Canada will begin regulating commercial electronic messages beginning July 1, 2014, under its new anti-spam legislation, commonly known as Canada's Anti-Spam Legislation (CASL). Under CASL, a commercial electronic message is a message sent by any means of telecommunication (e.g., an e-mail, a text message, an instant message, or a social networking communication), one purpose of which is to encourage participation in a commercial activity (i.e., any transaction, act, or conduct of a commercial character, regardless of expectation of profit). CASL applies to individuals and organizations in and outside of Canada and contains significant enforcement provisions for noncompliance.

Bradley Freedman, who is Vancouver regional leader of the Borden Ladner Gervais LLP Technology Law Group in Canada, answered my questions about the general application, requirements, and enforcement of CASL as summarized below.

To Whom Does CASL Apply?

CASL applies to any individual or organization that sends, or causes or permits to be sent, a commercial electronic message if a computer system located in Canada is used to send or access the message, unless the message is subject to an exception specified in CASL.¹

One important exception is when the individual or organization that sends the commercial electronic message, or causes or permits the message to be sent, reasonably believes the message will be accessed in a specified country (including the United States) and the message conforms to the anti-spam law of that country. See the schedule of these countries. Other exceptions include messages:

• sent between individuals in a personal or family relationship (as defined in CASL's regulations);
• sent to a person engaged in a commercial activity and consisting solely of an inquiry or application related to that activity;
• sent within an organization concerning the activities of the organization;
• sent between organizations that have a relationship and the message concerns the activities of the recipient organization;
• sent in response to a request, inquiry, or complaint;
• regarding certain kinds of legal and judicial communications;
• 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 person who receives the message;
• sent and received on an electronic messaging service if certain prescribed requirements are satisfied;
• sent by or on behalf of a registered charity to raise funds for the charity; and
• sent by or on behalf of a political party or organization or a candidate for publicly elected office to solicit a contribution as defined in the Canada Elections Act. Each of those exceptions is narrowly defined in CASL.

What Does CASL Require?

CASL establishes an opt-in regime. An individual or organization generally must obtain the prior consent of a recipient before sending a commercial electronic message to the recipient, comply with prescribed formalities regarding the content of the commercial electronic message, and provide an effective unsubscribe mechanism.

Consent to receive a commercial electronic message may be express or, in limited circumstances, implied. A request for express consent must clearly and simply specify the purpose for which consent is requested, the specified information regarding the person or organization requesting the consent, and that the recipient may withdraw his or her consent. The information required to be disclosed in a consent request includes the name of the individual or organization requesting the consent and his or her postal address as well as telephone number, e-mail address, or website. The unsubscribe mechanism must be clear and prominent, at no cost to the recipient, and readily available via specified electronic means. The unsubscribe mechanism must be valid for at least 60 days after the commercial electronic message has been sent, and an unsubscribe request must be given effect within 10 business days.²

The consent requirement does not apply to certain kinds of commercial electronic messages, including messages that:

• respond to a request for a quote or estimate for a commercial transaction;
• facilitate, complete, or confirm a previous commercial transaction;
• provide warranty, product recall, safety, or security information about a product or service used or purchased by the recipient;
• notify of factual information about the ongoing use by a recipient of a product or service offered under a subscription, membership, account, loan, or similar relationship;
• provide employment or benefits information; and
• deliver products or services under a previous transaction.

Each of those exceptions is narrowly defined in CASL. Further, it is important to note that the information disclosure and unsubscribe mechanism requirements still apply even if the consent requirement does not apply.

What Are the Enforcement Provisions for Noncompliance with CASL?

Violations of CASL can result in liability to the sender of a prohibited commercial electronic message, persons who cause or permit the commercial electronic message to be sent, and persons who aid, induce, or procure the sending of the commercial electronic message. Also, directors, officers, and employers are subject to vicarious liability for noncompliance with CASL, subject to a due diligence defense.³

Beginning July 1, 2014, violations of CASL can result in administrative monetary penalties of up to C$1 million per violation for individuals and up to C$10 million for organizations. Beginning July 1, 2017, violations of CASL can be the subject of a private right of action by any affected individual or organization and can result in awards of compensatory damages and a private fine of up to C$200 per message or C$1 million per day. Class action lawsuits are anticipated.

Where Can I Learn More about CASL?

The Canadian government provides information about CASL, including the law, regulations, and FAQs.

1By comparison, in the United States, the federal Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003 applies to senders and initiators of commercial e-mail messages and, to a more limited extent, to transactional or relationship e-mail messages.

2The CAN-SPAM Act provides for certain identification and unsubscribe mechanism requirements for commercial e-mail messages. The opt-out must remain operative for at least 30 days after transmission of the original message. A recipient's opt-out request must be honored within 10 business days of receipt, except if the recipient provides affirmative consent subsequent to the opt-out request. There cannot be any requirement that the recipient pay a fee, provide any information beyond his or her e-mail address and opt-out preference, or take any step other than sending a reply e-mail or visiting a single Internet page as a condition for honoring an opt-out request. The e-mail address of a recipient that opts out cannot be sold, leased, exchanged, or otherwise transferred or released (including through any transaction or other transfer involving mailing lists bearing the recipient's e-mail address).

3Violations of the CAN-SPAM Act generally are enforced by the Federal Trade Commission. There also is state attorney general or other state official or agency enforcement of certain provisions of the CAN-SPAM Act.