CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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May 6, 2019
My new Canadian Lawyer column discusses the increased potential liability for directors and officers of companies that violate Canada’s federal anti-spam legislation (CASL). Recently the CRTC, which jointly regulates Canada’s anti-spam legislation (together with federal privacy and competition law regulators), has both commenced enforcement against directors and officers of companies engaged in alleged illegal electronic marketing and issued detailed (and, for companies, troubling and challenging) guidelines relating to third party liability for CASL violations. These important CRTC developments need to be carefully reviewed by both directors and officers of companies engaged in electronic marketing, as well as third parties (e.g., marketing and advertising agencies) that are assisting companies in their electronic marketing campaigns.
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CRTC Ups the CASL Liability Ante For Directors and Officers
On April 23, the Canadian Radio-television and Telecommunications Commission announced the first penalty against an individual for violating Canada’s anti-spam law and imposed a $100,000 administrative monetary penalty against the former CEO of coupon marketing company nCrowd, Inc. This is the first time that an individual has been found liable for CASL violations committed by a corporation. This case also follows (relatively) recent CRTC guidance relating to potential third-party liability for CASL violations.
In making its announcement, the CRTC said that “individuals can’t hide behind their company’s structure or online entities” to avoid liability.
In general, s. 6 of Canada’s anti-spam legislation broadly prohibits both sending or permitting to be sent commercial electronic emails unless they comply with CASL’s consent and unsubscribe requirements.
More specifically, s. 31 sets out broad potential director and officer liability, providing that an officer, director, agent or mandatory of a corporation that violates CASL is liable for the violation if they directed, authorized, assented to, acquiesced in or participated in a violation, regardless of whether any proceeding against the corporation is commenced.
Section 9(1) of CASL also prohibits aiding, inducing or causing to be procured a violation of CASL. Taken together, these provisions allow CASL enforcement against individuals in a wide range of circumstances.
According to the CRTC, this particular case involved a complex series of corporate acquisitions, mass electronic marketing and subsequent bankruptcies, which made proceedings against the companies impractical. Through this process, the principals of a number of companies, including nCrowd, Inc., Teambuy.ca, DealFind.com Inc. and Dealathons, engaged in widespread electronic marketing of promotional vouchers for consumer products while simultaneously acquiring large email lists through acquisitions including from a company called Couch Commerce Inc.
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For my full Canadian Lawyer column, see: CRTC ups the CASL liability ante for directors and officers.
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Tips For Complying With
CASL (Canadian Anti-Spam Law)
Canada’s federal anti-spam legislation (CASL) came into force in 2014. Since then, electronic marketers and their advisors have been working to comply with what remains a complex law with outstanding uncertainties in some key areas. Having said that, many of the core requirements of CASL are not overly difficult to comply with (though continue to be misunderstood in many cases).
The following are some key legal tips for complying with CASL:
Express Consent. If you cannot rely on any category of implied consent (e.g., an existing business relationship within two years of a purchase) or a CASL exemption, ensure that you have collected and documented express consent from recipients. Express consent requests must include all of the information set out in CASL and its regulations otherwise the consent will not be valid. Failure to correctly collect consent is the most common CASL compliance error we see and a key basis for CRTC enforcement. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
Implied Consent. If you are relying on one or more categories of implied consent to send commercial electronic messages (CEMs) (e.g., an existing business relationship within two years of a purchase or six months of a product inquiry) ensure that all of the requirements of the particular type of implied consent are met. Remember that there is not a single blanket type of implied consent under CASL; rather, there are many different types of implied consent each with their own specific requirements. Also, as with express consent, CEMs that rely on implied consent must still include the prescribed sender identification information and unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
Consent For Third Parties To Send CEMs. Under CASL, consent to send CEMs can be requested for a sender themselves, identified third parties (or multiple identified third parties) or unidentified third parties (i.e., entities whose identities are not yet known when consent is requested). Importantly, however, each type of consent request has specific requirements for the request and, in the case of consent requests on behalf of unidentified third parties, somewhat complex additional requirements. The failure of marketers to correctly request consent for third parties (e.g., partners, affiliates, co-sponsors in promotions, etc.) is another CASL-related error that we regularly see. For more information, see: Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
CASL Exemptions. Similar to implied consent, there is no single exemption from CASL but many types of exemptions. If you are relying on a particular exemption (e.g., the “business-to-business” exemption) it is important to ensure that all of the requirements of the exemption are met. Importantly, there is little or no case law interpreting many CASL exemptions. This means that there may be more risk when relying on an exemption than express consent. Express consent is the strongest type of consent under CASL, considering that it does not expire unless a recipient unsubscribes.
Passive Consents. Remember that under CASL express consent or a category of implied consent is generally required to send CEMs unless a CASL exemption applies. As such, passive types of consents (e.g., language in general terms and conditions) will likely not be CASL compliant unless a sender does not need express consent (i.e., can rely on a category of implied consent or a CASL exemption).
Sharing Lists With Third Parties. Consider the potential risks of sharing e-mail or other electronic marketing lists with third parties. While this is certainly possible under CASL, marketers should be aware that there are specific requirements that must be met depending on who a list will be shared with (e.g., to expressly identify third parties with whom consent is being gathered on behalf of, including their contact information and other requirements for unidentified third parties). Marketers should also be aware that there is also potentially not only risk if they themselves violate CASL (e.g., send CEMs without consent), but also if they assist third parties that violate CASL. As such, it is often prudent for marketers that want to share electronic marketing lists with third parties to ensure that they have list sharing agreements in place with parties with whom they share e-mails. For more information, see: Anti-Spam Law (CASL) FAQs, Anti-Spam Law (CASL) Compliance Errors and Canadian Anti-Spam Law (CASL) Precedents. See also: Influencer, Co-Sponsor and List SharingAgreements.
Sender Identification Information. Ensure that all CEMs include the prescribed sender identification information required by CASL unless an exemption applies. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Unsubscribe Mechanism. Ensure that all CEMs include a CASL-compliant unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Document Consent. Under CASL, the onus is on senders of CEMs to document consent. As such, it is important to document the type of consent (express or implied) or exemption being relied upon, evidence of consent (e.g., subscription logs, forms, dates and names/e-mail addresses), divide lists according to the type of consent or exemption being relied upon and to scrub lists after recipients have unsubscribed or the relevant time period for a category of implied consent has expired (e.g., two years after a purchase). Failure to adequately document consent is another CASL-related compliance error that we regularly see, including not documenting consent at all, not segregating distribution lists and inadequately documenting consents or types of implied consent. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) Compliance and Canadian Anti-Spam Law (CASL) Precedents.
CASL Compliance Program. Consider adopting a CASL compliance program, particularly if electronic marketing is a core aspect of your marketing strategy. The CRTC has issued guidance on CASL compliance programs including key recommended elements. For more information, see: Anti-Spam Law (CASL) Compliance and Canadian Anti-Spam Law (CASL) Precedents.
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We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
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Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
