On December 4, 2013, the Minister of Industry, James Moore announced that Canada's anti-spam law
(the "Act") will begin to take effect on July 1, 2014.
This announcement has arrived nearly 3 years after the Act
received royal assent. The finalization of the regulations
under the Act triggered Mr. Moore's announcement.
The Act will come into force in stages. The spam
provisions will take effect on July 1, 2014, the
software provisions will take effect on January 15, 2015, and the
private right of action takes effect on July 1, 2017.
The Act is aimed at encouraging growth and efficiency of
electronic commerce by creating a scheme which eliminates conduct
which would decrease confidence and trust in the on-line
marketplace. The Act represents a "pro-consumer"
response to unwanted electronic marketing schemes which invade our
day to day electronic lives.
At the core of the Act is the general rule against sending
commercial electronic messages unless the person sending the
message has obtained the consent of the recipient. As with
most law, there are exceptions to the general rule. The
exceptions are found both in the Act and the regulations.
The key takeaway is that the general rule creates an
"opt-in" system, putting the onus on the sender of a
commercial electronic message to actively obtain the express
consent of the recipient. If express consent is not obtained,
the sender of a commercial electronic message must then rely on
implied consent or an exception to express consent.
The Act applies to the practice of sending commercial
electronic messages ("CEMs") which are electronic
messages that encourage participation in a commercial activity by
the text, hyperlinks, or contact information contained therein.
An example of a CEM would be an email soliciting business.
The Act also applies to the installation of computer programs
in the course of a commercial activity.
Businesses that wish to engage in sending CEMs after the Act
comes into force would be wise to start obtaining the consent of
the individuals and business on its contact list. After July
1, 2014 it will be more difficult to obtain consent through
electronic communication as an email requesting consent would
likely be considered a CEM. This being said, there will be a
transitional period after the Act takes effect in order to allow
businesses to have enough time to bring their practices into
compliance with the Act and regulations. The transitional
period will start when the Act comes into force and will continue
for three years. During this time, consent to send CEMs will be
implied in the case of certain pre-existing relationships (see
section 66 of the Act). The transition period will also apply
to the installation of updates and upgrades to computer programs.
The transitional provisions will cease to apply if consent is
Not only must a business have the consent of a
recipient to send a CEM but the CEM must also have: (i) information
identifying the person sending the CEM, (ii) contact information
for the person sending the CEM, and (iii) an unsubscribe mechanism
clearly and prominently displayed.
Some notable exceptions to the requirement for consent are
available in the following situations:
The CEM is sent by a charity or political party
The communication is between businesses with an active relationship
and the message concerns the activities of the recipient
Third party referrals for the first CEM
The CEM is sent due to a legal obligation or to enforce a legal
If the sender and recipient are family or have a personal
Consent may be implied in certain situations. One
notable situation of implied consent arises if a recipient has
conspicuously published its electronic address which is not
accompanied by a statement that the person does not wish to receive
Note that this is a law with serious
consequences. A person who violates the anti-spam and
software provisions of the Act (sections 6 to 9) will be liable to
pay an administrative penalty. The maximum penalty in the
case of an individual is $1,000,000 and the maximum penalty in the
case of any other person (e.g. businesses) is $10,000,000.
Software license agreements generally require the customer to pay fees for the software license and related services, which fees are usually based upon the duration of the license and the manner in which the customer is allowed to use the software, together with applicable taxes and withholdings.
In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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