Reforming CASL: Time to lighten up

  • Subtitle: Competing Interests
Written by  Posted Date: March 27, 2017
Reforming CASL: Time to lighten upImagine a new law 10 years in the making — the result of a government-established task force and action plan to tackle a serious economic problem. 

A law that moved through several draft bills, multiple rounds of committee hearings and extensive and broad stakeholder consultations over many years.

A law so important to the effective functioning of an economy that not one but three federal enforcement agencies were tasked with its enforcement, together with a national co-ordinating body and three government oversight departments to ensure its efficient operation. Federal agencies that had issued an extensive body of technical guidelines, guides, backgrounders, fact sheets, information bulletins, infographics, videos, presentations, enforcement advisories, news releases and FAQ documents to help business and consumers understand the law.

Imagine that these various federal enforcement and administrative organs in their diligence had also launched an intertwined network of websites, microsites and social media resources, as well as a reporting centre — a sort of hotline — where concerned citizens could inform the government about violators of this critical national law — a law with corporate penalties up to $10 million and civil damages up to $1 million per day.

Such extensive government efforts and penalties, one would think, could only be allocated to a most critical national priority. A new criminal law? Corporate corruption? Securities fraud, perhaps?

Spam, actually. Canada’s Anti-spam Legislation, or CASL.

Before CASL was passed, consumer advocates argued, among many other things, that the new law would mean that “abusive messaging [would] no longer be tolerated” and that the law would protect consumers and businesses from the “bad actors ruinously abusing the online experience of millions” (John Levine, president of CAUCE). Ruinous abuse to millions? That doesn’t sound good.

Legislators and regulators also comforted businesses both before and after the law came into force (and still are in fact) by saying, for example, that the regulatory framework would not change administrative costs to business or increase their administrative or compliance burden (Industry Canada Regulatory Impact Analysis Statement. The Canadian Radio-television and Telecommunications itself states in its CASL FAQs that businesses already using “common best practices” for email marketing “should require little effort to become CASL compliant.” Little effort? That would be comforting.

If you have a weekend with nothing better to do, you can read the entire legislation — all 53 cryptic, head-scratching pages. If you have considerably more time — you’ll need a lot — you can work your way through the entire corpus of CASL-related legislative, government, regulator and policy materials. There’s a lot.

CASL is, of course, in force and has been since July 2014. The private sector also spent considerable effort before it was enacted, attempting to make it more intelligible and practical for business.

So why am I writing about it again?

Because despite regulators’ assurances of easy application, CASL has in fact proven to be difficult, unnecessarily complex, confusing and expensive to comply with and is causing our economy more harm than good. Many small and medium-size companies — indeed many larger ones — still don’t understand the law and find it difficult or impossible to apply in practice.

In the fast-moving and commercially lean world of marketing, there is also typically no time, significant budget or appetite to work through complex and unclear legislation, regulations and overlapping regulatory guidelines to efficiently run email marketing campaigns. Companies are busy trying to do what they’re supposed to do — market their products and compete.

Many small and medium-size companies also don’t have budgets to routinely obtain legal advice on the many CASL-related questions that commonly arise, which, when obtained, are often necessarily qualified (sometimes heavily) based on many ambiguities of the law.

CASL is also, unfortunately, putting Canadian companies at a competitive disadvantage with the United States and international firms that benefit from more practical anti-spam law regimes (for example, the much more straightforward opt-out approach in the U.S.). Rather than take the enforcement risk, many companies have chosen instead to discontinue email marketing altogether.

To cite one chill-inducing recent case, an individual was fined $15,000 in early March for sending 58 emails to market his commercial flyer business (Compliance and Enforcement Decision CRTC 2017-65). While $15,000 is certainly not a significant sum by corporate standards (the highest CASL penalty to date has been slightly more than $1 million), many small and medium-size businesses will choose not to email market when they are faced with similar potential penalties.

The government should consider reforms to CASL in light of two specific upcoming events: CASL’s private action rights that come into force on July 1 and the forthcoming mandatory three-year review of the law (s. 65 of CASL requires a Parliamentary committee to review the provisions and operation of the law three years after it has been in force).

As for the impending private action regime, what is needed is not more risk for Canadian companies attempting to market their products but an amended, streamlined and more practical law to protect consumers while allowing companies to effectively engage in electronic marketing.

This three-step recommendation would go a long way to making CASL more practical for marketers:

1.    Simplify the definition of “implied consent” to “one party providing their contact information to a second party.” For example, if a consumer provides their contact information into a web form and downloads an accounting firm’s e-report, call it implied consent and let the accountant send that person a commercial electronic message. To avoid spamming where implied consent has been provided, simply retain a technologically neutral, easy unsubscribe requirement.

2.    Remove the six-month and two-year purging requirements for existing business relationships (i.e., implied consent). In reality, some consumers take more than six months to make a purchase decision and some industry re-purchase cycles go past two years. Just because there’s a lack of consumer interaction doesn’t mean the consumer has lost affinity with the brand or doesn’t want to receive branded communications. Let’s not take liberty away from the consumer: simply allow them to unsubscribe when — and if — they want to.

3.    Consider it implied consent if two people are mutually connected on a social network (as both voluntarily entered into the relationship). The unsubscribe requirements will still remain in effect, and recipients will be further protected since most social networks have their own built-in mechanisms to thwart ongoing, unwanted electronic messages (for example, blocking or unfollowing features) (Andrew Schiestel, Why CASL is Bad for Canada's Economy and How to Lighten It).

Would more be required to simplify the electronic marketing portions of CASL? Likely, yes. But the above reforms, and other similar ones, would both protect consumers and allow Canadian companies to be more efficient, competitive and productive — good for consumers and the economy. CASL reforms would also fit very well with the federal government’s current innovation and digital economy priorities.

In short, it’s time — more than time — to lighten up CASL.

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Comments   

+1 # Executive Director, CAUCE.orgNeil Schwartzman 2017-03-28 06:01
As far as 'lightening up' is concerned, there have been a pitiful handful of actions taken over the past three years, and yet, spam into and out of Canada dropped 40% when the law cam into effect.

Spam, in fact is the conveyance of malware, phishing, business email compromises that cost legitimate businesses hundreds of millions of dollars annually, both in terms of damages, and protective systems to prevent said damage. Yet, somehow, it is only the marketing departments that are annoyed by having to ask permission of a customer to bother them with email. Why is that? Perhaps the marketers need to talk to the other departments witrhint their organizations?
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+1 # Executive Director, CAUCE.orgNeil Schwartzman 2017-03-28 06:00
You chill-inducing example could be better chosen,. The Individual involved was and is, in fact a professional spammer with a vast infrastructure, and a very long history going back a decade. A simple google search on his name or + spamhaus (the venerable spam blocking system) will reveal much more.

Insofar as the rather dismissive tone about the law, yes it is complex, but so is spam, but it can readily be boiled down to "GET PERMISSION TO SEND TO SOMEONE YOU WANT TO SELL STUFF TO".
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Steve Szentesi

Steve Szentesi is a competition and advertising lawyer based in Toronto. He is a former adjunct professor of competition law at the University of British Columbia, Faculty of Law, author of a number of competition law publications and is lawyer-editor for Practical Law Canada Competition. He writes regularly with particular interest in competition policy and innovation and law. He can be reached at steve@szentesilaw.com.


Column: Competing Interests

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