Canada’s Anti-Spam Legislation (CASL) came into effect on July 1, 2014. It may affect you whether or not you are located in Canada, and whether or not you are spammer. The effect of the wide-sweeping legislation impacts a number of your regular business activities including:
1. Sending e-mail messages to existing or potential customers and clients;
2. Operating your company website; and
3. Offering a downloadable app or other software for the public’s/customers’ mobile phones or computers.
The enforcement of the new rules is supervised by three regulators in orchestration with enforcement offices and the courts. Any individual who believes they have been affected by your non-compliance can commence a private lawsuit against you. The business community is and should be concerned that this may lead to a new subject matter for class-action lawsuits.
CASL is coming in phases. Most of it came into force on July 1, 2014 and will be followed by the provisions related to computer programs coming into force on Jan. 15, 2015. The provisions relating to a Private Right of Action will be enacted on July 1, 2017.
The Canadian legislation appears to be the most comprehensive in the world, in connection with regulating the use of commercial electronic messaging. It does not merely regulate the unsolicited email communications often labelled as “spam”; it imposes a specific consent requirement that applies to most electronic messages sent for commercial purposes.
Section 6 of the CASL contains the basic prohibition against sending “commercial electronic messages” without initially obtaining consent and complying with the form and content requirements (including the mechanism to unsubscribe). Commercial electronic messages are defined broadly to cover emails or other electronic messages that have as one of their purposes “encouraging participation in a commercial activity”. “Commercial activity” is broadly defined to include any act or conduct of a commercial nature.
Whereas the United States Anti-SPAM Act, established on Dec. 16, 2003, relies on an “opt-out” consent basis (a functioning unsubscribe mechanism), the CASL requires an express “opt-in” consent from recipients. Additionally, all requests for consent and almost all commercial electronic messages must meet the required sender and contact person identity and the withdrawal of consent requirements.
The same “opt-in” consent requirement also applies to the installation of a computer program on a computer, smart phone or other computing device. Almost all computer programs are covered by the legislation. There are specific requirements for the form and consent of certain user notices and acknowledgments.
The CASL encompasses other activities including the use of address harvesting tools, the inclusion of misleading sender and subject matter information in an electronic message and the alteration of transmission data in an electronic message.
The scope of the CASL is not limited to activities in Canada. The law applies to electronic messages where the computer system used to send or access the message is located in Canada. In the case of computer programs, the law applies if the computer program is installed on a computing device in Canada, or if the person who installs or directs the installation of the program is situated in Canada. The result is that organizations outside of Canada who send messages to computers located in Canada or install computer programs on devices in Canada, will be subject to the CASL.
The limitations on spamming are broad in nature, so you have to carefully study the exceptions to determine those situations in which the legislation does not apply to your message, or in which you need no consent to send your message.
These include responses to commercial inquiries, internal business communications, legal communications and family or personal communications.
There are certain other exceptions for many businesses. These include:
1. Business to business communications – Commercial electronic messages sent between different organizations (or their employees, representatives or consultants) provided the organizations have an existing relationship and the messages concern activities of the recipient organization.
2. Charities – Messages sent by charities, with the primary purpose of raising funds for the charity, and if it is a registered charity in accordance with Canada’s Income Tax Act. The exemption does not assist non-profit organizations.
The new CASL creates significant changes for many current businesses practices, whether large, medium or small. Businesses must review in detail their policies and day-to-day practices regarding electronic marketing, customer communications, software and network management.
Speak to your legal advisor to obtain advice relating to any interpretation issues as it applies – if it does – to your business. Develop, outline, introduce, implement and observe, monitor and update your compliance plan.
In my opinion, the CASL could and should have been dealt with much less red tape, bureaucracy and at significantly less cost and upheaval to Canadians. What else is new when the government gets involved?
Toronto lawyer Martin Rumack’s practice areas include real estate law, corporate and commercial law, wills, estates, powers of attorney, family law and civil litigation. He is co-author of Legal Responsibilities of Real Estate Agents, 3rd Edition, available at www.lexisnexis.ca/bookstore. Website: www.martinrumack.com.