So much attention has been focused on the anti-spam and anti-spyware provision of Canada’s Anti-Spam Law (CASL) (with good reason!) that there is a risk of overlooking some subtle but meaningful provisions in the legislation dealing with misleading advertising. CASL amends the Competition Act (Canada) to address false or misleading representations made in commercial electronic messages in a way that could have a real impact on how businesses engage in email marketing.

CASL creates new offenses (a new Section 52.01) and new reviewable practices (a new Section 74.011) in the Competition Act which address:

  • any representation in an electronic message that is false or misleading in a material respect
  • any false or misleading representations made in a “locator”, which is a name or other information used to identify the source of data in a computer system (a URL is an example)
  • any false or misleading representations to be made in the sender information or subject matter of an electronic message

The first point is merely an application of the current general prohibition on misleading representations to electronic messages. However, the latter two points create unique provisions to address representations made in the locator, sender information and subject matter of an electronic message and, more importantly, note the absence of any materiality threshold in these provisions. This means that any false or misleading representations made in the sender information, subject line or any locator in an electronic message are captured, regardless of materiality.

While it is difficult to imagine an instance where a legitimate business would deliberately include a false locator or false sender information in an email, it is not uncommon to see enticing representations made in the subject line that are intended to be read in context of the body of the email. For example, the subject line may offer free or discounted products or services, and the recipient must open the email to review the full terms and conditions of the offer, which could qualify the representation made in the subject line.

If such an email is reviewed under the current version of the Competition Act, (i) the representation in the subject line would have to be false or misleading in a material respect to raise any issues, and (ii) the representation should arguably be considered together with the body of the email as part of the general impression test. However, now that the new amendments create a standalone prohibition for false or misleading representations in the subject line of an email, with no materiality qualifier, the intention of the amendments appears to be that the subject line be reviewed in isolation of the body of the email. Out of context of the body of the email, the subject line may be seen as false or misleading.

The changes create a different framework for evaluating false or misleading representations in the context of commercial messaging than what currently exists. This, combined with the fact that that the private right of action and statutory damages provisions in CASL can be triggered by non-compliance with the new rules, presents a compelling reason for businesses to revisit their electronic marketing campaigns, including to consider whether the subject line of any marketing emails are not false or misleading when viewed in isolation of the rest of the email.