Complying With CASL’s Computer Program Provisions - Data Protection

The computer software provisions of Canada's Anti-Spam Legislation (CASL) come into effect on Jan. 15, 2015. While these provisions are aimed at preventing the installation of unauthorized malware and spyware computer programs, they have varying degrees of impact on all types of software applications.

Section 8 of CASL requires express consent to install a computer program on another person's computer system in the course of commercial activity. Enhanced disclosure and consent requirements apply where the software performs certain prescribed functions. Breach of these requirements can result in fines of up $10,000,000 for organizations, or $1,000,000 for individuals. As well, employers may be held vicariously liable under CASL for their employee's actions.

The Canadian Radio-television and Telecommunications Commission (CRTC) released guidance on these provisions on Nov. 10, 2014 (CRTC Guidelines). The CRTC has indicated that further guidance on CASL's computer program provisions can be expected in the future.

While the CRTC Guidelines do not have the force of law, they indicate how the CRTC plans to interpret these provisions in practice. The following is an outline of CASL's computer software provisions in light of the CRTC Guidelines as they are on the date of this article.

When Does CASL Require Consent to Install a Computer Program?
CASL's Computer Program Consent Requirements
Deemed Consent
Additional Disclosure and Consent Requirements for Certain Computer Programs
Additional Obligations In Respect of Certain Computer Programs
Updates and Upgrades
Transition Provisions

1. When Does CASL Require Consent to Install a Computer Program?

Section 8 of CASL requires anyone that installs, or causes to be installed, a computer program on another person's computer system in Canada, in the course of commercial activity, to ensure they obtain the express consent of the owner or an authorized user of the computer system in the manner prescribed by CASL.

The application of CASL's software provisions does not stop at Canada's borders. Section 8 of CASL applies to anyone who installs software in Canada, and to persons inside Canada who install software on computer systems outside of Canada. In both cases the installation must be done in the course of commercial activity for CASL's software provisions to apply.

CASL uses the terms "computer system" and "computer program" in a broad sense. Under CASL, a "computer system" means a device or a group of interconnected or related devices that contains computer programs or other data and that performs a logic and control function pursuant to computer programs . As a result, computer systems may include automobiles, industrial equipment, smart appliances and other consumer products which may not normally be considered to constitute "computer systems". CASL considers "computer programs" to include both software applications and updates to them.

As noted above, section 8 of CASL applies to anyone who installs or causes to be installed a computer program on another person's computer system in Canada, in the course of commercial activity. The terms "install" and "causes to be installed" are not defined in CASL and are not immediately clear when reading CASL. Fortunately, the CRTC Guidelines shed some much-needed light on how the CRTC intends to interpret these key terms.

The CRTC Guidelines clearly state that "self-installed software is not covered under CASL". The CRTC Guidelines illustrate this statement with the following scenarios.

According to the CRTC, CASL does not apply where the owner or authorized user of a computer system downloads software for installation on their computer system. In addition, CASL will not apply to software updates they install for those programs.

The CRTC Guidelines also indicate that, where the owner or authorized user of a computer system purchases software on CD and installs it on their computer system, CASL will not apply.

There is an important caveat to the CRTC's interpretation that self-installed software is not subject to section 8 of CASL. The CRTC only applies this interpretation to software that the owner or authorized user of a computer system intentionally self-installs. CASL applies where a computer program or a subset of a program is installed without the knowledge of the owner or authorized user of the computer system.

The CRTC Guidelines provide some examples of where a computer program will be considered to be installed on a computer system without the knowledge of the owner or authorized user of the computer system. The owner or authorized user of the computer system might intentionally install computer program A on their computer system, while computer program B lurks, concealed within computer program A, and is surreptitiously installed along with computer program A.

Another example exists where a consumer inserts a music CD in his or her computer to listen to music, and software that is concealed on the disc is automatically installed on the computer. In this scenario, the software would not have been "self-installed" by the consumer. According to the CRTC, in that case, the software distributor or developer would have caused the software to be installed.

CASL also applies where a previously-installed computer program causes updates to be installed automatically without the user's knowledge and intent. This is a very important point for software vendors and distributors to keep in mind. If updates and upgrades to previously installed computer programs are not intentionally self-installed by the owner or authorized user of the computer system, CASL will apply and express consent will be required.

As a result, computer software vendors and distributors that wish to avoid the application of CASL's computer software provisions should take care to ensure the software they sell or distribute, via download , optical disk or other means, is adequately described to the purchaser in advance of the purchaser's self-installation of it, to ensure the software may be considered to be intentionally "self-installed" by the purchaser.

2. CASL's Computer Program Consent Requirements

According to the CRTC Guidelines, where a computer program that is installed in the course of commercial activity is not "self-installed", the person that installs the computer program or causes it to be installed must obtain the express consent of the computer system's owner or authorized user.

Where such consent is required under CASL, it must be obtained before the software is installed. CASL requires the following to be clearly and simply set out when consent to install a computer program is sought:

the reason consent is sought,
the mailing address and one other piece of contact information (i.e., telephone number, email address, or Web address) that identifies the person seeking consent and any person on whose behalf consent is sought,
a statement indicating that the person whose consent is sought can withdraw their consent, and
the function and purpose of the computer program to be installed.¹

The person that obtains such a consent should keep a record of it, as that person will bear the onus of proving the consent once the computer program is installed.

3. Deemed Consent

CASL deems the owner or authorized user of a computer system to have expressly consented to the installation of a computer program, if that person's conduct is such that it is reasonable to believe that he or she consents to the installation, and the computer program is:

a cookie,
HTML,
JavaScript,
an operating system,
a program that is executable only though another computer program to which the user has already expressly consented,
software installed by a telecommunications service provider solely to a protect the security of all or part of its network from a current and identifiable threat or to update or upgrade all or part of its network, or
software installed solely to correct a failure in a computer system or a program installed on it.

The CRTC Guidelines provide some examples of when the CRTC will consider it not reasonable to believe a person has consented to the installation of the prescribed software. If the person disables Javascript in their browser, the person will not be deemed to have provided the consent required by CASL to the installation of Javascript.

Further, if the owner or authorized user of a computer system disabled cookies in their browser, they will not be deemed to have given the consent required by CASL to permit someone to install cookies on their computer system (assuming the "cookies" constitute computer programs that will be installed subject to CASL – which is questionable given that most cookies' are not executable computer programs).

With respect to the exception for telecommunications service providers that is listed above, it should be noted that the term "telecommunications service providers" is given broad meaning. For CASL's purposes, a "telecommunications service provider" includes any persons who, together or independently, provide a telecommunications service, notwithstanding that they might not own or lease the equipment or software used to provide the service.

The CRTC Guidelines also shed some light on the meaning of "operating system". They provide that an "operating system" is a type of computer program that has special access to the hardware of a computer system, and acts as a platform to allow other computer programs to make use of the hardware. The CRTC Guidelines go on to state that operating systems "include operating systems in your car (e.g. that control braking systems)". While this comment will be of interest to automobile manufacturers seeking to update and upgrade software in customer automobiles, the CRTC Guidelines do not clarify whether the software in automobiles must also act as a platform for other computer programs to make use of hardware to qualify for the "operating system" exception.

4. Additional Disclosure and Consent Requirements for Certain Computer Programs

CASL imposes additional disclosure and consent obligations where the computer program that is being installed performs any one of a list of prescribed functions, provided the person installing the computer program knows and intends such functions will cause the computer system to operate in a manner that is contrary to the reasonable expectations of the owner or authorized user of the computer system.

The prescribed computer program functions are:

collecting personal information stored on the computer system,
interfering with the user's control of the computer system,
changing or interfering with settings, preferences or commands already installed or stored on the computer system without the knowledge of the user,
changing or interfering with data that is stored on the computer system in a manner that obstructs, interrupts or interferes with lawful access to or use of the computer system,
causing the computer system to communicate with another computer system without authorization,
installing a computer program that may be activated by a third party without the knowledge of the user, and
performing any other function listed in the CASL's Regulations.

When the foregoing applies, the person seeking to install the computer program must provide the owner or authorized user of the computer system with a description of the material elements of the computer program that perform the specified function(s), including the nature and purpose of those elements, and their foreseeable impact. These elements must be brought to the attention of the owner or authorized user of the computer system clearly and prominently, separate from other information provided in a request for consent, and separate from the software licence agreement.

The person seeking to install the computer program must also obtain written acknowledgement (in paper or electronic form) from the person from whom consent is sought that they understand and agree that the program performs the specified functions. The request for consent must not be bundled with requests for consent to general terms and conditions of use or sale and must be separate from any consent requested under CASL's commercial electronic message provisions.

CASL provides an exception to these enhanced consent and disclosure requirements where the specified computer program function only collects, uses or communicates transmission data. For CASL's purposes, "transmission data" means data that:

relates to the telecommunications functions of dialing, routing, addressing or signalling,
is transmitted to identify, activate or configure an apparatus or device (including computer program), to establish or maintain a communication, or is generated during the creation, transmission or reception of a communication and identifies or purports to identify the type, direction, date, time, duration, size, origin, destination or termination of the communication, and
does not reveal the substance, meaning or purpose of the communication.

5. Additional Obligations In Respect of Certain Computer Programs

CASL imposes additional obligations on a person who installs a computer program on another person's computer such that the "enhanced disclosure and consent" requirements outlined above apply.

For one year after such installation, the person who installed such a computer program must ensure the consenting person is provided with an electronic address through which to request the program be removed or disabled if the requestor believes that the function, purpose or impact of the computer program was not accurately described when consent was requested.

If the consent was given based on an inaccurate description of the program's material elements, then the person who installed the program must assist the person that gave the consent to remove or disable the computer program as soon as feasible, without cost to the person that gave the consent. The assistance is required where the person who gave the consent requests it within one year after installation of the computer program.

6. Updates and Upgrades

Software updates and upgrades involve the replacement or supplementation of a computer program's software with newer software in order to improve the program or bring it up to date.

According to the CRTC Guidelines, for CASL to apply to an update or upgrade, a previously installed computer program must be replaced or changed. Updating or refreshing information displayed in the computer program, such as refreshing television listings that are displayed in an electronic programming guide, will not be considered to be an update or upgrade for the purposes of CASL.

Where an update or upgrade is being installed on someone else's computer in the course of commercial activity, the consent of the owner or authorized user of the computer must be obtained in accordance with CASL. For this purpose, software vendors and distributors should consider obtaining consent for all future updates and upgrades when the initial consent to install the original computer program is obtained.

According to the CRTC Guidelines, consent can be assumed where the update or upgrade is being made to a computer program for which consent is deemed by CASL, as discussed in section 3 above (i.e. cookies and operating systems).

7. Transition Provisions

CASL provides a transition period with respect to updates and upgrades to computer programs that were installed prior to the effective date of CASL's computer software provisions. Programs that were installed prior to Jan. 15, 2015 may be upgraded or updated without express consent until Jan. 15, 2018. In these circumstances, CASL provides that the necessary consent is implied. However, if the computer system's owner or authorized user withdraws their implied consent with respect to such updates and upgrades, their choice must be respected. After the expiry of the three-year transition period, express consent will be required to install updates and upgrades to existing computer programs, except where one of the other exceptions applies.

Furthermore, the CRTC Guidance indicates that "valid, express" consents provided prior to Jan. 15, 2015 with respect to the installation of a computer program may be relied on after Jan. 15, 2015. So if express consent to software updates and upgrades was obtained prior to Jan. 15, 2015, then that consent can be grandfathered under CASL. However, it is important to note that the onus of proving the consent rests on the party seeking to rely on the consent.

Footnote

1. CASL, section s. 10(1) and 10(3).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Canada: Complying With CASL’s Computer Program Provisions