Canada: CASL Compliance - CRTC Gives New Guidance On Software Installation Rules

The software installation rules under Canada's Anti-Spam Legislation (CASL), discussed in our November 7, 2014 bulletin, come into force on January 15, 2015. Their broad and often unclear wording poses significant challenges to businesses trying to get ready for CASL's second wave.

In an effort to mitigate these challenges, on November 10, 2014, the Canadian Radio-television Telecommunications Commission (CRTC) published its much-anticipated plain language guidance on these rules entitled CASL Requirements for Installing Computer Programs (the Guidance). Shortly after that, senior CRTC staff (as part of a limited cross-Canada outreach effort) gave further guidance via live presentations on the Guidance to the members of various industry associations that included presentations in Toronto from November 10th to 12th, 2014. Next week, the CRTC takes its CASL tour to other Canadian cities, including Vancouver.

This bulletin alerts businesses to the highlights of the Guidance. In particular, it discusses where the CRTC seems to have "hit the mark" with just-in-time and pragmatic interpretations of the CASL software installation rules. This bulletin also notes where further guidance from the CRTC has been requested by business and, according to the CRTC, is in the works and will be forthcoming. All the quotes referenced throughout the bulletin, except where indicated, are from the CRTC's online Guidance article listed above.

Highlights of the Guidance

1. Is self-installed software caught by CASL? Is firmware self-installed?

CASL does not apply to owners or authorized users (together, users) installing computer programs on their own computer systems. CASL only applies when you install or cause the installation of a computer program on another person's device in the course of commercial activity. The Guidance gives the following examples of self-installed software not covered by CASL:

  • an app is purchased and downloaded to a mobile device from an app store;
  • software on a CD is purchased from a store and installed on a computer;
  • software from a website is downloaded and installed on a device;
  • software is installed by a small business on its devices used by its employees; and
  • a previously-installed app offers an update, and the user installs the update. However, in this case, the Guidelines state that if the app installs the update in the background, without prompting or informing the user, then CASL applies.

Also, during the November 12th presentation, CRTC staff said that, in most cases:

(a) firmware will be treated as not being caught by CASL because the manufacturer (as owner) self-installs the software on the device at the time of its manufacture;

(b) if properly documented, the manufacturer may also include an express consent to receive all firmware upgrades and updates (that said, the CRTC did not clarify where and how this consent may be documented – or even who would give this consent, given that the manufacturer's self-installation is not covered by CASL); and

(c) at purchase, the benefit of self-installation and any consents for upgrades and updates transfer from the manufacturer to the buyer.

2. What is meant by "cause the installation" of software?

While the CRTC does not attempt to give a full answer to this question, the Guidance offers two examples of computer programs that are "caused to be installed". The covert nature of the installation is the main common element.

  • Malware covertly installed: "Sometimes, malicious software (malware) is installed along with other software. For example, a free Tic Tac Toe app may include concealed malware that is not disclosed to the user. In this situation, the user would be installing the Tic Tac Toe app, so CASL would not apply. However, CASL would apply to the installation of the malware since the software developer would be causing it to be installed"; and
  • Legitimate software covertly installed: "A consumer purchases a music CD and inserts it in their computer to listen to music or copy songs. However, the CD includes concealed software that is automatically executed when the CD is inserted into the computer. In that case, the distributor or developer would have caused the software to be installed." Though we wonder whether automatically executing software that is on the CD, or even software that is temporarily copied onto the computer in order to play the CD, qualifies as the sort of installation that CASL is meant to address.

At their presentation in Toronto on November 12th, CRTC staff confirmed that the CRTC is considering providing more detailed guidance on the meaning of "cause the installation" by clarifying when a computer program or function is "secondary" (as opposed to "primary") and when its installation is "undisclosed" (i.e., surreptitious).

3. When is it "reasonable to believe" that the user has consented under CASL's "deemed consent" rules?

The CRTC does not give a full answer to this question, but gives the following helpful examples regarding JavaScript and cookies (two of the types of computer programs to which the "deemed consent" rules apply):

  • if the person disables JavaScript in their browser, you would not be considered to have consent to install JavaScript programs under CASL since their conduct would not indicate that they consent to that type of program; and
  • similarly, if the person disables cookies in their browser, you would not be considered to have consent to install cookies. However, this is not entirely consistent with previous CRTC guidance that cookies are not subject to the installation prohibition because they are not "installed", nor is it consistent with previous Industry Canada guidance that cookies are not subject to CASL at all because they are not "computer programs". Disabling cookies in a browser does not mean cookies will not be placed on the user's computer ("super cookies", for example, are not necessarily affected by browser settings), and also does not necessarily mean that placing cookies on a computer system is a CASL breach.

4. Are pre-CASL express consents grandfathered as CASL-compliant express consents after January 15, 2015?

Like its enforcement policy respecting CASL's anti-spam rules, the CRTC confirmed it has made the policy decision that valid express consents to install computer programs obtained before January 15, 2015 will be grandfathered as CASL-compliant express consents after January 15, 2015. That said, how this policy will be applied to shrink-wrap and browser-wrap agreements remains to be seen and will likely be subject to further reflection and written guidance from the CRTC.

5. What is meant by some of CASL's key technical terms?

The Guidance provides the following clarifications.

  • What's a cookie? "Cookies are non-executable computer programs that cannot carry viruses and install malware". Again, this definition adds to rather than reduces the confusion around cookies, since CASL's "computer program" definition (actually found in the Criminal Code) specifically includes the concept of being executable. For CASL purposes, therefore, arguably anything that is non-executable is not a "computer program".
  • What's an operating system? "Operating systems are a type of computer program that have special access to the hardware of a computer system, and act as a platform to allow other computer programs to make use of the hardware. Examples of operating systems include Microsoft Windows, Mac OS/iOS, Linux, Android, Unix and Blackberry OS, among others. They also include operating systems in your car (e.g., that control braking systems)".
  • What's a telecommunications service provider (TSP)? Under CASL "a 'TSP' means any business or person who, independently or as part of a group or association, provides telecommunications services. Unlike other definitions, such as that in the Telecommunications Act, CASL does not require the TSP to own or lease the equipment or software used to provide the service. For example, automobile manufacturers are TSPs for CASL purposes when their vehicles include wireless telecommunications functionality".
  • What does it mean to "correct a failure"? " 'Correcting a failure' includes taking steps to ensure the safe and proper functioning of the computer programs and the systems they operate. This includes both reactive and proactive steps, so long as they are consistent with consumer expectations. As an example, to 'correct a failure' may include a patch designed to fix a security vulnerability or a software error, flaw, failure or fault in a computer program or system that causes it to produce an incorrect or unexpected result or to behave in unintended ways".
  • What is an update or upgrade and what is not? "An update or upgrade is generally a replacement of software with a newer or better version, in order to bring the system up to date or to improve its characteristics ... An update or upgrade makes changes to or replaces previously installed software. Retrieving current information and displaying it within a program is not considered to be updating the program within the context of CASL. For example, updating or refreshing information displayed in a program, such as refreshing the weather forecast in a weather app, or refreshing television listings in an electronic programming guide are not updates or upgrades for the purposes of CASL".

At their presentation in Toronto on November 12th, CRTC staff confirmed the following (not mentioned in the Guidance):

  • JavaScript - There is a small typographical (but big substantive) error in the English version of section 10(8)(a)(ii) of CASL that evidently will be corrected, if not by a technical amendment to the statute itself, at least by the CRTC's interpretation and enforcement of the statute – i.e., according to the CRTC, "JavaScripts" should read "JavaScript" (as it does in the French version of CASL). The former is a well-known and robust programming language that captures standalone "Java" apps. The latter is a scripting tool that uses fairly minimal, non-persistent language to facilitate interactions on webpages and the like; and
  • Network - the CRTC is open to responding to industry requests for guidance clarifying any important terms in CASL, such as "network" that has an impact on the scope of the deemed consent rules. 

6. How can consent be obtained?

The Guidance states that you must have consent to install software on another person's computer. If you do not have "deemed consent", you must request consent before installing the software. When seeking consent for the installation you must clearly and simply set out:

  • the reason you are seeking consent;
  • who is seeking consent (i.e., the name of the organization; or if consent is sought on behalf of another person, that person's name);
  • if consent is sought on behalf of another person, a statement indicating which person is seeking consent and which person on whose behalf consent is being sought;
  • the mailing address and one other piece of contact information (i.e., telephone number, email address, or web address);
  • a statement indicating that the person whose consent is sought can withdraw their consent; and
  • a description in general terms of the functions and purpose of the software to be installed.

The person who has obtained consent has the responsibility to prove it – that is, the person who seeks consent should keep a record of it.

7. For the purposes of seeking consent, who is the "owner" and who is the "authorized user"?

In answering this question, the Guidance offers the following non-exhaustive list of examples:

  • in the context of an employment relationship, the employer would be the owner and the employee would be the authorized user;
  • if an individual owns a computer but provides it to their child, spouse, or other relative for their sole use, the child, spouse or other relative is the authorized user of the computer (although the Guidance does not indicate whether and how a minor child can give valid consent);
  • if someone leases a device, the lessor will retain ownership of the device for the purposes of CASL and the lessee is the authorized user; and
  • if a device is sent out for repair, the person conducting the repair is an authorized user under CASL, but only to the extent that they perform the agreed-upon repairs to the device. 

8. What additional disclosure requirements are there for intrusive software?

The Guidance states that you must disclose additional information when seeking consent if the computer program performs one or more of the following "intrusive" functions that users would not normally expect:

  • collects personal information;
  • interferes with the user's control of the device;
  • changes or interferes with the user's settings, preferences or commands without their knowledge;
  • changes or interferes with the data stored on the device in a way that obstructs, interrupts or interferes with the user's access to the data;
  • causes the computer system to connect to or send messages to other computer systems without the user's authorization; and
  • installs a program that may be activated by a third party without the user's knowledge.

When installing software that performs any of the functions listed above, the installer must clearly and prominently, as well as separate and apart from the licence agreement:

  • describe to the user what the program does in relation to those functions and why it does it; and
  • describe to the user the impact of those functions on the operation of the computer system.

All of this must be done prior to the installation of the computer program.

The Guidance gives the following example to illustrate these requirements: "Suppose you develop a gaming app for a smartphone or tablet that includes functionality to collect information from the GPS, camera and microphone that would not normally be expected by the user. You would need consent if you were installing the app on another person's computer. While CASL may not require you to seek consent when the user installs the app themselves, you may wish to seek consent under CASL in order to install updates at a later date. If you were seeking consent in this situation, you would be required to disclose that unexpected functionality as described above. Therefore, when seeking consent, you would have to describe to the user why the game collects that information and what it does with it. This description would need to be provided in a clear fashion, separate and apart from the terms and conditions or end-user licensing agreement."

This example begs the question of how consents work with automatic or self-installed updates; fortunately, that question is addressed in section 10 below.

9. When is assistance required for uninstalling software?

The Guidance confirms that if the software functions require the disclosure of additional information when seeking consent, then you also need to provide assistance with uninstalling the software. Only in very specific circumstances would you be required under CASL to assist somebody to remove or disable software from their computer.

The circumstance arises when the software performs one of the "invasive" functions listed above (e.g., collects personal information), and the user believes that the function or impact of the software was inaccurately described to them. The Guidance does not clarify whether the standard of the average user's belief is the objectively determined "reasonable" user, the objectively determined "credulous" user, or some other standard (such as the "subjectively determined Luddite").

In that instance, the user can request, within one year after the software is installed, that you assist in disabling or removing the software. This must be done as soon as feasible and at no cost to the user. In addition, for one year after installation you must provide the person who consented to the installation with an electronic address where they can send the request to remove or disable the program.

10. What consent is needed for a software update or upgrade?

The Guidance provides the following options for obtaining consent for updates and upgrades:

  • when you get the initial consent to install the original computer program, you can also seek consent for all future updates and upgrades;
  • consent can be deemed for updates and upgrades to the specified computer programs discussed above (such as cookies and operating systems);
  • if the program was self-installed by the device owner or authorized user and you didn't get consent for updates or upgrades at the time of original installation, you will need to seek consent to install any updates or upgrades. You can do this in the same way that you would generally seek consent to install software; and
  • under CASL's implied consent and transition rules, you can update or upgrade computer programs until January 15, 2018, without express consent, if the program was installed on the computer system prior to January 15, 2015.

By way of example, the Guidance states that, "if a person installs an app from an app store on their own device, CASL would not apply. As a result, their consent for future updates may not have been requested by the app developer. If the software developer wishes to install an update to the app at a later date, they must obtain the person's consent to do so. Alternatively, when the user self-installs the app, the developer can use that opportunity to request consent to automatically install future updates".

This highlights the continued uncertainty around the difference between "self-installation" and "causing to be installed".

While the Guidance did not specifically address automatic updates that occur as a result of user-controlled device settings, in their presentation on November 12th, the CRTC staff seemed open to the suggestion that, in many instances, automatic updates arising from the user-controlled settings of an informed user should be treated the same as the user's original self-installation of the software – i.e., they fall outside of CASL. (But given the CRTC's approach to "causing to be installed" discussed above, presumably they would only fall outside of CASL if the updates did not add new unexpected functionality). The current trend towards continuous and seamless installation of software upgrades may require the CRTC to issue further guidance in this area.

11. When is consent implied?

Under CASL, if a computer program was installed on a person's computer system before January 15, 2015, the person's consent to the installation of an upgrade or update is implied until January 15, 2018, unless the person notifies you that they no longer consent to the installation of future updates or upgrades.

If you obtained valid express consent prior to January 15, 2015, you will be able to rely on that as express consent for the purpose of section 8 of the Act. It is important to note that the onus of proving consent rests with the person installing the computer program.

12. How will the CRTC allocate liability for violating CASL's software installation rules?

There is ongoing concern and uncertainty about how responsibility and liability for complying with CASL's software installation rules is allocated between software developers and distributors/vendors. At the Toronto presentation on November 12th, the CRTC staff indicated that further guidance on this issue is being prepared and will soon be posted.

In a key slide of the Toronto presentation (not yet distributed or available on the CRTC's website), the CRTC staff suggested the answer set forth below to the following question: "As between the software developer and software vendor, who is liable for complying with CASL's software installation rules?":

"Both may be liable depending on the facts. To determine liability, the CRTC will examine:

(1) Was their action a necessary cause leading to the installation?

(2) Was their action reasonably proximate to the installation?

(3) Was their action sufficiently important toward the end result of causing the installation of the computer program?"

Unfortunately, this broad and vague answer may not give vendors (i.e., those who operate app stores, etc.) much comfort. For example, despite any contractual terms agreed between developers and vendors, arguably a vendor "causes" an installation by making a software program available for download from the vendor's app store. This is not consistent with, for example, the approach to ISP liability under copyright law, or with CASL's purpose of encouraging the use of electronic means to carry out commercial activities. Without more specific guidance from the CRTC, some vendors may be spooked from the Canadian market.

CRTC Guidance Helpful But Work Continues

In the Guidance, the CRTC has given pragmatic and helpful guidance for dealing with many of the difficult issues regarding the application and interpretation of CASL's complex and ambiguous software installation rules. The Guidance goes a long way in giving businesses the information and tools they need to get ready for CASL's second wave. But, as even the CRTC staff conceded, much more work (some of which is highlighted above) must still be done.

Visit the Davis LLP CASL Resource Centre

Looking for more information on Canada's anti-spam legislation? Check out our CASL Resource Centre to get answers on compliance measures and relevant updates.

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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