Advertising Law Blog

Marketers who email Canadian residents need to plan now for a soon to be effective Canadian version of the CAN-SPAM Act that has some important differences from the U.S. version of the law. Unlike the United States, which operates on a notice of an opt-out paradigm, the Canadian law requires an opt-in, albeit what constitutes opt-in is quite broad.  

Important portions of Canada’s Anti-Spam Legislation (hereinafter “CASL”) take effect on July 1, 2014. When the new law is in force, it will generally prohibit the:

• sending of commercial electronic messages without the recipient's consent (permission), including messages to email addresses and social networking accounts, and text messages sent to a cell phone;
• alteration of transmission data in an electronic message which results in the message being delivered to a different destination without express consent;
• installation of computer programs without the express consent of the owner of the computer system or its agent, such as an authorized employee;
• use of false or misleading representations online in the promotion of products or services;
• collection of personal information through accessing a computer system in violation of federal law (e.g. the Criminal Code of Canada); and
• collection of electronic addresses by the use of computer programs or the use of such addresses, without permission (address harvesting).

There are three government agencies responsible for enforcement of the law: The Canadian Radio-Television and Telecommunications Commission (CRTC); The Competition Bureau; and The Office of the Privacy Commissioner.

CASL applies to organizations that transmit CEMs to Canadians. A CEM is defined broadly to include any message that has as one of its purposes to encourage participation in a commercial activity. This includes advertisements and information about promotions, offers, business opportunities, etc. 

CASL creates a permission-based regime, meaning that, with some exceptions, consent is required before sending a CEM. CASL requires the recipient’s consent to send a CEM.  However, consent can either be express or implied. Marketers seeking to obtain express consent need to include specific language outlined by the Canadian authorities, which is different from what is typically used in the United States. In addition, there are a number of ways to obtain implied consent. For example, implied consent exists under a two-year existing business relationship or a six-month application exception. Like the EBR for do not call, marketers must be mindful that they are scrubbing their e-mail contact lists on a regular basis so that CEMs are not sent to recipients beyond the applicable implied consent time period.

The portion of CASL relating to email marketing takes effect on July 1, 2014. The law contains a private right of action with a three-year statute of limitations but the private right of action will not become effective until July 1, 2017. That means that until July 1, 2017, only government agencies, not private plaintiffs, can enforce CASL. The law also includes additional requirements relating to computer program installation that go into effect on January 15, 2015.

Commentators have stated that it is unclear whether CASL can be enforced directly against a United States company not located in Canada. While that issue may be presently up in the air, Canadian affiliates or business partners are exposed to liability under CASL, if a related U.S. company fails to conform to the law when communicating with Canadian residents. 

We note that the law has not yet taken effect, so there is not yet any legal precedent to determine the outer limits of what constitutes implied consent. Canada has issued FAQs that provide additional guidance.