Israel’s main soft drink-proctution company, which markets Coca-Cola, will provide compensation worth approximately 7.7 million shekels to about 98,000 people.
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The company will compensate customers by issuing vouchers for eight bottles of 1.5-liter Coca-Cola or Coca-Cola Zero – after a settlement was reached in a class-action lawsuit against the company approved by the Central Region District Court.
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The company will compensate customers by issuing vouchers for eight bottles of 1.5-liter Coca-Cola or Coca-Cola Zero
(Photo: Shutterstock)
As part of the class-action lawsuit’s appeal to the court, submitted in May 2022, the petitioner, represented by Attorney Ohad Shmilovich, argued that the company had sent extensive advertising messages to the public, in violation of the Communications Law.
After submitting the appeal, the parties entered into a mediation process and reached a settlement. The company stated that it operates an online application through which it offers benefits, promotions and similar offers to registered users.
A user can choose whether they wish to receive promotional messages, and such messages should only be sent to those who have consented to receive them.
In December 2021, a software update was made to the application, aiming to improve the implementation of the promotions offered by the production company. The update was carried out by an external company providing services to the production company.
Due to a malfunction during the update, the mechanism for sending messages was altered, causing promotional messages to be sent to all registered users of the app, whether they’d approved receiving advertising or not.
The malfunction was discovered following the petitioner’s inquiry, before submitting the appeal, and it was fixed in April 2022. During the malfunction period, 1,438,456 messages were sent to approximately 98,000 registered customers of the application.
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Coca Cola's production company operates an app through which it offers benefits, promotions and similar offers to registered users
(Photo: Reuters)
The court's decision found that it is impossible to determine exactly which customers received messages against their will. After the malfunction was fixed, the company classified all registered users as rejecting such advertising, so that additional confirmation was needed to receive the advertising messages.
According to the company, data relating to the two months after the malfunction was fixed indicates that 55% of registered customers approved receiving advertising messages, and that it can be assumed that this was also the ratio during the malfunction period.
The settlement will apply to anyone who was registered for the company's app from December 2021 until the malfunction was fixed in April 2022 and received promotional material via text messages, amounting to about 98,000 people.
The voucher will be redeemable through the app, and a notification will be sent to group members via a text message within 30 days after the settlement is approved.
Additionally, as part of a future settlement, it was agreed that the company will implement policy revisions among its staff, including service providers involved in sending promotional messages on its behalf, to ensure that messages aren’t sent in violation of legal requirements.