Oxygen8 Communications signs stupid enforceable undertaking

ACMA has accepted an enforceable undertaking from Oxygen8 Communications, following Spam Act complaints that SMS commercial electronic messages were sent by content providers using Oxygen8’s platform.

Reading ACMA’s media release, we can see how Oxygen8 was at risk of action if it didn’t offer ACMA an undertaking – effectively the same as submitting to court injunctions.

But will somebody please explain why Oxygen8 agreed to some crazy promises ?

Injunctions should be precise

For practical purposes, an undertaking to ACMA or the ACCC should be treated as being subject to a court injunction.  When lawyers are advising a client on what to agree to, they should closely model their advice on the ways that injunctions are crafted.

One key rule is that they should be precise.  An injunction ought not say ‘Jack must be a good lad’ or even ‘Jack must drive his car lawfully’.  Too loose and broad is either (a) too onerous for the injuncted party or (b) unlikely to be enforced by a court.

And what has Oxygen8 agreed to ?

Remember, this arises from alleged involvement in Spam Act breaches.  Some halfwit has let the company agree, under pain of heavy penalty:

The Company undertakes to do, and to cause its employees and agents to do, the following:

Zounds!!!  That’s over 140 pages of Code and explanatory material.  There’s probably not a CSP in the country that’s 100% compliant, and even allowing that large parts of it won’t relate to Oxygen8’s activities, it’s a dreadful outcome to make so broad a promise.

Remember, the undertaking includes ‘to cause … its agents … to comply’.  How hard could that be ?  The best thing Oxygen8 has going for it is that the undertaking is so harsh a court might try hard to avoid enforcing parts of it.

If this was a court injunction, the judge would have a lot of questions as to why any mention of the TCP Code was appropriate in a Spam Act case.

It’s not the only instance

As if to prove that the reference to the TCP Code wasn’t a one-off moment of madness, the undertaking also commits to compliance with the Australian Standard for complaints handling.

If you ever read an Australian Standard, you’ll find they can be very broad and general.  That’s bad for a court injunction or enforceable undertaking.  It may seem like more work to draft an undertaking that states the precise steps to be taken, but when you come to comply it saves time, money and uncertainty.

The lesson

If you’re ever about to sign an enforceable undertaking to ACMA, you have already paid a hurtful amount in legal fees.  But for heaven’s sake, don’t just cave in and sign anything to put an end to it all.  Signing an unnecessarily broad undertaking is buying trouble and future expense.

December 23, 2008 | Filed in How not to do it, Spam Act 

Comments

2 Responses to “Oxygen8 Communications signs stupid enforceable undertaking”

  1. Piquet on December 24th, 2008 12:54 am

    OK, I’ll bite and have a go at explaining why Oxygen8 “agreed to some crazy promises ?”

    Whilst I can’t speak for ACMA or Oxygen8, my take on this is that “voluntary” undertakings (and I use the term “voluntary” loosely – most undertakings are drafted by Regulators) are seen as the soft option. Sure, some businesses quake in their boots at the mere idea of giving an undertaking to a regulator, but the reality is that anything that gets the Regulator off your back without having to pay a hefty fine or risk contempt of court is a good start.

    Then comes consideration of the requirements of the undertaking and the reality of the undertaking actually being enforced.

    In this regard, the Oxygen8 undertaking does not include a key element that the undisputed “king of undertakings” – the ACCC – would have included. I’m referring to a requirement to provide the Regulator with annual independent auditor reports that the terms of the undertaking have been complied with. The only audit required of Oxygen8 is to do with commercial electronic messages “sent using the company’s shortcodes”; albeit on a quarterly basis.

    In fact, even this “audit” doesn’t have to be certified or verified independently. Oxygen8 does it all itself.

    So, in answer to your question “But will somebody please explain why Oxygen8 agreed to some crazy promises ?” I suspect “because 1. it was easier to agree than to spend valuable time getting it changed and 2. there is little perceived risk in ACMA actually checking up on compliance with the Code or the Australian Standard”.

  2. Peter Moon on December 26th, 2008 1:27 pm

    Thanks for the analysis, Piquet.

    You must be right, of course, that Oxygen8 wanted to wrap the matter up fast. But I still argue that the company may be paying a high hidden price for doing that.

    I suspect that ACMA would have deleted the TCP Code reference for the asking. It was a real ‘try on’ to include it, and they were probably as surprised as anyone when Oxygen8 said ‘OK’ to it.

    As for lack of compliance checking, the company has put itself in a position where any member of the public, or a competitor, can scream the walls down if they allege Code non-compliance. It isn’t a pretty position to put yourself in.

    But again, you’re right. Most unfortunate undertaking elements we see are probably explicable as you suggest: ‘Let’s just sign and get this over.’

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