Canada’s New Anti-Spam Law – Are You Ready?

E-mails about the federal anti-spam law, which comes into effect on July 1, seem almost as numerous lately as the unwanted spam which the rules are designed to counter. It is likely that your repair business has been receiving emails for several months now from advertisers and suppliers asking for your consent to continue sending e-mails to you. The new rules come into effect on July 1, but if you use e-mail, text messages, or social media to advertise your business, or to provide information to people, then there are some steps you should take before then. Have you considered yet how the new rules may apply to your own operations?

The anti-spam law has a four line formal title, so it should not be a surprise that this law is simply being referred to lately as the “anti-spam law,” or by the acronym CASL. It was passed in December 2010, but implementation was held off for three and a half years to allow for plenty of warning to comply. While there are general exemptions for registered charities or political parties that are seeking donations, CASL will apply to more than just private for-profit corporations in Canada. Depending on the circumstances, it will also apply to non‐profit associations, individuals, clubs, unions, hospitals, educational institutions, partnerships and proprietorships, etc.

The first thing you need to do to determine if the advertising or newsletter emails, text messages, or other forms of electronic messages that your business sends out are what the CASL calls a “commercial electronic message” (CEM). The strict legal definition of a commercial message is any message that is “encouraging participation in a business transaction or activity, regardless of whether there is an expectation of profit.” This means a message using any form of electronic communications, including, social networking, websites, sms or text messaging, uniform resource locators (“urls”), other internet locators, apps, blogs, and even the increasingly old fashioned voice over internet protocol (VoIP). If a message encourages commercial activity, and it is sent by electronic communication, then it is a CEM. For example if your business or association is sending out messages which have the purpose, (whether in whole or in part), of doing something like advertising a good or service, making an offer to buy or sell goods or services from someone else, or bringing a business opportunity to someone’s attention, then any of those messages are CEMs.

There are some important specific exceptions to that blanket definition of a CEM. For example, if your business or association sends out an electronic message in response to a question from someone, or it is within an entity or between entities that have an established relationship, or is sent out to comply with a legal requirement, then such messages will not likely be CEMs.

Importance of Obtaining Consent

The issue of obtaining the consent of recipients to receiving CEMs from you is central to CASL. It is the most important thing you should know about CASL. It is why you have been receiving emails over the past month or two from entities which have sent you commercial electronic messages in the past asking for your consent to continue doing so after July 1.

Whether you are using emails, text messaging in the form of tweets, or social networking such as on Facebook, if what you are planning to send out after July 1 of this year constitutes as a commercial message, then here is what your automotive sector business should be doing before that day to comply with the new rules:

1. Before July 1, obtain the express consent of the people to whom you or your business or other type of organization is sending, or intends to send, commercial electronic messages. Keep a record of to whom you sent those requests and the responses you received whether they are consents, non-responses, or refusals to consent.

The anti-spam law says that consent may either be express or implied. Obtaining express consent means getting clear, advance consent from a customer or other recipient to receiving electronic commercial messages from you after July 1. Any such express consent must be before the messages are sent. You are not allowed to ask for consent in the commercial message itself. Yes, you will probably be able to ask for consent after July 1, but it will be more complicated for you to do so in keeping with CASL after that date as your request for consent, if not oral or in a letter, will have to be drafted carefully then avoid being a CEM itself. Such requests at present mainly take the form of a short announcement that the anti-spam law is coming into force shortly and asking the recipient to click a button to indicate your consent to continuing to receive ads, communications about programs, invitations to events, newsletters, and other announcements. If you do not receive consent in return to your request to a recipient for same, then you have to assume that express consent has not been given.

Any requests for consent that you send out need to contain:

(a) The name of the business, association, person, etc. seeking consent;

(b) The name of business, association, person, etc. on whose behalf the message is sent;

(c) Your contact information including any one or more of a telephone number, website, or email address;

(d) A clear statement that consent can be withdrawn at any time in the future; and,

(e) If you are seeking consent on behalf of a third party, then a statement as to who is seeking consent and on whose behalf.

2. Implied consent will be allowed after July 1, but only in situations where it was reasonable to conclude that you have someone’s permission to send then a CEM based on the relationship your business or association had with that person prior to July 1. I think the main business one will be if there is an existing business relationship in which the recipient purchased goods or services from your business in the two years prior to July 1, 2014. (If it is just simply a recipient who has asked questions or made an application though, then the period is six months, not two years, immediately before July 1, 2014). For non-for-profit organizations the period is also generally two years. There are other shorter than two year pre July 1,2014 review periods for implied consent in this new law though, so it is important to get specific advice for your particular circumstances.

When it comes to associations rather than for-profit businesses, what the courts may look for in determining implied consent in the future will be whether the recipient is a member, has been a member in the last few years before July 1, has attended a meeting, volunteered with the association, or made a donation to it. As the law has not yet taken effect, the courts have not yet had to determine in what particular fact patterns implied consent has been found to exist. There may be a few legal surprises in the years ahead on that point, so it is probably best for now that you do all you can to get express consent, rather than hoping that your electronic messages after July 1 will be ones that fit within the description of implied consent.

From my reading of the law, it appears that, currently, relying on implied consent after July 1 will only remain available to you for a three-year transition period, ending June 30, 2017. It will end then and if you have not obtained express consent from the recipient by then, your commercial electronic messages to the recipient may be in contravention of the law despite having been ok as implied consent CEMs before then. That may change in the next few years, so if you are relying on implied consent in a particular situation, I recommend that you regularly check if there have been changes to the implied consent provisions and limitation periods. If it does not change, then you should be taking steps in the three years after July 1, 2014 to be getting express consent from whomever you believe you currently have implied consent.

Some Other CASL Requirements

Whether you receive express consent, or are relying on having implied consent, it is important that the recipients be given an opportunity to opt out at any time from receipt further commercial electronic messages. Your messages should explain how to do that, (and not just only once in the message asking for consent).

The anti-spam law also requires that after July 1, your commercial electronic messages clearly identify your business and anyone else who is joining you in sending out the message. That means providing contact information including your business’ full name, mailing address, and either a telephone number or e-mail address. The anti-spam law will now require that your contact information must be accurate for a minimum of sixty days after the message in question has been sent.

Remember that the general consumer protection and business practices laws concerning communications in general also apply to electronic communications that your business sends out by e-mail, by text, or through social networking. The new anti-spam law echoes those requirements. Your commercial electronic messages should be checked to make sure nothing in them is inaccurate or misleading, including the identity of your business, the subject line, and any links to websites.

Steps to Take Before July 1, 2014

1. Review to whom you have been sending electronic messages and whether those electronic messages likely come within the broad definition of commercial electronic messages.

2. If the messages are CEMs, send an e-mail out to those recipients asking for their consent to you continuing to do so after July 1. You can use your electronic mailing list to send out a single message to all your listed recipients, customers, members, etc. The message should clearly ask for a response email, etc. to be sent to indicate consent. Keep a record of the non-consents / non-responses as well as the consents that you received.

While some or all of the CEMs you send may be covered by the implied consent exceptions, if they are messages to people not in your business or organization, or a related one, it is perhaps better to not assume that will always apply and to send out requests for consent anyway.

Important Items to Note After July 1, 2014

1. You will not be allowed to send a commercial electronic message to someone as a first communication when you do not have their prior express or implied consent to do so.

2. The implied consent exemption is currently scheduled to end on June 30, 2017, and you will need express consent from those recipients to keep sending them commercial electronic messages after that date. You should keep an eye on the implied consent definitions and limitation periods as they may change over the next few years.

3. You will not be able, (and are not now for that matter), to ask for consent in the same message which also contains your commercial electronic message.

4. The commercial electronic messages you do send after July 1 must now contain the required information discussed above.

Complying with the anti-spam law will mean some work for any automotive sector businesses or associations which use email, texting, or social networking to communicate with others, but this law coming into effect on July 1 is also in place to help you deal with unwanted spam, and, more significantly, to protect you from the considerable cost which can occur from the effects of malware, spyware, and unauthorized address harvesting. If you are sending requests for consent prior to July 1, then you need to take care that they are properly drafted to cover the key points and that the method for the recipient to indicate consent or non-consent is clear and easy for them to use. Individual situations involving commercial electronic communications will of course differ, so this article is meant only as a general overview.

Paul Schwartz is the ARA’s lawyer. He has conducted cases in all court levels in British Columbia and is a regular guest instructor in the Law Society of British Columbia’s bar admission course for law students. Mr. Schwartz is also a registered federal Trademark Agent. He and his colleagues have provided legal services to B.C. automotive sector businesses for more than twenty years. Mr. Schwartz is also a member of the Advisory Committee to the Judicial Council of British Columbia. He can be reached at (604) 687-3847 or paul@pwslaw.com.