UPDATE to the original post below: The Canadian Government has postponed implementation of the private right of action under Canada’s Anti-Spam Legislation (described below). The postponement was in response to concerns among various interest groups and communities as to unnecessary red tape and burdensome costs to maintain compliance. As a result, the CASL is under further legislative review and may face further revisions before individual enforcement is permitted. A copy of the Canadian Government’s press release concerning the postponement is available here.
Canada’s Anti-Spam Law (CASL), with some similarities to the United States’ Telephone Consumer Protection Act (TCPA), has been on the books for some time now. However, a new phase of private enforcement begins on July 1, 2017 and could have a substantial impact on any entity or person that markets to Canadian residents.
1. What is the CASL?
Canada’s Anti-Spam Law (CASL) supports marketplace integrity by prohibiting certain unsolicited electronic transmissions. In order to achieve this marketplace regulation, the CASL includes a vast array of communication methods to protect the modern consumer. Specifically, the CASL prevents commercial entities from engaging new consumers with electronic transmissions sent with “commercial character.” In other words, a business transmitting “any means of telecommunication, including a text, sound, voice or image message” to any electronic address runs afoul of the CASL without a valid exception. Importantly, the CASL sets a low bar on what constitutes commercial activity. In fact, the requisite commerciality need not possess “expectation of profit.” Rather, it merely requires marketplace presence coupled with illicit electronic contact.
While the CASL protects consumers from unsolicited email, text and social media messages, it further protects consumers by securing personal data and devices. Data mining, address harvesting and hacking provisions are noteworthy CASL protections that help bolster consumer protection under the CASL.
2. What is the Potential Liability under the CASL?
A. Who is Potentially Liable under the CASL?
The CASL applies to business entities and individual marketplace participants. In addition, corporate agents, officers and directors face personal liability for illicit conduct. Therefore, business entities and individual employees may face prosecution under the CASL. Further, the CASL carries a three-year statute of limitations for any improper communications or acts.
B. Potential Penalties
With serious monetary implications at stake, Canada’s business marketplace—including individual participants—should carefully consider the CASL. In fact, individuals found to violate the CASL face statutory damages of $200 for each violation with a cap at $1 million. This penalty, however, pales in comparison to the $10 million dollar liability cap for businesses contravening the CASL.
The CASL contains no scienter requirement to attach liability. Thus, violating the act need not contain knowledge of wrongdoing. As such, the CASL broadly impacts all Canadian marketplace participants.
Enforcing this legislation, Canada taps the Canadian Radio-television and Telecommunications Commission; the Competition Bureau; and the Office of Privacy Commissioner of Canada to prosecute CASL violations. Notably, Canada’s CASL website contains an electronic terminal to report potential CASL wrongdoing. The ease of consumer reporting may further incentivize CASL compliance due to the accessibility and minimal burden to report alleged infractions.
In addition, CASL legislation further deputizes Canadian citizens to monitor and enforce the CASL by providing a private right of action. Thus, individual claimants may file suit against alleged CASL violators. Although subject to an initial transition period, individuals may utilize this private right of action starting on July 1, 2017. As a result, entities, individuals and groups of individuals—improperly solicited by a marketplace participant—may soon pursue legal action to recover actual and statutory damages.
3. How Will the CASL Apply to Persons and Entities Within the United States?
The CASL does not proscribe foreign immunity. Thus, all Canadian marketplace participants—including electronic marketplace participation without a physical presence—must comply with the CASL. Ascertaining the extent of coordination amongst Canadian enforcement agencies and foreign governmental agencies remains unclear. Moreover, without speculating on the efficacy of pursuing CASL violations across borders, non-compliant e-commerce participation attaches serious risk and potentially catastrophic consequences. Accordingly, American entities with Canadian e-commerce contacts should take notice of the CASL and consider forming a compliance committee or program to protect corporate interests.
4. Tips for CASL Compliance
Complying with the CASL requires careful and coordinated action. Entities grappling with the CASL should prioritize eliminating potential contacts without a legitimate CASL exception. All Canadian e-commerce marketplace participants should take stock of electronic marketing, advertisement and loyalty campaigns designed to contact—or maintain contact—with customers.
A noteworthy feature of the CASL excuses electronic communication upon consent. This consent, however, arises under a narrow set of circumstances. Specifically, the CASL allows express and implied consent. Express consent shall not stem from illicit electronic contact and must contain an opt-in provision. As a result, the widespread existence of pre-filled boilerplate opt-out provisions that prey upon unsuspecting consumers are no longer permitted under the CASL. On the other hand, implied consent may arise from a prior business relationship. Thus, the purchase of goods or services within a two year period permits a window for compliant e-commerce transmissions. The two year cap serves to protect consumers from future unwanted solicitation and burdens businesses with tracking exchange histories and timelines.
In addition, establishing a robust CASL compliance program—while presumably eliminating non-compliant conduct—insulates market participants against liability. In fact, the CASL codifies a due diligence defense. Quoting the CASL, “[a] person must not be found to be liable for a violation if they establish that they exercised due diligence to prevent the commission of the violation.” While emphasizing compliant conduct may curb potential CASL violations, the safe harbor provision also may excuse otherwise non-compliant conduct with proper diligence. Therefore, establishing a CASL compliance program may save valuable business capital in the long run.
5. Further CASL Insight and Access
For more CASL information, please see the informational links listed below.
- Bill C-28: Canada’s Anti-Spam Legislation, http://laws-lois.justice.gc.ca/PDF/E-1.6.pdf (last modified Jan. 15, 2015).
- Frequently Asked Questions About Canada’s Anti-Spam Legislation, Competition Bureau, Frequently asked questions about Canada’s anti-spam legislation - Competition Bureau (last modified Nov. 5, 2015).
 Bill C-28: Canada’s Anti-Spam Legislation, (Can.) http://laws-lois.justice.gc.ca/PDF/E-1.6.pdf (last modified Jan. 15, 2015).
 Id. at Section 1(1).
 Id. at Section 1(1)(d). Importantly, the statute codifies exceptions, which allow contact amongst family; upon consent; and/or with a prior business relationship. See Id. at Section 5.
 Id. at Section 1(1).
 Id. at Section 5.
 Id. at Section 31.
 Bill C-28: Canada’s Anti-Spam Legislation, (Can.) http://laws-lois.justice.gc.ca/PDF/E-1.6.pdf (last modified Jan. 15, 2015) (Section 4).
 Canada’s Anti-Spam Legislation, Enforcement, http://www.ic.gc.ca/eic/site/030.nsf/eng/h_00026.html (last updated June 13, 2017).
 Canada’s Anti-Spam Legislation, Submit Information to the Spam Reporting Centre, http://www.ic.gc.ca/eic/site/030.nsf/frm-eng/MMCN-9EZV6S (last modified Mar. 30, 2017).
 Bill C-28: Canada’s Anti-Spam Legislation, (Can.) http://laws-lois.justice.gc.ca/PDF/E-1.6.pdf (last modified Jan. 15, 2015) (Section 47).
 See Id. at section (47-51, and 55).
 Id. at Section 6-8.
 Id. at Section 1(3).
 Id. at Section 10(10).
 Id. at Section 33(1).