Canada: Wishing You Happy Holidays, If Canada's Anti-Spam Law Permits

Last Updated: November 7 2015
Article by Martin P.J. Kratz and Graeme S. Harrison

The holiday season is an important season to focus on good will and the profound messages that the holidays celebrate. Many organizations use the holiday season to communicate with clients and associates to share that sentiment. For example, an organization may wish to invite individuals to a holiday-themed party, or simply send a seasonal greeting. What many organizations may not have considered is whether these benign-seeming messages will attract seven-figure liability.

Canada's Anti-Spam Law, more commonly known as CASL, generally provides that a sender must obtain the consent of a recipient before sending a commercial electronic message, or CEM, to that recipient. Exemptions might also apply.

The threshold question for an organization to consider here is whether an invitation to a holiday-themed party, or even a simple greeting, constitutes a CEM for the purposes of CASL. Like so many aspects of CASL, answering this question is not straight forward.

CASL defines a CEM to include any electronic message that "it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity." The term "commercial activity" is defined to mean any act or conduct of a commercial character. While no court has as of yet interpreted the intended scope of this term, a broad reading suggests that it might include holiday-themed messages sent from an organization to its business affiliates intended to promote the relationship. By contrast, use of the interpretive approach that provides that an unclear word's meaning may be known from the accompanying words, suggests the provision may be construed by its relation to other terms in the list of activities which are deemed commercial, namely "offers to purchase, sell, barter or lease a product, goods, a service...". In that case, it seems unlikely that a bare holiday greeting, absent further commercial content, would have as its purpose the encouragement of participation in a "commercial activity." However, the term "one of its purposes" complicates this analysis.

In some instances, organizations send holiday greetings—and may also host holiday themed events—for multiple purposes, including marketing, and may include in the content of the message marketing language or promotions. If we read "one of its purposes" very broadly, then it may be the case that a holiday greeting sent primarily for altruistic purposes or the expression of good will would nevertheless be captured, as it would have as "one of its purposes" marketing. If we interpret the term more narrowly, then the range of messages captured may shrink—for example, a party invitation where a product will be demonstrated may continue to fall within the definition, while a simple greeting may not.

Further complicating this matter, the CRTC—which enforces CASL—has made only limited statements on how it interprets the definition of a CEM. For example, in cross-Canada information sessions conducted in 2014, prior to the implementation of CASL, the CRTC took the view that sending a mere informational report, without more, such as a report on a case or a new law, is not a CEM, even if a firm had its logo and a link to its website on the message. If that public announcement reflects the approach that is adopted in practice and confirmed by the Courts, then it suggests a more pragmatic and less expansive approach to the interpretation of commercial intent. However, the CRTC has not made further or written statements on its position since 2014. Further, its enforcement history to date suggests that technical violations—such as a difficult-to-use unsubscribe mechanism in the case of Plenty of Fish—may attract scrutiny.

If an organization determines that its holiday greeting does suggest any meaningful encouragement of commercial activity, then such greeting may constitute a CEM. The next question to consider is whether or not CASL exempts the message from the general rule. Depending on the facts, a number of exemptions may apply. For example, in the event that the sender and the recipient have a "personal relationship," as narrowly defined in the legislation, then no consent will be necessary to send the holiday greeting. Similarly, registered charities may find that their holiday greetings are exempt in the event that such messages have as their primary purpose the raising of funds—this exemption will likely apply more where a request for donation accompanies a holiday greeting.

The "business to business" exemption may also apply in a number of situations. This provision exempts CEMs sent by employees or representatives of an organization to employees or representatives of another organization, provided that the organizations have a relationship and the message concerns the activities of the recipient organization. In the situation where an organization sends a bare holiday greeting to the personnel of a business affiliate, it would be difficult to argue that this exemption does not apply. The question turns on whether building good will, or otherwise encouraging employees to network with the employees of business associates, constitutes an activity of the recipient organization. In most cases, it is suggested that networking and relationship management constitute business activities in which we suggest almost all organizations participate. Of course there may be outlying situations in which such activities do not constitute activities of a recipient organization. We further note that this conclusion assumes that the sender organization and the recipient organization have had dealings sufficient to constitute a "relationship," a term which unhelpfully has not been defined. Senders should not rely on this exemption to spam employees of unrelated third parties.

In the event that no exemption applies, an organization wishing to send a holiday greeting which is likely a CEM will need to comply with the consent provisions of CASL.

CASL recognizes two kinds of consent—express and implied. The former requires a positive action on behalf of a recipient, while the latter arises in certain factual situations. Fortunately, in contemplation of CASL coming into force last year, many organizations attempted to do two things: (1) determine whether implied consent existed for some or all members of the organizational "rolodex;" and (2) seek express consent from those individuals for whom implied consent did not exist. Further, once CASL came into force, many organizations pruned non-consenting addresses from their contact lists.

As a result of this due diligence, many organizations are reasonably comfortable that they hold some type of consent for all individuals on their mailing lists. For these organizations, sending non-exempt holiday greetings that are CEMs will require little extra effort. However, in the event that an organization has not undertaken due diligence in respect of its lists, or in the situation where an organization has a separate list for holiday-themed greetings—for example, party invitations—that organization will need to undertake further due diligence before moving forward.

Finally, all organizations that determine their holiday greetings constitute non-exempt CEMs will need to satisfy the required formalities and disclosures under CASL.

What is the best approach to compliance here? It seems less likely—though not impossible—that the CRTC will interpret CASL in any way that results in a prohibition on the sending of legitimate benign holiday greetings. Such a position may well raise constitutional issues that may well result in assessment of the legislation in light of fundamental constitutional protections, such as free speech, by the Courts. It seems perhaps possible that the CRTC will adopt a moderate approach with respect to benign holiday greetings just as has been the case for the CRTC's public position on mere factual reports taken in 2014.

Given that many organizations have already chosen to undertake due diligence with respect to their mailing lists, the question of non-compliance may not even arise for those organizations. As such, it seems that, in many cases, holiday cheer will continue to flow. For those organizations which have not developed their compliance programs, the consideration of doing so for their holiday mailings may help them get to a cheerier place for the New Year and thereafter. 2017 is not too far off, and the likely commencement of private actions and class action law suits mean all organizations should ensure they are well prepared.

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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Martin P.J. Kratz
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