Organizations that do business in Canada should be aware of key changes coming to Canada’s Anti-Spam Legislation (“CASL”). Beginning July 1, 2017, CASL will place stricter conditions on how companies can market their services via e-mail, text message or other electronic message to Canadian consumers. Companies should review and verify their mechanisms for obtaining consent, as well as their internal record keeping practices, are compliant with the new CASL. They should also review the format and content of their commercial electronic communications to ensure that all required disclosure of information is made to avoid potential fines or litigation brought by government agencies or private individuals.
The CASL has some interesting differences with its U.S. analogue, the CAN-SPAM Act. The CASL regulates the sending of any “commercial electronic message,” which is an electronic communication (i.e., e-mail, SMS, social media, instant message) that “encourages participation in a commercial activity, including, but not limited to: offering, advertising or promoting a product, a service or a person.” In this respect, the CASL casts a wider net than the CAN-SPAM law in the U.S. because it equally regulates not only e-mail but also SMS messages (which are not covered by CAN-SPAM in the U.S. but are regulated under the Telephone Consumer Protection Act), and also social media and instant messaging. Since the CASL came into effect, businesses have operated under a transition period. Businesses could infer implied consent of consumers to receive such communications if the business had an existing business relationship with the consumer when the CASL was enacted in July 2014 and those consumers did not “opt-out” prior to the end of the transition period.
That transition period ends on July 1, 2017. To continue sending commercial electronic messages, companies will need the express consent of the recipient, or must fall within an implied consent category. Two implied consent categories are if the recipient has an existing business relationship with the company within the last two (2) years as measured from the day before the message is sent, or the recipient must have made an inquiry within the past six (6) months as measured from the day before the message is sent. Express consent requires a person proactively to agree to receive an electronic commercial message, either in writing or orally.
If at any time the recipient asks to stop receiving commercial electronic messages, either through an unsubscribe mechanism or other communication, then the sender must stop within ten (10) business days.
Businesses should keep careful records of consent, express and implied, to comply with consent requirements, and to prove to regulators that the business is compliant, if necessary. Such records may include e-mail correspondence, using the unsubscribe function on a website or e-mail, or transaction receipts. Implied consent records may prove particularly helpful in tracking the dates of the existing business relationship or inquiries from recipients to allow organizations to meet the respective time windows.
The content of commercial electronic communications is also regulated under CASL. The sender must accurately identify his or her name, as well as the name of the business he or she is representing, if applicable. In addition, the sender must include valid contact information (which must remain in effect for at minimum 60 days from the time of sending). All commercial electronic messages must include an unsubscribe mechanism.
Government entities already have the power to enforce the CASL regulations. Violators of CASL are subject to potentially heavy administrative penalties of up to $1 million for individuals and $10 million for companies. Several companies have already been assessed administrative fines. For example, in September 2016, Kellogg Canada Inc. agreed to pay a $60,000 fine for CASL violations. In 2015, the Canadian Radio-Television and Telecommunications Commission (“CRTC”) levied a $1.1 million fine against Quebec company, Compu-Finder.
Also effective on July 1 under the CASL, unlike the CAN-SPAM Act which offers no private right of action, individuals will have the right to sue if they have received commercial electronic messages in violation of CASL. In such a case, a judge may order violators to pay actual damages and a sum of $200 for each violation of CASL. This change alone could trigger new plaintiffs’ litigation activity in Canadian courts for CASL violations, particularly for commercial emails and SMS messages that have until now not been subject to a private right of action remedy.