Blame Canada: ‘CEMs’ Will Change the Way You Market13 May, 2014 By: Randal M. Shaheen, Jeffrey D. Knowles, Venable LLP’s Advertising
In late December 2013, the final version of Canada’s Anti-Spam Legislation (CASL) was published. Viewed by many as one of the world’s most stringent anti-spam laws, CASL applies to any commercial electronic message (CEM) sent within or opened in Canada. Because the prevalence of Web-based E-mail and mobile devices will make it almost impossible for marketers to segregate their Canadian consumers, U.S. direct marketers will need to examine how the new law affects their marketing practices. CASL provisions will be phased in between July 1, 2014 and July 1, 2017.
So Much More Than E-mail
Under CASL, the term “Commercial Electronic Message,” signifies commerce-related electronic messages that are “sent by any means of telecommunication, including text, sound, and voice or image message.” E-mails, text messages, social media messages and prerecorded voice messages all meet the law’s definition of a CEM. Additionally, the law lays out specific requirements for disclosures and features, such as an unsubscribe feature, that must be included in all CEMs.
Unlike U.S. CAN-SPAM statutes, the Canadian law requires consumers’ express consent to receive CEMs. By taking an “opt-in” approach, the law bars certain negative-option or “opt-out” tactics for securing consent, such as pre-checked boxes, and prohibits condition a sale on consent to receive CEMs. Valid requests for consent must include other disclosures, depending on the specific way the consent is solicited.
Penalties for failing to comply with the law are significant, with a maximum per violation penalty of $1 million (Canadian) for individuals and C$10 million for companies.
The CASL also includes a private right of action, which allows consumers and plaintiffs’ attorneys to sue allegedly noncompliant companies. This section empowers courts to award actual losses, damage and expenses incurred by the plaintiff, or the maximum amount calculated from a number of damage scenarios. The good news is that the private right of action provision of the law does not take effect until July 1, 2017, giving marketers ample time to ensure compliance.
It is worth noting that the CASL contains provisions addressing aiding and abetting the contravention of the law, as well as secondary liability for companies whose employees contravene the law in the course of their professional responsibilities.
The CASL includes a number of exemptions to the express consent requirement. These include certain existing business and non-business relationships. The law outlines, in detail, the requirements to meet these exemptions, as well as a number of transactional scenarios where the express consent requirement is waived but the format and disclosure requirements remain in force.
Given the scope of the compliance requirements, the potential damages and exposure to private lawsuits, marketers both inside and outside Canada would be well advised to consult with qualified legal counsel about the implications of the new law and how current business practices should be modified to ensure compliance.
Jeffrey D. Knowles and Randal M. Shaheen are partners in Venable LLP’s Advertising, Marketing and New Media Group. They can be reached at (202) 344-4860.