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New anti-spam regs to have complex rules, stiffer penalties

|Written By Andi Balla

Canada’s latest move to control how commercial electronic messages are distributed could lead to complex new rules and stiffer penalties for Canadian companies, warn technology lawyers.

The federal government is trying to get approval for the new fighting Internet and wireless spam act, which aims to govern commercial messages sent by e-mail, instant messaging, telephone, or other similar means.

The government says the proposed law is intended to deter the most damaging and deceptive forms of spam from occurring in Canada and help drive spammers out of the country. It also says the bill provides a comprehensive regulatory regime that uses economic disincentives to protect electronic commerce.

However, because the bill creates a new consent-based system that would apply to almost all electronic messages sent for a commercial purpose, “organizations will need to reassess their practices for sending commercial electronic messages or face significant new penalties,” according to Michael Fekete, a partner at Osler Hoskin & Harcourt LLP.

These include administrative monetary penalties of up to $10 million for corporations and statutory damages of up to $1 million a day.

If the bill becomes law, Canadian companies would have to change many of their procedures and systems in order to prove consent for the messages they send, according to Fekete. They also need to add an unsubscribe mechanism and other prescribed content to commercial electronic messages.

Under the new regime, commercial electronic messages could be sent only with the express consent of the recipient unless there’s an existing business relationship or another approved exception, such as providing a requested estimate, confirming a transaction or giving warranty information.

The bill is still before Parliament, and both the NDP and Liberals are asking for further clarifications due to concerns over increased costs and making sure that large, obvious offenders are targeted instead of legitimate businesses.

“There are all kinds of booby traps in legislation,” NDP MP Charlie Angus told Parliament. “Legislation always has unintended consequences. If we do not do the due diligence, we end up using a hammer to whack a bunch of little pieces all over the place without necessarily getting what we wanted.”

But Conservative House Leader Jay Hill, who tabled the bill in Parliament, told lawmakers the legislation is necessary to “promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities.”

Industry Minister Tony Clement, in announcing the anti-spam bill at the same time as amendments to the Personal Information Protection and Electronic Documents Act, said they where important steps towards positioning Canada as a leader in the digital economy.

“With today’s two pieces of legislation, we are working toward a safer and more secure online environment for both consumers and businesses — essential in positioning Canada as a leader in the digital economy,” he said in a statement. 

The bill would expand the mandates of the three enforcement agencies: the Canadian Radio-television and Telecommunications Commission, the Competition Bureau, and the Office of the Privacy Commissioner.

This is the second time a bill of this type has been introduced. A similar bill fell victim to the prorogation of Parliament last December.