Canada’s new Anti-Spam Legislation (CASL) was enacted in December 2010, and is slated to enter into force in 2012. A part of Canada’s Strategy for the Digital Economy, the Act is intended to promote e-commerce by deterring spam, identity theft, phishing, spyware, viruses, and botnets, as well as misleading commercial representations online. The Act creates new offences, enforcement mechanisms and penalties to address these online threats.

Canada is the last of the G-8 countries to introduce an over-arching legislative framework to address spam, which continues to represent approximately 80% of all global e-mail traffic.

Canada has distinguished itself, however, in making its legislation tough. The Act’s consent standards are higher than those in the U.S. CAN-SPAM legislation.  Moreover, the Act’s significant penalties have led some to nickname it “Canada’s $10 million anti-spam law”.

Application

The Act applies to “electronic messages” and “electronic addresses” applying broadly to any means of telecommunication, including text, sound, voice, or image, via e-mail, instant messaging, telephone or “any similar account”, which could include Facebook and Twitter postings.

Reach Outside of Canada

The Act has considerable extra-territorial reach. Its anti-spam provisions apply to messages where “a computer system located in Canada is used to send or access” the electronic message – catching emails sent, for example, in the United States, but merely received in Canada.

Because of the above reach outside of Canada, and because the Act goes further than similar legislation in other countries, Canada’s new Anti-Spam legislation effectively raises the bar for online communications that may flow into Canada.

Impact for Online Business Communications

This new legislation will affect how companies do business online in Canada. Proactive businesses can use the lead time prior to the Act’s entry into force as a transition period to prepare for compliance. For example:

• All organizations that send commercial email to clients or prospects will need to review their online marketing practices, to ensure they comply with new consent, disclosure, and “unsubscribe” requirements.
• Similarly, companies that distribute software and updates/upgrades to their customers will need to review their installation practices and software agreements to meet the new requirements.
• Advertisers and marketers will need to familiarize themselves with how the existing misleading and deceptive representations laws will apply online.