Friday, August 3, 2012

U.S. Businesses Advised to Wake Up to Impact of Canada's Anti-Spam Law

by Thomas O'Toole

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The Canadian law firm Fasken Martineau recently published the results of a December 2011 survey designed to gauge knowledge of the Canadian Anti-Spam Act (Bill C-28).

The survey indicates that businesses in the United States have some homework to do. According to Fasken:

A company is not in compliance with Bill C-28 if it is in compliance with the U.S. CAN-SPAM Act, and only 27% of respondents were aware of this fact.

If nothing is done to comply with the Canadian Anti-Spam Act, nearly 3 in 4 companies would be immediately at risk.

Survey respondents (82 percent of whom were based in the United States) were similarly unaware that the Canadian anti-spam law is enforced with stiff fines and a private right of action that can include class action suits.

There are several key differences between the Canadian and U.S. approaches to regulating unsolicited commercial email messages:

• C-28's definition of "commercial electronic message" is different, and potentially broader, than CAN-SPAM's definition.

• C-28 requires senders to obtain express opt-in consent from the recipient. C-28 doesn't permit the "one free shot" allowed by CAN-SPAM. (Note: This has been softened by regulation.)

• Under C-28, requests for consent must be accompanied by mandated disclosures.

• C-28 requires that senders comply with unsubscribe requests within 10 business days.

• Canadian regulators may fine C-28 violators up to $10 million, and these fines may potentially create liability for company officials, employees, and agents.

• C-28 creates a private right of action for individuals that can be enforced by class action lawsuits.

Key terms in C-28 are subject to definition by no less than three regulators: the Canadian Radio-Television and Telecommunications Commission, Industry Canada, and the Office of the Privacy Commissioner.

All in all, it's clear that our neighbor to the north has given a chilly reception to spam marketers. For legitimate U.S.-based businesses, "business as usual" carries a substantial risk of legal liability for C-28 violations. The law has not yet come into force, so there is still time to formulate compliance strategies.

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