Canada: Revised Industry Canada Anti-Spam Regulations: Certain Concerns Of Business And Stakeholders Addressed

On January 5, 2013, Industry Canada published a revised version of its proposed regulations (the Proposed IC Regulations) under Canada's Anti-Spam Legislation (CASL). The Proposed IC Regulations are now subject to a 30-day consultation period, ending on February 4, 2013, during which all stakeholders may submit representations and comments regarding the Proposed IC Regulations to Industry Canada.

Brief Background

Designed as one of the most stringent anti-spam regimes in the world, CASL will have a significant impact on the electronic communication practices of companies in Canada as well as foreign companies sending commercial electronic messages (CEMs) to Canadians. The anti-spam provisions of CASL prohibit, subject to limited exceptions, the sending of CEMs unless the recipient has consented to receiving the message and the message meets certain form and content requirements.

The Proposed IC Regulations were published more than 18 months after Industry Canada released a first version of the regulations for public review and consultation in the summer of 2011. Serious concerns were raised by businesses and stakeholders during this initial consultation phase. For instance, many submissions noted that the initially proposed regulations did not sufficiently clarify obligations or appropriately define certain relationships in order to exempt legitimate messages from being considered spam. The Proposed IC Regulations as well as the comments on the Proposed IC Regulations are available online on the Canada Gazette website.

Rationale for Revised Regulations

Industry Canada's stated rationale for the Proposed IC Regulations is to provide clarity and legal certainty regarding key terms in CASL and to "provide relief to businesses through targeted exemptions where the broad application of the Act would otherwise impede business activities that are not within the intended scope of the legislation".

Summary of Industry Canada's Proposed IC Regulations

Industry Canada's Proposed IC Regulations:

  • provide a broader (more flexible) definition of "personal relationship";
  • essentially maintain the previously proposed definitions for "family relationship", "membership" and "club, association and voluntary organization";
  • exempt specific types of CEMs from the consent, form and content requirements of CASL;
  • exempt third party referral messages from the consent requirements of CASL, provided certain conditions are met;
  • specify the conditions under which express consent obtained on behalf of a person whose identity was unknown may be used; and
  • add certain computer programs to the existing list of specified computer programs in CASL, the installation of which a person is deemed to have expressly consented.

However, the Proposed IC Regulations do not address other concerns raised by business and stakeholders during the initial consultation period including (among others) the higher threshold set forth in CASL compared to the Personal Information Protection and Electronic Documents Act (PIPEDA) for obtaining consent. Furthermore, no exemption has been created for manufacturers to send CEMs to end users of their products, with whom they have no direct business relationship.

Definitions of Personal Relationship and Family Relationship

CASL does not apply to CEMs sent by or on behalf of an individual to another individual with whom they have a personal or family relationship. The Proposed IC Regulations define "personal relationship" as a relationship between two individuals who have had direct, voluntary, two-way communications and it would be reasonable to conclude that the relationship is personal taking into account a non-exclusive list of factors including the individuals' interests and the frequency of their communications. The relationship ceases to be personal if one individual has indicated that they do not wish to receive CEMs from the other. The new definition adds flexibility compared to the previously proposed regulations by removing the requirement to have had an in-person meeting and a two-way communication in the previous two years.

The Proposed IC Regulations essentially maintain the previously proposed definition of "family relationship", which includes certain blood relationships, marriage, common-law partnerships and adoption.

Definitions of Membership, Club, Association and Voluntary Organization

CASL states that consent to receive CEMs is implied in the context of existing non-business relationships, including where an individual is a member of a club, association or voluntary organization. The Proposed IC Regulations generally maintain the previously proposed definition of "membership" as the status of a person having been accepted as a member of a club, association or voluntary organization in accordance with its membership requirements. Clubs, associations and voluntary organizations are defined as being non-profit organizations organized and operated exclusively for social welfare, civic improvement, pleasure, recreation or other not for profit purposes or for amateur athletics.

Excluded CEMs

In response to several submissions noting that CASL impedes legitimate business activities, the Proposed IC Regulations exempt certain CEMs from the anti-spam provisions of CASL, including CEMs that are sent:

  • by an employee, representative, contractor or franchisee of an organization to another employee, representative, contractor or franchisee of the organization (i.e. intra-business) and that concern the affairs of the organization;
  • by an employee, representative, contractor or franchisee of an organization to an employee, representative, contractor or franchisee of another organization (i.e. inter-business), as long as the organizations have a business relationship at the time the message was sent and the message concerns the affairs of the organization or that person's role, functions or duties within or on behalf of the organization;
  • in response to an individual's request, inquiry or complaint or where the CEM was otherwise solicited by the person to whom the CEM is sent;
  • or caused or permitted to be sent, by organizations located outside of Canada, or sent from a computer system located outside Canada, and accessed by recipients while visiting Canada, as long as the person sending the message did not know and could not reasonably be expected to know that the message would be accessed using a computer system located in Canada, and the CEM relates to a product, good, service or organization located or provided outside of Canada; and
  • to satisfy certain legal or juridical obligations, to enforce rights and to provide certain types of notice.

Third Party Referrals

Exemptions from the consent requirements of CASL are provided in the Proposed IC Regulations in the case of CEMs sent to recipients based on referrals from third parties, as long as (i) the person who is sending the message and the person providing the referral have an existing business relationship, an existing non-business relationship, a personal relationship or a family relationship; (ii) the person to whom the message is sent and the person providing the referral have an existing business relationship, an existing non-business relationship, a personal relationship or a family relationship; and (iii) the sender provides the recipient with the name of the individual who gave the referral and includes all other identification and unsubscribe requirements set out in CASL.

Conditions for Use of Consent Obtained on Behalf of a Person Whose Identity was Unknown

CASL provides that a person may, on behalf of an unknown third party, obtain the express consent of another person to receive CEMs from the third party, as long as certain conditions set out in CASL and the regulations are met. Industry Canada's Proposed IC Regulations provide additional conditions for the use of this type of consent by third parties.

Specified Computer Programs

Under CASL, a person is considered to have expressly consented to the installation of certain types of listed computer programs where the person's conduct is such that it is reasonable to believe that they consent to the program's installation. The Proposed IC Regulations add to this list programs for which express consent may be deemed. These newly added computer programs include programs that are installed by or on behalf of telecommunications service providers to ensure the security of their networks and to update or upgrade the computer systems that constitute all or a part of such networks.

Interpretational Compliance Guidelines

Industry Canada has indicated that interpretational guidelines and other guidance materials may be published at a later date in order to further clarify the intended scope of CASL and its regulations. In the meantime, however, Industry Canada has noted that some stakeholders have interpreted CASL as applying to activities beyond its intended scope and has underscored the notion that the definition of a "commercial electronic message" is limited under CASL to a message that encourages participation in a commercial activity and is not so broad as to include all messages sent in the course of a commercial activity. Industry Canada has also commented that where social networking or instant messaging are not used to send messages to electronic addresses, such as the publication of blog posts or other publications on microblogging and social media sites, CASL would not apply.

Consultation Period and Likely Coming In To Force Date

The Proposed IC Regulations are subject to a 30-day consultation period, ending on February 4, 2013 during which all stakeholders may submit representations and comments regarding the Proposed IC Regulations to Industry Canada. After such period, the Proposed IC Regulations will likely be finalized and CASL will be one step closer to becoming law. As it stands, however, CASL's coming into force may only occur in late 2013 or early 2014. While this may appear to be a significant delay since CASL was passed by the Canadian Parliament in 2010, any wait will likely be welcomed by businesses required to implement new measures to comply with CASL's provisions.

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.

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