Canadian Anti-Spam Laws: What U.S. Companies Need to Know

The new Canadian Anti-Spam Legislation (CASL) went into effect on July 1, 2014, and has immediate and significant ramifications for Canadian companies who communicate with their customers through any form of Commercial Electronic Message (CEM). However, US-based businesses should check their own CAN-SPAM compliance, or risk facing a hefty fine from the Canadian government.
 

CASL: What Does it Mean?

The CASL is similar to the US’s CAN-SPAM Act of 2003, in that the goal of the legislation is to limit spam messages sent out to consumers. There are a couple of major differences between CAN-SPAM and CASL:

What communications are covered

CAN-SPAM applies only to commercial email communications. CASL, however, applies to all types of electronic communications, including text messages, social media platforms, and video messages.

Who can receive messages

CAN-SPAM does not effectively prevent email marketers from sending farming communications; companies simply have to offer recipients an easy “opt-out” method if they choose to avoid further contact. CASL takes it a step further, however, and requires that consumers have to “opt-IN,” and give permission before companies can send messages to their accounts.

The “prior consent” stipulation may seem daunting, but upon further examination of the CASL, there are some loopholes—similar to those in the CAN-SPAM Act— in terms of defining recipient “consent.” If there is an “existing business relationship,” that is, an individual has purchased products or services from a company within the past three years, then that company has an “implied” consent, and can send CEMs to that individual until such time that the individual exercises their “opt-out” option. Both the CASL and CAN-SPAM laws contain exceptions for messages with certain content, including religion, political affiliations, and notices pertaining to national security, to name a few.
 

Penalties for Violations

As far as US compliance with CAN-SPAM is concerned, there have been relatively few prosecutions as a result of violations, and there has been a general lack of enforcement by the FTC. Given that Canada’s spam law comes several years after the US legislation, it is no surprise that the penalties for violating the CASL are quite steep, with fines of up to $1 million CAD for an individual, and up to $10 million CAD for businesses, as well as imprisonment. Business owners are also held accountable for employees who violate the law. In contrast, the fine per violation of CAN-SPAM is $16,000.
 

The Road to Compliance—Is my business affected?

Companies that utilize CEMs to engage with clientele in Canada will be held liable for any violations of CASL. In the decade since CAN-SPAM was enacted, most companies doing business in the US have formulated their marketing plans based on compliance with anti-spam law. However, given the different requirements of CASL, US businesses need to check their marketing strategies, and correlate their customer lists accordingly.
 

Do I have consent?

CASL requires senders of CEMs to have either Implied or Express consent. If your Canadian customer has made a purchase or done business with you within the past 2 years, then you have implied permission to communicate with them until they unsubscribe.

Express consent must be obtained in written form, and companies will be expected to keep records in the event that consent must be proven.
 

What types of communications apply?

Any CEM—aside from the exceptions already discussed—are subject to CASL. These include email, text messages, video, messages, instant messages, and social media. Facsimile transmissions do NOT fall into the CEM category.
 

Message Content

The restrictions and requirements of CEM content are largely similar between CAN-SPAM and CASL. Senders must be clearly identified, subject lines cannot be misleading, content must be legal and contain contact information and “unsubscribe” links, and both laws impose restrictions on material that is sexually explicit or graphic in nature.
 

Transition Period

The CASL is being gradually implemented, and there is a transition period beginning July 1, 2014, through July 1, 2017. During this time, companies may send CEMs to individuals with whom they have implied consent, unless those customers opt-out. After July 1 2017, companies will be required to have express consent or valid implied consent (subject to the 2 year time frame).
 

Protect yourself and your business

Complacency in the face of the new CASL requirements could have crippling financial consequences in the future. Evaluate your business marketing now, and take any necessary steps to ensure compliance.

David's blog

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