On December 1, 2009, Bill C-27, also known as the Electronic Commerce Protection Act, passed through first reading in the Senate. Its objective is to regulate certain activities that discourage reliance on electronic means of carrying out commercial activities, such as spam, spyware and internet fraud, in order to promote efficiency and adaptability in the Canadian economy. More specifically, it will prohibit the sending of commercial electronic messages without the prior consent of the recipient, as well as provide rules governing the sending of those types of messages and a mechanism for withdrawing consent. It will also prohibit practices relating to the alteration of data transmission and the unauthorized installation of computer programs. When implemented, Bill C-27 will amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act.
The Electronic Commerce Protection Act defines both express and implied consent for receipt of electronic messages. Where express consent is required, commercial communications may not take place unless the person or corporation in question "opt-in" to being contacted. Conversely, implied consent is acceptable under circumstances where it can be deemed that that the person or corporation might be interested; however, the recipient must be given the ability to "opt-out" of the communications. Under the new legislation, implied consent will be assumed in cases where there is an existing business or non-business relationship that meets specified criteria. In the absence of such an existing relationship, the sender must obtain express consent to send unsolicited commercial electronic messages.
Amendments to the Competition Act include the addition of new criminal and reviewable conduction provisions under sections 52 and 74, which broaden the scope of misleading representations and telemarketing to better address online activity. Through these changes, it will become an offence to promote, directly or indirectly, any business interest or the supply or use of a product, whether knowingly or recklessly, that includes a false or misleading representation in the sender or subject matter information, the electronic message or the locator. Noteworthy is the distinction made for the electronic message itself, which states that only "material" false or misleading representations will be caught by the criminal and reviewable provisions of the Competition Act. There is no similar materiality threshold for the sender or subject matter information, or the locator. As with the other provisions in the Competition Act on misleading advertising, proof that a person was misled by the representations is not required to constitute an offence. The proposed legislation also introduces a mechanism for the Commissioner to conduct investigations and share information with foreign states in order to assist in their investigations of misleading advertising.
The proposed amendments will also change the standard of review for the issuance of temporary orders under section 74 of the Competition Act. The current standard to be met is a strong prima facie case that a person is engaging in reviewable conduct. Under these amendments, the standard of review will be reduced to the mere appearance to the court of reviewable conduct.
With regard to penalties, under the Electronic Commerce Protection Act, a new private right of action will be created with a three-year limitation period, granting affected individuals the right to apply to the court for an order of compensation in an amount equal to the actual loss or damages suffered. Under section 74 of the Competition Act, the amendments grant a court the ability to issue: (a) a compensatory order and (b) a fine (or administrative monetary penalty) of as much as $200 per contravention up to a maximum $1,000,000 per day, even if the application by the private person did not allege a violation under the new provision.
The Government believes that the new legislation and related amendments will boost Canadians' confidence in online commerce by cracking down on internet fraud, spam, spyware and other related threats.