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WebFuel welcomes back James Katz, Ottawa Lawyer with BrazeauSellers as a guest blogger. This is his seventh blog post in a regular series related to Internet issues in Canada. While this topic, unlike previous posts, is not related to Search, it addresses a new law that will have an impact on Canadian businesses that participate in outbound electronic communications.

Guest Post by: James Katz 

Canada’s new anti-spam legislation is expected to come into force early in 2013. The main thrust of the Act will be the regulation of how businesses use “electronic means” (that is, email) as part of their business activities. Compliance with the Act will be investigated and enforced by various government agencies, including the Commissioner of Competition. Further, those targeted by spam email will also have a private law cause of action against those who are responsible.

In preparation for the coming into force of the Act, the key elements that all businesses that use email as part of their customer service and/or marketing efforts (especially those that carry on business on the Internet in whole or in part) are outlined below.

1.  Almost all business-like email communications are regulated by the Act

Although the Act regulated the sending of “commercial electronic messages”, it in fact generally makes it illegal to send any unsolicited emails for commercial purposes, regardless of quantity.  “Commercial electronic message” is broadly defined to include a message that as “one of its purposes, [is] to encourage participation in a commercial activity”. The term “commercial activity” is also broadly defined by the Act, and essentially includes all activities with a commercial character, including offers to buy and sell property, offers to provide a business, investment or gaming opportunity, or emails that advertise or promote such activities.

The Act, however, does not apply to commercial electronic messages that are sent to people with whom the sender has a personal or family relationship, or that consist of an inquiry sent to someone about a commercial activity that the recipient is engaged in.

2. Businesses must obtain consent before sending commercial electronic messages

In order to properly obtain explicit consent, businesses cannot rely on an “opt out” mechanism, whereby consent is first deemed to occur but can later withdrawn. Rather, explicit consent must be obtained via a positive act (called “opting in”), which can be oral or in writing. A written form of consent (which is recommended) can also be done electronically via the Internet, so long as the act of consenting requires clicking an “I Agree” button, or toggling (checking) an explicitly listed option to receive commercial electronic messages. As well, when seeking such consent, the person whose consent is sought must be made aware that their consent can later be withdrawn at any time.

Although explicit consent is always preferred (due to the certainty of intent that it provides), in certain circumstances, businesses can rely on the implied consent of email recipients and comply with the Act. These circumstances include the existence of a prior business relationship with the recipient of the electronic communication, consummated within the two-year period preceding the delivery of the electronic communication. Also acceptable is when the communication is in response to an inquiry or application for services, or the expression of interest in a business opportunity, which was received in the six months prior to the electronic communication being sent.

Those who conspicuously publish their email address or provide the sender with their email address (without also indicating that they do not wish to receive unsolicited emails), are also deemed to have impliedly consented to receive electronic communications that are relevant “to the person’s business, role, functions or duties in a business or official capacity”. Therefore, most online businesses (who tend to put their email addresses on their “Contact Us” webpage), will fall into this category.

Note, however, that consent is not required if the commercial electronic message:

  • Is in response to a request for a quote or estimate for the supply of products and services, or acts to deliver a product, service, or product upgrades that the recipient is entitled to receive;
  • Facilitates, confirms or completes a commercial transaction that the recipient has previously agreed to enter into;
  • Provides warranty, safety or recall information, or factual information concerning purchased products or services; or
  • Provides information directly related to an employment relationship or related benefit plan that the recipient is involved in.

3. Commercial electronic messages must contain specific information and provide an opt-out mechanism

All commercial electronic messages must, under the Act, contain:

  1. Information that indentifies the person that sent the message, or the person on whose behalf the message is sent, such that the recipient of the message can readily contact the person who sent the message or the person on whose behalf it is sent;
  1. An unsubscribe mechanism that enables the recipient to indicate that they no longer wish to receive such messages:  this mechanism must be able to be readily performed (such as by either return email or via hyperlink to the appropriate webpage).

Failure to comply with the requirements of the Act can result prosecution by the Competition Bureau, or the commencement of legal proceedings that can result in damage awards from $200 per occurrence, up to $1 Million per day that the contravention occurs. Finally, the Act provides for up to a three year grace period before the anti-spam provisions of the Act come into force, which applies to businesses whose relationship with clients, prior to the Act coming into force, has included the delivery of commercial electronic messages. However, given that for some businesses, obtaining the necessary consent from clients and customers will be a time consuming task, business owners should begin to act now to make sure the appropriate compliance mechanisms are put into place.

Additional information about the Act, including information bulletins outlining proper compliance, can be found online on Canada’s Anti-Spam Legislation website.

James Katz is a Lawyer and Trade-mark Agent with the Ottawa law firm BrazeauSeller LLP. James’ practice focuses primarily on Internet related legal issues and litigation, including trade-mark and copyright infringement, defamation and online privacy issues.

Disclaimer: The contents of this Blog post, and associated opinions are those of its Author, and do not necessarily represent the opinions of WebFuel, or its employees.