The purpose of this Client Advisory is to address the risks associated with sending commercial electronic messages without complying with the provisions of the Canada Anti-Spam Legislation of 2014 (the "CASL"), which was passed in December of 2010 and made effective on July 1, 2014. Although the CASL regulations only apply to messages sent from or to Canadian computers and devices in Canada, you should be aware of the legislation now in order to limit liability with regard to future cross-border interactions.
A. What Type of Communications?
If an individual, business, or organization uses electronic channels to promote or market itself, its products or its services, the CASL must be considered. The CASL affects any individual, business or organization that sends Commercial Electronic Messages ("CEMs"). The CASL regulations apply to the sending of any CEM from or to Canadian computers and devices in Canada. A CEM is any message that:
- Is in an electronic format, including emails, instant messages, text messages, and some social media communications (e.g., Facebook messages and LinkedIn messages);
- Is sent to an electronic address, including email addresses, instant message accounts, phone accounts, and individual social media accounts; and
- Contains a message encouraging recipients to take part in some type of commercial activity, including the promotion of products, services, people/personas, companies, or organizations.
There are some types of electronic messages that are exempt from the CASL. Fax messages and fax numbers aren't considered electronic formats or addresses under the CASL. Also, electronic messages that are merely routed through Canadian computer systems are not subject to this law.
B. How to Comply – Express or Implied Consent
In order to send a CEM, the CASL requires the sender to obtain consent from the recipient. A request for express consent must address the purpose of the consent, the sender's contact information, and the fact that the recipient may revoke consent. A CEM cannot be used to request this consent which means companies will need to obtain express consent in a separate communication. Consent may be obtained in writing or orally, but a record should be kept of when/how consent was obtained. If a business obtained express consent prior to the CASL, that express consent remains valid.
There are three situations where "implied consent" is allowed:
- The sender has an active business relationship with the recipient, meaning they have sold something to the recipient within the past 2 years, or the recipient has made an inquiry about the sender's products at any point within the 6 months before the message was sent.
- The recipient publically published his or her email with no caveats concerning contact.
- A recipient whose business activities are relevant to the sent message has given the sender their contact information without indicating they don't want to receive messages.
- There is a 36 month transition period ending June 30, 2017, during which time consent may be implied if the recipient has not explicitly withdrawn consent and the recipient has either purchased something from the sender in the past, or has made an inquiry of the sender at some point in the past.
C. CEM Content Requirements
After obtaining the consent of recipients to send CEMs, the senders still have disclosure obligations under the CASL. The CASL mandates that specific language be included within each CEM. All CEMs must include the following three points:
- The sender's identity and the identity of anyone they are sending the message on behalf of;
- The sender's contact information; and
- An unsubscribe mechanism that provides the recipient with a free and easy way to unsubscribe via a link to a website. That link has to be valid for at least 60 days, and the sender must honor the unsubscribe request within 10 days.
D. Right of Action and Penalties
If a sender is judged to be in violation of the CASL, the Canadian Radio-Television and Telecommunications Commission (the "CRTC") has a range of enforcement tools available, however, there are no automatic penalties for violations. The CRTC judges each situation based on a series of factors, including the nature of the violation, the sender's history with the CASL, whether the sender benefited financially from the violation and the sender's ability to pay a penalty. Penalties for the most serious violations of the CASL can go as high as $1 million for individuals and $10 million for businesses. The CASL also establishes a right of private civil action which may be commenced by any individual or organization affected by a contravention of the CASL; however, this private right of action will not come into force until July 1, 2017.
It is important to note that individual directors, officers and agents of a corporation can be liable, if they directed, authorized, assented to, acquiesced in, or participated in the commission of the violation. Legitimate complaints about unsolicited emails may be turned over to the CRTC, which may investigate to determine if the message violates the CASL.