CASL News: The CRTC Provides Long-Awaited Guidance on Implied Consent and the Assessment of Administrative Monetary Penalties

by Field Law
Contact

Field Law

Although Canada’s anti-spam legislation (CASL or the Act) has been in force since July 1, 2014 and a number of substantial penalties have been imposed under its terms, the Canadian Radio-Television and Telecommunications Commission (the CRTC) has so far produced little guidance on the manner in which allegations of non-compliance – and the penalties they attract when a breach is established – are properly assessed. Until the last week in October, the CRTC’s Compliance and Enforcement Branch had publicly commented on only one Notice of Violation under CASL; for the most part, enforcement matters have taken the form of “undertakings” – essentially settlement agreements negotiated in private between the CRTC and the party allegedly in breach. This state of affairs has made it difficult for organizations operating in the digital sphere to fully understand the scope of the risk associated with the sending of commercial electronic messages (CEMs) in a manner that, for whatever reason, fails to comply with the CRTC’s interpretation of CASL.

On October 26, 2016, the CRTC shed some light on this question and issued its first written decision: CRTC 2016-428. The decision, which reconsiders a notice of violation and administrative monetary penalty (AMP) previously issued to Blackstone Learning Corp., is significant for a number of reasons, but perhaps most significantly because it supplies useful comment on the implied consent provisions of CASL and on the manner in which the CRTC assesses the need for and calculates the amount of AMPs.

The original notice of violation against Blackstone related to nine email campaigns implemented by the company between July 9 and September 18, 2014. During the campaigns, a total of 385,668 promotional emails were sent to employees at 25 different federal and provincial government offices. The campaigns resulted in over 60 formal complaints issued to the CRTC’s online Spam Reporting Centre. Following an investigation, which Blackstone refused to cooperate with, the CRTC issued a notice of violation finding there were reasonable grounds to believe Blackstone had sent CEMs without consent and imposing an AMP in the amount of $640,000. Blackstone chose to dispute the notice of violation, arguing that it had implied consent to send the CEMs in question and that the amount of the AMP was too high.

On the issue of implied consent, Blackstone relied on s. 10(9)(b), also known as the “conspicuous publication” rule. In effect, Blackstone asserted, it had implied consent to send its promotional emails because the electronic addresses they had been sent to were publicly available. The CRTC rejected this argument, and – helpfully – explained that the “conspicuous publication” exemption requires more than mere public availability. Rather, the electronic address must have been published in such a manner that it is reasonable to infer consent to receive the type of message sent, in the circumstances. Whether or not consent can be properly implied by “conspicuous publication” of an electronic address under s. 10(9)(b) is a matter to be evaluated on a case-by-case basis. The decision emphasizes that s. 10(9)(b) does not provide organizations with a broad license to contact any email address they find online. Furthermore, the burden of proving that implied consent exists in any given case falls upon the sender of the disputed CEMs. Since Blackstone failed to provide any, or any persuasive, evidence concerning how it arrived at the conclusion that the targets of its email campaigns had effectively granted implied consent, the CRTC upheld the finding in its original notice of violation that CEMs had been sent without consent, and a penalty of some kind was appropriate.

On the question of penalty, Blackstone’s position was on firmer ground. Though it was clear that Blackstone had breached the Act and had, moreover, been generally uncooperative throughout, the CRTC ultimately found that while Blackstone had earned a penalty, the amount originally imposed - $640,000 – was too high. A number of factors supported this view, but most notably the fact that the purpose of the penalty is not to punish but rather to promote compliance with the Act. If an organization is functionally destroyed by the AMP, the CRTC reasoned, then the purpose of promoting compliance is defeated. In Blackstone’s case, the CRTC accepted unaudited financial statements submitted by the company, which demonstrated that the business was a small one and the original amount of the AMP represented several years’ worth of revenue. Other factors also militated in favour of a lesser penalty, including the relatively short time-period during which the offending CEMs had been sent, and the presence of indicators that Blackstone had intended to comply with CASL and would self-correct in the future. In the end, the CRTC reduced the penalty to $50,000, payable within 30 days of the date of the decision.

The decision contains good information for organizations across Canada, but there are key takeaways that senders of CEMs should keep in mind going forward:

  • In order to rely on the “conspicuous publication” rule, an organization must be able to show that it is reasonable in the circumstances to infer that any given recipient has impliedly consented to receipt of a CEM. The burden of proof falls upon the sender
  • Organizations should develop a practice of keeping detailed records of consent, whether express or implied
  • There can be great value in disputing a notice of violation in the proper circumstances – in this case, Blackstone’s challenge reduced the AMP from $640,000 to $50,000
  • Cooperating with the CRTC during the investigation process, and demonstrating a desire to self-correct, can help to limit the scope of an AMP

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Field Law | Attorney Advertising

Written by:

Field Law
Contact
more
less

Field Law on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.