

The web store SmartGuy, which changed name to Stylepit earlier this year, has recently paid a fine of DKK 800,000 (more than USD 130,000) for having sent text messages and e-mails to a large number of persons without their consent, which is a violation of the spamming rules of the Danish Marketing Practices Act.

Under section 6 of the Marketing Practices Act, a trader must not send messages by electronic means, including e-mails and text messages, with a view to selling products, unless the party concerned has requested him to do so.

This means that separate consent must be obtained for the receipt of advertisements by e-mail and separate consent for text messages.

The Consumer Ombudsman reported SmartGuy to the police on the basis of a large number of complaints from consumers who had received advertisements without having requested them. It appeared that SmartGuy, in the period from 9 April 2013 – 19 December 2013 sent 231,293 text messages and 42 e-mails where neither of the recipients had consented to receiving electronic advertisements in the form in question.

A FINE OF DKK 800,000

Normally, the Consumer Ombudsman applies a calculation model for fines for violation of the spamming rules, which, in general, is DKK 100 per violation. In this case, however, a substantial discount was granted, reducing the fine to DKK 800,000. It was considered a mitigating circumstance that SmartGuy thought the company was entitled to send the text messages as the consumers had consented to receiving advertisements by e-mail.

Companies should thus be aware that consent to receiving advertisements and news letters by e-mail does not entitle them to send advertisements etc. in a text message.