$100,000 penalty for spamming

The High Court has recently considered the Unsolicited Electronic Messages Act 2007 for the first time, and ordered a spammer to pay $100,000.

The Act prohibits the sending of junk e-mail or spam. It creates civil liability for sending unsolicited emails or harvesting email addresses and is enforced by the Department of Internal Affairs. The Act provides penalties of up to $200,000 for individuals, and up to $500,000 for organisations (which includes companies, partnerships and unincorporated associations).

In Chief Executive, Department of Internal Affairs v Atkinson (High Court, Christchurch, 19 December 2008) Justice French considered the penalty to be imposed on the second defendant, who had agreed to provide assistance to the Department with a view to resolving the matter. The case is continuing against the first and third defendants, who have contested the allegations that they breached the Act.

The court heard an agreed statement of facts, and described the operation as being a large-scale commercial spamming operation which was "one of the largest in the history of the internet". In the circumstances, Justice French held that the starting point for the penalty should be $200,000 to ensure the deterrent effect of a penalty. Atkinson was, however, entitled to a substantial discount on that figure because:

  • it was not illegal to send spam when the activity began (although the activity continued after the legislation came into force); and
  • Atkinson had cooperated and provided an undertaking in relation to future compliance with the Act (which is enforceable under section 34 of the Act).

The court therefore ordered Atkinson to pay $100,000.

The decision shows that the courts are prepared to enforce the legislation. It will be interesting to see what penalties are awarded against the other defendants if they are found to have breached the Act.