If you think your company doesnt send spam, you may want to double-check. A Canadian anti-spam law with global reach is poised to cast a wide net for offending e-communications. Given the hefty fines and class action potential attached, the new law is also sure to prompt tough conversations between in-house counsel and company marketing departments.
Yet for the all the punch that Bill C-28 [PDF] packs, many companies around the world dont even know the law existslet alone that it applies to any business that sends commercial e-mails from or to Canada. According to a new survey of companies located in the U.S. and Canada by Fasken Martineau, nearly 60 percent of executives polledincluding general counsel and marketing executiveswere unaware of the law and its tight regulation of unsolicited commercial electronic messages.
Passed in December 2010, its not yet clear when the law will take effect, says Fasken associate Charles Lupien, who specializes in e-commerce, web marketing, and digital entertainment. But he advises companies to be prepared to comply as early as this fall.
Whenever the effective date may be, its evident the Canadian law is intended to have a big global impact. Anyone sending a commercial electronic message to or from a recipient in Canada must first have the recipients prior consentand companies must be able to document that consent. That opt-in requirement stands in sharp contrast to U.S. legal standards, like the 2003 CAN-SPAM Act, which requires that recipients be able to opt out of receiving messages.
Commercial electronic messages encompass communications that have any commercial goalincluding discount offers, promotions, and newsletters. In other words, says Lupien, a simple, run-of-the-mill e-mail that a company wouldnt think of as malicious spam will be viewed as illegal under this law, sans prior consent.
Some examples of what would be covered under Bill C-28: A law firm that sends out a mass mailing about a free conference it’s hosting. Or a beverage companys e-news about its latest juice, sent to a recipient list it obtained from an industry association. Or a company that contacts a client list that dates back five years, announcing, Were new and improved and we want you back as a customer.
The marketing people would never consider this spam, says Lupien. But the Canadian law does.
And its not just e-mailselectronic communications like text messages and Facebook inbox messages are covered by the prohibition, too.
Some exceptions apply. For instance, companies dont have to prove a recipients prior consent if they can show the recipient had a business relationship with the company within the last two years at the time the message was sent. Product recalls also constitute an exception.
The law carries with it some unusually strict penalties by Canadian standards. The Canadian Radio-Television Telecommunications Commission can issue fines up to $10 million per offense. How offense is definedas a single message, or as an entire campaign, or as something else altogetherremains to be seen, says Lupien.
A more dire consequence, Lupien says, is the private right of action provided for in the law. Lawmakers have valued a single unwanted message at $200. Multiply that figure by all of the Canadian recipients in a marketing campaign, and that could add up to a huge hit on a company in the context of a class action lawsuit.
Once the law takes effect, obtaining prior consent will present a challenge. Notably, companies will not be permitted to send an e-mail to a recipient requesting prior consent to receive future messages. That means businesses will have to obtain consent through other meanssuch as sign-ups in the real world, or on a companys website.
Ensuring that existing marketing lists are compliant with the law will not be an easy task, says Lupien. For many companies, marketing lists are contained in a spreadsheet, which generally wont allow any way to tell which recipients are Canadian and which arent.
The marketing department isnt going to want to hear this, but: You basically have to tell them that they have to purge, says Lupien. Deleting all addresses for which a company cant prove prior consent, or one of the exceptions to the law, often yields a 40 to 60 percent reduction in the contact rolls, according to Lupien.
For in-house counsel, that means step one in the office is education on the law. People need to know about it, Lupien says. And be prepared for how the news might go over at a company meeting. I was on calls with people who were literally screaming, Lupien says.
See also: “The Changing Relationship of Canadian Business and Foreign Investors,” CorpCounsel, December 2011.