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If you are a business owner who operates in the online world, you know the importance of establishing a mailing list. The ubiquity of emails generated from services like MailChimp and ConvertKit testifies to the popularity of these lists. You should also know how CASL will affect your business. According to marketers, the email list is the best and least costly marketing method with an ROI of 3800%. With stats like this, business owners who operate at least partially online should take notice. On the other hand, consumers don't want to be inundated with emails trying to sell them something. I know that I am very selective about the type of emails I receive. We all hate spam!
In 2014, the Canadian government adopted a law to regulate marketing emails (it covers more than just emails). The Canadian Anti-Spam Law (CASL) regulates email marketing. It came into force over three years, with the law's final aspects coming into force this year, on July 1, 2017. The CRTC enforces the law. This law is the most stringent of its kind in the developed world. Business owners must take notice and review their practices and policies. The law gives the CRTC the power to fine individuals up to $1 million and businesses $10 million. If you are a small business owner, these figures should give you pause. If you think that these are just theoretical numbers, then you should ask the people at Porter's Airlines how much they enjoyed paying a penalty of $150,000.00. The CRTC concluded:
Porter Airlines Inc. sent certain commercial electronic messages that contained an unsubscribe mechanism that was not set out "clearly and prominently," and was missing an unsubscribe mechanism or that did not provide complete identification information. Also, Porter Airlines Inc. was unable to provide proof of consent for some of the email addresses to send commercial electronic messages.
As you can see, the CRTC assessed the penalty because the emails did not comply with the act's requirements, and they were unable to provide proof of consent for "some" email addresses. You can verify this information yourself by viewing the CRTC website.
CASL first defines the type of electronic communication covered. Commercial Electronic Messages (CEM) is defined as: "a commercial electronic message is an electronic message that...it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity." This means a) the message must be in an electronic format. The Act defines it as, "a message sent by any means of telecommunication, including a text, sound, voice or image message." b) The message must encourage participation in a commercial activity. As you can see, it covers more than just emails. It also covers text messages. This would also cover messages sent through social media, such as LinkedIn or Facebook.
CASL allows you to send CEM's provided you obtain consent. You can obtain the recipient's express consent, or the act will allow you to claim the recipient gave you implied consent in certain circumstances. Express consent is straightforward. Someone must permit you to send them CEM's. You must advise them of the purpose of your emails (or other electronic messages) and provide them with your contact information. If you seek consent on behalf of someone, you must identify that person or organization as well. However, you cannot send them an email asking for consent because even asking someone to receive your emails is considered a CEM. It's a bit of a catch 22. However, you can ask permission by phone or in person, as the act does not cover these activities. Implied consent is a little trickier. You can rely on existing business relationships as long as you have dealt with that person in the last two years. If someone registered or applied for something, but did not purchase from you, then the window of implied consent is six months. You can also send CEM's to people you personally know. While you might be tempted just to upload your entire list in MailChimp, you must remember the onus is on you, the sender of emails, to prove an existing relationship exists. Keeping records is vitally important. Once you have consent, your CEM's must include:
As stated above, CEM's include messages sent through social media. While it is safe to post information publicly on your Facebook wall or LinkedIn feed, CASL prohibits sending messages via Messenger or LinkedIn Mail unless you first obtain consent. The same consent rules discussed above apply. If you know the person, you can rely on implied consent. However, receiving "likes" or having someone accept your invitation to connect would not, in itself, amount to a personal relationship. While I do not believe the CRTC has pursued anyone yet, as of July 1, 2017, individuals will have a right of action (more on this later). So be careful if you hear someone tell you that social media messages are safe.
If you send CEM's contrary to the provisions in CASL, you commit a violation. While a violation is not an offence under the act, it triggers severe administrative penalties. Right now, the CRTC can fine individuals up to $1 million and businesses up to $10 million. To date, Rogers Media Inc has paid the largest fine of $200,000.00. The act sets out a framework that the CRTC must consider when assessing fines, including the ability to pay. So while the maximum penalties may keep some up at night, I doubt the CRTC would fine the maximum amount. That said, we all struggle with cash flow at times. A penalty of $30,000.00 would still have a serious effect on most small businesses.
*The government announced they are suspending the implementation of the private right to action. Read my blog post here for more information*
As stated above, the last piece of the legislation comes into force on July 1, 2017. This final piece would allow individuals who receive unwanted CEM's (or spam) to sue the person or organization sending them if those messages do not respect the law. This right of action is in addition to the CRTC's role. The CRTC will continue to investigate and impose penalties. So you could end up paying twice. Once for a penalty issued by the CRTC, and to an individual who sues you for sending the message. CASL allows a judge to order you to pay compensation for an amount equal to any actual loss or damages suffered and a sum of $200 for each infringement. So if you sent 50 emails without the individual's consent, a judge could impose an additional $10,000.00 "fine."
While businesses should take notice, we shouldn't view this as an obstacle. We are all annoyed when we receive unwanted emails. But the teeth in this legislation should go a long way to reducing the amount of spam received. Businesses will have to work hard to develop an engaged list. Should businesses prove successful at building a list of recipients who find value in the information provided, they will increase their loyal customers or clients' base. In time, those lists will add value to your business and make the business more appealing to a potential buyer. We should view this new framework as an opportunity rather than "more government regulations."
This article is presented for informational purposes only. The content does not constitute legal advice or solicitation and does not create a solicitor-client relationship (this means that I am not your lawyer until we both agree that I am). If you are seeking advice on specific matters, please contact Philippe Richer at richerp@tlrlaw.ca, or 204.925.1900. We cannot consider any unsolicited information sent to the author as solicitor-client privileged (this means confidential).
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