As we enter into the second quarter of 2015, it has become clear that consumer protection will be taking center stage this year. In March of this year, nearly eight months after Canada’s Anti-Spam Legislation (CASL) came into force, the Canadian Radio-television and Telecommunications Commission (CRTC), demonstrated that it was willing to impose significant penalties for violations of CASL. Also in March, the federal Competition Bureau (the Bureau) announced a significant enforcement action, alleging deceptive marketing practices by two of Canada’s largest rental car companies. The Bureau also entered into a Memorandum of Understanding (MOU) with Ontario’s Ministry of Government and Consumer Services (the Ministry) to promote cooperation in enforcing their respective mandates, including in the area of consumer protection. Finally, with the introduction of Bill C-49 by Industry Canada late last year, cross-border consumer price discrimination activities may also be under new scrutiny.
CASL Enforcement On the Rise
On March 5, 2015 the CRTC announced that it had imposed a fine in the amount of $1.1 million against Compu-Finder. This was the first penalty imposed by the CRTC pursuant to CASL. The CRTC imposed the fine because Compu-Finder had “flagrantly violated the basic principles of [CASL]” by sending commercial emails without the recipient’s consent and without a properly functioning unsubscribe mechanism.
Less than three weeks later, on March 25, 2015, the CRTC reported the results of its investigation into allegations against Plentyoffish Media Inc. (POF). The complaints against POF alleged that, between July 1, 2014 and October 8, 2014, POF sent commercial emails to registered users in which the unsubscribe mechanism was not clearly set out. The complaints also alleged that they could not readily unsubscribe using POF’s unsubscribe function, as required under CASL. Once POF learned of the allegations and the CRTC’s investigation, the company voluntarily updated its unsubscribe mechanism and entered into an undertaking with the CRTC. Pursuant to the undertaking, POF agreed to pay $48,000 and to create and implement a compliance program to prevent infringements of CASL in the future.
These cases are only two examples of the enforcement actions undertaken by the CRTC recently. The CRTC has noted that it is investigating a number of other alleged violations of CASL and, as indicated by the penalties imposed in these cases, it is clear that the CRTC will be taking violations of CASL seriously. Further, pursuant to a Memorandum of Understandingentered into between the Bureau, the Privacy Commissioner of Canada (OPC) and the CRTC last year, the CRTC will be working with these agencies in enforcing CASL and we expect that 2015 will be marked by a concerted focus by all three agencies to enforce CASL.
Notably, the Bureau’s draft 2015-2018 Strategic Plan (the 3-Year Plan), which was released for public comment on March 27, 2015, states its objective of increasing awareness, and supporting enforcement of and compliance with CASL, by collaborating with the CRTC and the OPC. Specifically, the Bureau’s 3-Year Plan includes the targeting of false and misleading representations and deceptive marketing practices in the electronic marketplace, including in social media, promotional emails, text messages and instant messages. Although still in draft form, as discussed in the next section, the Bureau has already begun to implement it’s 3-Year Plan with its recent announcement of its first CASL-related enforcement action
Consumer Protection Continues to be a Focus for the Bureau
On March 11, 2015 the Bureau announced that it had filed an application with the Competition Tribunal two of Canada’s largest rental car companies. The Bureau is seeking an end to the alleged practices, $30 million in administrative penalties and refunds for customers. This action is the Bureau’s first proceeding pursuant to amendments to the Competition Act enacted as a part of CASL. These provisions were implicated because the car rental companies used electronic messages to advertise the prices at issue in the application.
Also consistent with the Bureau’s 3-Year Plan to “cooperate and collaborate with its consumer protection agency partners” to target fraudulent and deceptive advertising in the online and mobile markets, the Bureau and the Ministry recentlyannounced that they have entered into a MOU to cooperate with implementing their respective mandates. The mandate of the Bureau and the Ministry overlap in a number of important areas, including in the realm of consumer protection. In the MOU, the Bureau and the Ministry agreed to share information with respect to matters of mutual interest, regularly share information regarding enforcement, strategic priorities, marketplace trends, and policies, and to coordinate communications on consumer protection and competition matters.
Putting Canadian Consumers First
Investigations into cross-border consumer price discrimination activities may also be on the horizon for 2015. Late last year, the Minister of Industry introduced Bill C-49, the Price Transparency Act (the PTA), which is intended to implement the federal government’s promise to “end geographic price discrimination against Canadians,” or more specifically, a higher price being charged in Canada than that charged for a similar product in the United States. The PTA would give the Bureau expansive tools to investigate companies that charge different prices in Canada and the United States and publicly denounce their lawful pricing practices, raising important questions about procedural fairness and confidentiality.
*The author would like to acknowledge the assistance of articling student Waleed Malik in the preparation of this update.