Canada: CASL Lessons Learned

Last Updated: July 22 2015
Article by Lisa R. Lifshitz

Happy Birthday, CASL!  Congratulations on celebrating your first birthday. It has been slightly more than a year since those sections of Canada's Anti-Spam Law dealing with commercial electronic messages have come into force. What have we learned from the CRTC so far? What still remains a mystery? A few observations relating to decisions from the CRTC follow.

Complaining helps

The first notice of a CASL violation involved 3510395 Canada Inc. (doing business as Compu-Finder), which was slapped with an administrative monetary penalty of $1,100,000 for repeatedly sending CEMs without recipients' consent as well as sending CEMs without a properly functioning unsubscribe mechanism. Between July 2, 2014 and Sept. 16, 2014, Compu-Finder was found to have spammed potential customers with offers of unsolicited training courses, although the company had also received complaints for its marketing activities prior to the implementation of CASL. Compu-Finder was clearly acting very badly ("flagrantly violating the basic principles of the law," in the CRTC's own words) since it apparently accounted for 26 per cent of all complaints submitted to the CRTC's Spam Reporting Centre. No wonder the CRTC chose to make an example of it. The moral here — if you act egregiously and draw too much attention to yourself, don't be surprised if you make yourself a tempting target for CRTC compliance and enforcement.

No fish too small

In the second CASL case, PlentyofFish Media Inc. (PoF), the operator of the well-known online dating web site Plenty of Fish, voluntarily entered into an undertaking with the CRTC's chief compliance and enforcement officer in order to settle several alleged violations of CASL. These included: sending CEMs to registered users of its own web site that contained an unsubscribe mechanism that was not set out "clearly and prominently" and was not able to be "readily performed." PoF was fined $48,000 and obliged to comply with and ensure that any third party authorized to send CEMs on its behalf complies with CASL, and it further agreed to implement a compliance and training program.

I admit that, when I first read this case, I was rather disappointed.  After a rousing start against a bona fide spammer such as Compu-Finder, did I really want the CRTC turning its big guns against such small fry (pun intended) as PoF, a dating web site that was mainly annoying its own members and using my tax dollars to do so? Upon reflection, I decided this case was all about sending the business community several messages. Firstly, in the interest of administrative fairness, the CRTC was making the point that CASL is not just a law that applies to large companies — even smaller ones are supposed to be adapting their business practices and behaviour to comply with the act. The message here is that the CRTC expects every entity to be compliant, no matter how small, to adopt compliance programs if necessary to meet these ends and, if not, you may get a corresponding knock on the door from the CRTC. Secondly, (and as will be discussed more fully below), if the CRTC does catch you being non-compliant, assuming that you are willing to admit your errors, publicly co-operate and mend your ways, the CRTC will definitely be more lenient toward you regarding fines, etc.

Co-operate or else

It's no surprise Compu-Finder was given a large fine by the CRTC, which will try to use this stick to encourage"changes of behaviour", while both PoF and Porter Airlines Inc., companies that voluntarily entered into undertakings in return for admitting their wrongdoings, were let off rather lightly in comparison. Lesson learned: Co-operation with the CRTC buys you goodwill, much lower fines, and even less public disclosure about what you allegedly did to contravene the law. As long as companies are willing to fall on their swords and publicly change their practices, the CRTC gets to practice leniency, since the marketing value in obtaining co-operation definitely outweighs and arguably offsets the value of levying large fines.  

In the third public CASL case so far, Porter also entered into a voluntary undertaking with the CRTC after Porter was found to have sent CEMs to e-mail addresses for which it did not have proof of consent, as well as sending CEMs that did not provide complete contact information as required under the act and regulations. Other CEMs sent by Porter either contained no unsubscribe mechanism or one that was not set out "clearly and prominently", and there was at least one instance where the unsubscribe mechanism was not given effect within 10 business days as required by CASL. It is clear Porter was also being punished for failing to obtain (and be able to evidence) proof of consent for each and every CEM it sent. As Porter's errors were considerably more serious than those of PoF, its fines ($150,000) were naturally higher, although they still fell well short of those of Compu-Finder. Porter was obliged to take corrective measures, such as updating its mailing list and ensuring that its CEMs met form requirements, as well as implementing a compliance program.

Form matters!  

It is worth noting that every single one of these early CASL decisions involved violations of the CRTC's Electronic Commerce Protection Regulations pertaining to CEMs content (i.e., Section 6(2) regarding information that must be set out in any CEM) and form (i.e., the requirement that the information be set out "clearly and prominently" and that the unsubscribe mechanism in each CEM must be "able to be readily performed. "Porter was additionally chided, for example, for sending some CEMs that contained two unsubscribe links, one of which did not function properly (the CRTC determined this to be an unsubscribe mechanism that was not clearly set out because it was not apparent which mechanism was functional). By referencing these violations, the CRTC is confirming and signaling the importance of these form requirements for CASL compliance and is again demonstrating that companies of all shapes and sizes are still universally required to comply with them.  

CRTC decisions make for lean reading

While one can try to read the CASL tea leaves, the Notice of Violations and Undertakings that have been published by the CRTC regarding CASL so far have provided absolute minimum details about the alleged violations of CASL themselves. Citing a bare minimum of facts, the decisions mainly reference which sections of CASL and its accompanying regulations, if applicable, were breached. Personally, I want to know more about how a company was unable to provide proof of consent for some of its e-mail addresses. Was it a failure to purge an old database? When preparing for CASL compliance, did the company outsource these efforts to a third-party company that got it wrong? If we are lucky, the accompanying News Release provides more detail. Without sounding ghoulish, as a practitioner in the area, more detail would be helpful so that I can at least reason by analogy as to best practices if the CRTC is not going to tell me what these are.

More guidance, please!  

Lastly and on a related point, there is still a lot that we do not know about interpreting CASL, and the CRTC is not exactly helping us. In contrast to the plethora of guidance documentation published by the Office Privacy Commissioner of Canada, the CRTC has not yet taken the time to provide meaningful interpretation bulletins, fact sheets, tools or other materials. I don't think the CRTC has even shed light on some pretty basic CASL questions (such as better defining what a CEM is) as I observed back in my first column on CASL in January 2014.

In fact, the CRTC's own FAQs say they are not meant to offer meaningful advice — even examples mentioned in its own Compliance and Enforcement Information Bulletins are not to be relied on. For example, when discussing Compliance and Enforcement Information Bulletin CRTC 2012-548, which, among other things, helps explain what information is to be included in a request for consent, the CRTC's online FAQ states that the examples used in that Bulletin "may not necessarily be appropriate in every situation. Compliance will be examined on a case-by-case basis in light of the specific circumstances of a given situation." While this kind of language provides the CRTC with a nice out, it does nothing to provide meaningful guidance to legal practitioners, individuals or businesses that are just trying to navigate some very complex legislation. As one of the CRTC's stated goals is to "deter others who may be tempted to violate the law, so they understand what is required to comply and what the consequences are if they fail", one would think that the CRTC would want to take steps to publish some meaningful commentary on the law to better achieve these ends — maybe before CASL turns two years old?

Originally published in Canadian Lawyer - July 2015

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