Government increases penalties for failure to comply with Privacy Act and Spam Act

As of 1 July 2017, penalty units under Commonwealth law increased from $180 per unit to $210 per unit.  This effectively means that fines have increased for failure to comply with the Privacy Act, Spam Act, the Do Not Call Register Act and the Australian Consumer Law.

What are ‘penalty units’?

Under most Commonwealth laws, financial penalties are expressed in terms of ‘penalty units’ instead of dollar figures.  As an example, a maximum fine would generally be expressed as ’10 penalty units’ instead of ‘$1,000’. 

How does this increase impact on me?

The Australian Government recently increased the value of these penalty units by $30 per unit.  By increasing the penalty unit, fines are in effect increased for breaches of most laws.

This significant increment means that the maximum fines for breaches under the Spam Act could amount to $2.1 million per breach, per day. As for breaches under the Privacy Act, the maximum fine has increased from $360,000 to $420,000.  

What more do I need to know?

These fine increments signal the emphasis the government is placing on governing privacy and consumer laws. Small Business Minister, the Hon. Michael McCormack MP, has also indicated that he’ll be seeking to put in place tougher maximum penalties under the Australian Consumer Law from 1 July 2018.

If tougher maximum civil penalties are introduced, organisations could face fine increases of up to $10 million, or up to three times the value of the benefit the organisation received. In cases where the beneficial value cannot be determined, the fine would be 10 per cent of the organisation’s annual revenue in the preceding 12 months.  The penalty option will be selected based on which results in the greater fine.  For individuals, the maximum fine could be up to $500,000.

The proposal to increase the penalties for breaches of consumer laws and consumer protection follows a review over the past 12 months by state and federal governments of the Australian Consumer Law.  The increase in penalties will bring the Australian Consumer Law into line with the penalties already available under the competition provisions of the Competition and Consumer Act.  However, the proposal to increase the penalties depends on agreement from all the state and territory governments.