The Enforcement Begins: Highlights of the CRTC FAQ Updates on CASL
July 18, 2014
CASL came into effect on July 1, 2014, including the provisions for sending commercial electronic messages (CEM) (section 6) and installing computer programs (section 8). Since July 1, 2014, it is reported that the CRTC has received more than 1,000 complaints. Hence, awareness of this new law is spreading quickly, and as such so should efforts by organizations to become compliant.
The CRTC FAQs on Canada’s new Anti-Spam Legislation (CASL) were updated on July 4, 2014. We covered the revisions made to the FAQs in May 2014 in a previous blog post. The updated FAQs contain further clarifications, which pertain to questions we have been receiving from organizations about interpretation and compliance. The updated FAQs provide detail on the consent and identification (including for senders and affiliates) requirements for sending CEMs, clarify the application of CASL section 6 in social media communications as well as for political parties and registered charities, and expand on CASL section 8. The revised FAQs also outline the enforcement principles behind CASL. While the FAQs are not "law," they are a useful resource for interpreting CASL and its regulations. Highlights of the updated FAQs are below.
Notably, this revision contains important updates describing the consent and identification requirements for sending CEMs, clarifying the application of CASL section 6 in social media communications and for political parties as well as registered charities, and expanding on CASL section 8. The revised FAQs also outline the enforcement principles behind CASL. However, it is important to note that the FAQs are not "law." They are a useful resource for interpreting CASL and its regulations, but they are not a substitute for the actual "law".
Penalties and Enforcement Principles
As you may already be aware, the penalties for violating CASL are significant, and can range from fines of up to $1 million for individuals and $10 million for organizations. However, the revised FAQs now provide some guidance on how the CRTC will enforce CASL. Notably, directors, officers, agents, and mandatories of a corporation can be liable if they directed, authorized, assented to, acquiesced in, or participated in the commission of the violation of CASL’s protocols.
In assessing whether to impose a penalty, the revised FAQs highlight that the CRTC will be assessing due diligence by looking at two steps in particular: 1) whether an individual or a business tracked how email addresses were obtained; and, 2) whether or not there was an unsubscribe option in the CEM.
Consent, Identification, and the Unsubscribe Mechanism
In order to lawfully send a CEM to an electronic address, the sender needs to have 1) consent, 2) identification information, and 3) an efficient unsubscribe mechanism. The revised FAQs further elaborate on these three requirements and how they can be met.
Consent and the Transition Period
The revised FAQs confirm consent can be obtained orally or in writing. In both instances, the onus is on the person who is sending the message to prove that consent was obtained before sending the message. Importantly, silence or inaction on the part of the end-user cannot be construed as providing consent. "Opt out" subscription provisions cannot be relied upon.
The CRTC suggests the following key considerations may make it easier for consent to be proven, such as:
- whether consent was obtained orally or in writing;
- when it was obtained;
- why it was obtained; and,
- the manner in which it was obtained.
A transition provision exists relating to the consent requirement. Under CASL section 66, consent to send CEMs is implied for a period of 36 months beginning on July 1, 2014, where there is an existing business or non-business relationship, and this relationship includes the communication of CEMs between the two parties. The existing business or non-business relationship must have been created prior to July 1, 2014.
When sending a CEM, the persons who play a material role in the content of the CEM and/or the choice of recipients must be identified in the communication. If a message is being sent on behalf of another party, including affiliates, the sender and the persons on whose behalf the CEM is sent must be identified.
The revised FAQs reiterate that, if it is not practicable to include this information in the body of the CEM, a hyperlink to a website that contains this information is acceptable as long as the website is readily accessible at no extra cost. The revised FAQs also states that only the persons who play a material role in the content of the CEM or choice of the recipients must be identified.
The unsubscribe mechanism must be simple, quick, and easy to use for the end user. The time limits for keeping this mechanism open (60 days) and for acting on a recipient’s request (within 10 days) must be followed. The revised FAQs provide that this mechanism can provide the recipient with a choice of unsubscribing from all or only specific types of CEMs from a particular organization.
The revised FAQs provide that there is some leeway for obtaining consent under certain circumstances, as follows:
There is an exception to the consent requirement for CEMs sent following a one-time referral so long as an individual who has an existing business relationship, an existing non-business relationship, a family relationship, or a personal relationship with both the sender and the recipient of the CEM made the referral. In order to use this exception, the CEM itself must include: 1) the full name of the individual who made the referral and 2) a statement that the CEM is sent as a result of the referral.
Exchanging Business Cards
Implied consent may be received if a business card was provided to a sender, so long as 1) the CEM relates to the recipient’s role, functions or duties in an official or business capacity; and 2) the recipient has not made a statement that they do not wish to receive CEMs when providing their business card.
CEMs sent to members of an association, club, or voluntary organization, may have implied consent. Being a "member" means having the status of being accepted as a member of a particular organization as per the membership requirements.
To use this exemption, the organization must be a club, association, or voluntary organization, that 1) is a non-profit organization; 2) is organized and operated exclusively for social welfare, civil improvement, pleasure or recreation or for any purpose other than personal profit; and 3) has no part of its income payable for the personal benefit of any member, proprietor, or shareholder (unless that entity is an organization whose primary purpose is to promote amateur athletics in Canada).
CASL Section 6 Applications
CASL section 6 applies to message sent from "electronic accounts," which are defined as being email accounts, telephone accounts, instant messaging accounts, and any other "similar accounts." What remains unclear is whether certain social media accounts would fall under the latter category, and the revised FAQs note that this will depend on the specific circumstances of the account in question, and how the particular social media platform was used. The CRTC notes that a Facebook wall post, websites, blogs, and micro-blogs, would not be typically considered electronic addresses as per the revised FAQs.
Additionally, section 6 exempts CEMs sent to an individual with whom the sender has a personal relationship. The revised FAQs clarify that a "personal relationship" involves direct, voluntary 2-way communication, and is a relationship between individuals (and not corporations). A "personal relationship" also requires the real identity of the individual who alleges a personal relationship to be known by the other party. An alias used in social media may not meet the requirement. Furthermore, the revised FAQs suggest that passive communications do not meet this requirement: that is, merely using buttons that are available on social media sites, such as the Facebook "Like" or a Twitter "Follow" buttons, is insufficient to constitute a personal relationship.
CASL section 6 applies to non-profit organizations when sending CEMs or installing computer programs. However, the revised FAQs state that CEMs sent by, or on behalf of, a registered charity where the primary purpose of the CEM is to raise funds for charityis exempt per section 3(g) of the Governor-in-Council Regulations. The "primary" purpose of a CEM refers to the main reason or main purpose of the CEM, and does not preclude the existence of a secondary or additional purpose to the CEM.
Additionally, consent under CASL is implied in instances where there is an existing business relationship or an existing non-business relationship with the recipient. In the case of registered charities, a non-business relationship would be created when a person makes a donation or a gift to a registered charity, performs volunteer work, or attends a meeting organized by the charity.
The transition period has begun as of July 1, 2014, and the revised FAQs confirm that express consent does not have an expiry date.
Companies are encouraged to create a culture in which the best practices for adhering to CASL rules are adopted through staff training programs and management involvement. Furthermore, good record-keeping practices may help ensure that businesses are demonstrating due diligence. Businesses are encouraged to consider maintaining hard copies or electronic records of items such as:
- CEM policies and procedures;
- unsubscribe requests and actions;
- evidence of express consent (e.g. audio recordings or forms) by consumers who agree to be contacted via a CEM; and,
- evidence of implied consent.
As a practical matter, the purpose of CASL is to strike a balance between individual privacy as well as the need for businesses to communicate with Canadians. Due diligence and adopting best practices, while administratively onerous, should enable organizations to continue their electronic commerce without significant disruption while, at the same time, avoiding the greater burden of defending a complaint.
Please let us know if require assistance with your CASL compliance program or have any other questions about CASL.