The Standing Committee on Industry, Science and Technology has released its final report on Canada’s anti-spam law (CASL). Overall, the Committee has decided to clarify the law instead of making significant changes to the law to minimize unintended consequences. The recommendations made in the report also recognize that the Government of Canada should seize the opportunity to facilitate compliance with the legislation. While the Committee supports the principles and aims pursued by CASL, steps may be taken to ensure that the Act continues “to promote the efficiency and adaptability of the Canadian economy.”
Moreover, the Act and its regulations require clarifications to reduce the cost of compliance and better focus enforcement. Provisions defining “commercial electronic message,” consent, and “business-to-business” messages, among others, warrant the attention of the Government of Canada. The Government will be in a better position to assess the impact of the coming into force of the private right of action once these clarifications are implemented.
Background
In 2010, Parliament enacted An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act. More commonly known as Canada’s Anti-Spam Legislation or CASL. CASL prohibits commercial conduct that would, notably, impair the reliability and optimal use of electronic means of carrying out commercial activities. The Canadian Radio-television and Telecommunications Commission (CRTC), the Competition Bureau and the Office of the Privacy Commissioner of Canada (OPC) share the duty of enforcing the Act.
Most components of CASL came into force in July 2014. The sections that have yet to come into force are sections 47 to 51 and 55 pertaining to the private right of action (PRA). The PRA provisions were scheduled to come into force on July 1, 2017, but the Governor in Council ordered the suspension of their commencement under the recommendation of the Minister of Innovation, Science and Economic Development. On June 14, 2017, the House of Commons referred the Standing Committee on Industry, Science and Technology (Committee) to review the provisions and operation of the CASL in accordance with section 65 of the Act. This review consisted of thirteen meetings that took place between September 26 and November 9, 2017, and included 63 oral and written submissions.
It is important to note, that according to the report,
since the Act came into force in 2014, Innovation, Science and Economic Development Canada (ISED) observes that the amount of spam originating from Canada has decreased by more that a third. Moreover, while Canada figured among the top five spam-producing countries before the Act came into force, it now no longer appears among the top 10 or even top 20.”
Since the law came into force, the CRTC conducted over 30 investigations under the Act since it came into force. These investigations led to the delivery of 22 warning letters, the conclusion of five undertakings resulting in the payment of penalties amounting to $468,000, and the issuance of three notices of violation. These three notices of violation led to as many decisions from the Commission. In two of these decisions, the CRTC reduced the AMP originally imposed from $640,000 to $50,000 and from $1.1 million to $200,000, while the third AMP stood at $15,000. Canadians can consult the Commission’s website to get information on the circumstances of each case and the violations involved.
Recommendations
The list of recommendations submitted to the House of Commons for consideration include:
- The Committee recommends that the Government of Canada amend the the short title of the Act, Canada’s Anti-Spam Law to the “Electronic Commerce Protection Act.” The evidence provided to the Committee reveals that many Canadians engaging in commercial electronic messaging are not aware of the Act, let alone understand how to comply with its requirements. Businesses often fail to realize that the Act applies to them because their personnel do not think of their communications as “spam.” By underlining spam rather than electronic commerce and communications, the name under which the Act is commonly known exacerbates this problem. “Electronic Commerce Protection Act” reflects better the broader aim of the legislation.
- The Committee recommends that the Government of Canada clarify the definition of “commercial electronic message” to ensure that the provisions as enacted in the Act and its regulations are clear and understandable for parties subject to the legislation and do not create unintended cost of compliance. In particular, the status of administrative and transactional messages should be clarified. The definition of “commercial electronic message,” for example, leaves many puzzled:
- Does it extend to messages that, while they do not encourage the recipient to transact with the sender per se, if you include the logo of an organization, does that engage in commercial activities?
- Does it extend to a newsletter? Or to an email offering monetary incentives to attract participants to a study?
How does the definition of CEM apply to the diverse activities of charities or non-profit organizations? - More generally, what sort of content would support the conclusion that a message has as its purpose, or one of its purposes, to encourage participation in a commercial activity?
- The Committee recommends that the Government of Canada clarify the provisions pertaining to “implied consent” and “express consent” to ensure that the provisions as enacted in the Act and its regulations are clear and understandable for parties subject to the legislation and do not create unintended cost of compliance.
- The Committee recommends that the Government of Canada clarify the definition of “electronic address.” Whether business-to-business electronic messages fall under the definition of “commercial electronic message.” Clarify whether electronic messages listed under section 6(6) of the Act fall under the definition of “commercial electronic message.” Uncertainty makes it difficult to assess what is permissible under the legislation. Most interested stakeholders agree that the lack of proper understanding of the Act raises compliance costs by increasing the risk of violation in some cases and prompting an overcautious approach in others
- The Committee recommends that the Government of Canada consider how to best incorporate messages sent on behalf of an authorized person with regards to section 6(2)(a) of the Act.
- The Committee recommends that the Government of Canada clarify the application of the Act and its regulations to charities and non-profit organizations to ensure that the legislation is clear and understandable for these organizations and do not create unintended cost of compliance.
- The Committee recommends that the Canadian Radio-television and Telecommunications Commission increase efforts to educate Canadians, especially small businesses, with the goal of improving awareness and understanding of the Act and its regulations as well as increasing awareness of the technological tools available to assist in complying with the legislation.
- The Committee recommends that the Government of Canada further investigate the impact of implementing the private right of action, once changes and clarifications have been implemented to the Act and its regulations. At the same
time, it could consider if an award of damages should be based on proof of tangible harm. - The Committee recommends that the Government of Canada consider how the Canadian Radio-television and Telecommunications Commission can share information relative to the enforcement of the Act with domestic law
enforcement agencies, including the Royal Canadian Mounted Police, the Department of Public Safety, and cyber-security partners. - The Committee recommends that the Government of Canada investigate with the Canadian Radio-television and Telecommunications Commission how to be more transparent in the methods, investigations, and determinations of penalties, as well as on the collection and dissemination of data on consumer complaints and spamming trends.
- The Committee recommends that the Government of Canada, the Canadian Radio-television and Telecommunications Commission, the Competition Bureau and the Office of the Privacy Commissioner of Canada replace the phrase “Canada’s Anti-Spam Legislation” by the short title “Electronic Commerce Protection Act” and the acronym “CASL” by the acronym “ECPA” in all guidance and enforcement materials as well as other publications on every support, including fightspam.gc.ca.
What’s next
According to Micheal Geist, Professor of Law Canada Research Chair in Internet and E-commerce Law Faculty of Law, Common Law Section Centre for Law, Technology and Society, “the committee has asked the government for a detailed response to the report, which should be forthcoming in the spring. The government can be expected to fully support the enforcement recommendations, but retain flexibility on the recommendations for further clarification. While it remains possible that ISED Minister Navdeep Bains could later introduce clarifying amendments or regulations, the political risks associated with opposition criticism for weakening consumer privacy just prior to the 2019 election campaign more likely means that the foundation of the law will be kept largely unchanged for the foreseeable future. If so, the report should be a wake-up call for the CRTC to improve its guidance and enforcement efforts and for business to come to grips with the fact that Canada’s anti-spam law is here to stay.”
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