The Many Purposes of Canadian Anti-Spam Legislation (CASL)

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March 18, 2016

The Many Purposes of CASL

CASL seeks to regulate the following:
● “Commercial electronic messages” (i.e., “spam”)
● Any type of malware, spyware, phishing expeditions
● Computer program installations
● Collection of personal information without consent through automated means
● Electronic misleading commercial representations
● Altering transmission data to re-route messages
● Potentially in the future (but not now) - Unsolicited telephone calls/faxes (eventual replacement of existing CRTC “Do Not Call” rules)

How does CASL compare with CAN-SPAM?

● There are similarities:
● Both laws are forms of consumer protection legislation designed to regulate deceptive or unfair online practices
● Both laws are based on the concept of consent when sending commercial electronic messages
● “Transactional or relationship” messages are similar to some of those for which consent is not required under CASL
● Both laws compel companies using electronic communications to develop diligence strategies for communicating with their customers lawfully through this medium

However, there are significant differences:
● CASL takes an absolute approach – CEMS broadly defined to include all forms of electronic communication
● All CEMs prohibited unless there is an exception or consent – no concept of commercial “primary purpose”
● Extraterritoriality – CASL will apply whether the message is coming from a computer in Canada or can be accessed by a computer in Canada
● Form of consent – in CASL, consent must be opt-in; opt-out not acceptable
● Certain message information is required even if consent not necessary
● Penalties – “Administrative Monetary Penalties” in CASL of up to $10 million Canadian vs. $16,000 under CAN-SPAM
● Private right of action created to compensate for damage and impose penalties of up to $1 million/day/contravention
● Note class action potential
● More than CEMs covered; CASL also applies to computer software downloads and potentially even telemarketing
● Director and officer personal liability under CASL

Spam: The General Rule under CASL
● SPAM – There is a complete prohibition against transmitting any commercial electronic message (“CEM”) unless:
● it is an excluded category of message; or
● there is some form of consent (express/implied) and the CEM is in the form prescribed by CASL. (s.6)
● Departs from international standards as CEM is broadly defined
● Consents to collect, use or disclose information under Canadian privacy laws are not necessarily valid for the purposes of CASL (open to interpretation)

Format of CEMs?
● “electronic message” means a message sent by any means of telecommunication, including a text, sound, voice or image message.
● “electronic address” means an address used in connection with the transmission of an electronic message to:
● an electronic mail account
● an instant messaging account
● a telephone account
● any similar account
● Cannot send an email to request consent

What is a “commercial electronic message”?
● “…an electronic message that, having regard to the content of the message, the hyperlinks in the message to content on a website or other database, or the contact information contained in the message, it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity, including an electronic message that
(a) offers to purchase, sell, barter or lease a product, goods, a service, land or an interest or right in land;
(b) offers to provide a business, investment or gaming opportunity;
(c) advertises or promotes anything referred to in paragraph (a) or (b); or
(d) promotes a person, including the public image of a person, as being a person who does anything referred to in any of paragraphs (a) to (c), or who intends to do so.”

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What is a “commercial activity”?
● “Any particular transaction, act or conduct or any regular course of conduct that is of a commercial character, whether or not the person who carries it out does so in the expectation of profit, other than any transaction, act or conduct that is carried out for the purposes of law enforcement, public safety, the protection of Canada, the conduct of international affairs or the defence of Canada.”

Spam: Total Exemptions from CASL
● Total Exemptions (s. 6(5)):
● CEMS arising from personal or family relationships
● CEMs sent to a person engaged in a commercial activity and consisting solely of an inquiry or application related to that activity
● Telecom service providers when they enable transmissions of messages (s. 6(7))
● Two-way interactive voice communication (s. 6(8))
● As defined in the regulations
● New exemptions from Industry Canada regulations:
● B2B
● CEMs between employees, representatives, consultants or franchisees of an organization about the organization’s activities
● CEMS from employees, representatives, consultants or franchisees of an organization to employees, representatives, consultants or franchisees of an organization of another organizations if the organizations have a relationship and the message concerns the activities of the recipient organization
● New exemptions from Industry Canada regulations:
● CEMs sent in response to a request, inquiry or complaint or that was solicited by recipient
● CEMs sent to a person to
● Satisfy a legal/juridical obligation
● Notify of an existing/pending right, legal or juridical obligation, court order, judgment or tariff
● To enforce a right arising under the laws of Canada, a province, a municipality or a foreign state
● New exemptions from Industry Canada regulations:
● CEM sent and received on an electronic messaging service if required disclosure and unsubscribe are “conspicuously published and readily available” on the GUI of the service and the recipient consents – expressly or by implication (e.g., Blackberry Messenger, WhatsApp, also potentially FaceBook and LinkedIn)
● CEM sent to a limited-access secure and confidential account to which messages can only be sent by the person who provides the account to the recipient (e.g., online banking email functionality)
● New exemptions from Industry Canada regulations:
● CEMs where sender “reasonably believes” message will be accessed in a scheduled foreign state – if message conforms to the law of the foreign state that addresses conduct “substantially similar” to conduct under Section 6 of CASL; 116 countries are listed in the Schedule
● CEMs sent by or on behalf of a registered charity under Section 248(1) of the Income Tax Act and the primary purpose of the message is to raise money for the charity
● New exemptions from Industry Canada regulations:
● CEMs sent by or on behalf of political parties or organizations, candidates for publicly elected office and the
primary purpose is to solicit contributions as defined in subsection 2(1) of the Canada Elections Act

Spam: Exemptions to Consent
● Section 6(6) exemptions to the consent requirement in s. 6(1)(a) (but format requirements still apply):
● Providing a quote to a person in response to a request from such person
● Furtherance of a previously agreed transaction
● Providing warranty, product recall or safety information
● Factual information about a purchase
● Information about an employment or benefit plan
● Deliver a product, service or upgrade
● As specified in regulations – “First referral” CEM; need existing business or non-business relationship or family or personal relationship between person making referral and each of sender and recipient; need disclosure of name of referring person and statement that message results from the referral

Spam: Implied Consent
● Consent is implied for the purposes of the anti spam provisions (s. 10(9)) only if:
● There is an “existing business relationship” or “existing nonbusiness relationship”
● The person to whom the message is sent has “conspicuously published” their electronic address without a statement that the person does not wish to receive unsolicited CEMs and the message is relevant to the person’s business, role, functions or duties in business or in
official capacity
● Person to whom the message is sent has disclosed their electronic address to the person who send the message without indicating that the person does not wish to receive unsolicited CEMs and the message is relevant to the person’s business, role, functions or duties in business or in official capacity
● As defined in regulations

Existing Business Relationship
● Meaning (s.10(10)):
● A business relationship between sender and recipient  arises from any of the following cases in the 2 years preceding the sending of the message:
● the purchase, lease or barter of a product, goods, service or land (or interest or right in land)
● the acceptance of a business, investment or gaming opportunity
● Arising from an inquiry or application related to these items from the message recipient, in the past 6 months
● A written contract unrelated to any of the above – existing or expired in the 2 year period preceding transmission

Existing Non-Business Relationship
● Arises from any of the following scenarios in the two year period immediately preceding the date the message was sent (s.10(13)):
● a donation or gift to the sender (i.e., registered charity, a political party or organization, or a person who is a candidate for publicly elected office)
● volunteer work or attendance at a meeting
● membership in a club, association or voluntary organization

Request for Consent (Express Consent)

● A request for consent must contain (s. 10(1)):
● Prescribed information that identifies the person seeking consent and, if the person is seeking consent on behalf of another person,
prescribed information that identifies the other person
● Statement re who is seeking request on behalf of whom
● Prescribed contact information
● The purpose for which the consent is sought
● Statement that consent may be withdrawn
● Any other prescribed information
● Additional requirements for computer programs
● Can’t be “buried” in a set of Ts and Cs – clear and prominent
● CRTC Guidelines – consents can be oral or electronic (if verifiable)
● Toggling not permitted

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