Are You Ready to Comply with Canada’s Anti-Spam Legislation?

The Act will come into force in stages.  The spam provisions will take effect on July 1, 2014, the software provisions will take effect on January 15, 2015, and the private right of action takes effect on July 1, 2017.

The Act is aimed at encouraging growth and efficiency of electronic commerce by creating a scheme which eliminates conduct which would decrease confidence and trust in the on-line marketplace. The Act represents a “pro-consumer” response to unwanted electronic marketing schemes which invade our day to day electronic lives.

At the core of the Act is the general rule against sending commercial electronic messages unless the person sending the message has obtained the consent of the recipient.  As with most law, there are exceptions to the general rule.  The exceptions are found both in the Act and the regulations.  The key takeaway is that the general rule creates an “opt-in” system, putting the onus on the sender of a commercial electronic message to actively obtain the express consent of the recipient.  If express consent is not obtained, the sender of a commercial electronic message must then rely on implied consent or an exception to express consent.

The Act applies to the practice of sending commercial electronic messages (“CEMs”) which are electronic messages that encourage participation in a commercial activity by the text, hyperlinks, or contact information contained therein.  An example of a CEM would be an email soliciting business.  The Act also applies to the installation of computer programs in the course of a commercial activity.

Businesses that wish to engage in sending CEMs after the Act comes into force would be wise to start obtaining the consent of the individuals and business on its contact list.  After July 1, 2014 it will be more difficult to obtain consent through electronic communication as an email requesting consent would likely be considered a CEM.  This being said, there will be a transitional period after the Act takes effect in order to allow businesses to have enough time to bring their practices into compliance with the Act and regulations.  The transitional period will start when the Act comes into force and will continue for three years. During this time, consent to send CEMs will be implied in the case of certain pre-existing relationships (see section 66 of the Act).  The transition period will also apply to the installation of updates and upgrades to computer programs.  The transitional provisions will cease to apply if consent is expressly withdrawn.

Some notable exceptions to the requirement for consent are available in the following situations:

• The CEM is sent by a charity or political party
• The communication is between businesses with an active relationship and the message concerns the activities of the recipient organization
• Third party referrals for the first CEM
• The CEM is sent due to a legal obligation or to enforce a legal right
• If the sender and recipient are family or have a personal relationship

Consent may be implied in certain situations.  One notable situation of implied consent arises if a recipient has conspicuously published its electronic address which is not accompanied by a statement that the person does not wish to receive unsolicited CEMs.

Note that this is a law with serious consequences. A person who violates the anti-spam and software provisions of the Act (sections 6 to 9) will be liable to pay an administrative penalty.  The maximum penalty in the case of an individual is $1,000,000 and the maximum penalty in the case of any other person (e.g. businesses) is $10,000,000.