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Canada’s New Anti-Spam Law

Being across Lake Erie from Canada means that local businesses have a frontier of opportunity within close proximity.  There are millions of potential customers only a short drive away.  Despite this opportunity, Canada's new law for electronic messages, which becomes effective today, complicates the relationship between American businesses and Canadian consumers.
 
The Canadian Anti-Spam Law (“CASL”) regulates the sending of commercial electronic messages to electronic addresses.  This covers things such as marketing e-mails, text messages or social media messages.  The law also deals with the installation of software programs and the alteration of transmission data.  But today, we're only going to focus on commercial electronic messages.
 
Under the new law, there are three primary requirements for commercial electronic messages:
1.      The recipient must have consented to receiving the message.
           •  This is the most significant change.  Previously, the law simply  
               required the sender to allow the recipient to “opt-out.”  Now,
               businesses must get a customer to “opt-in” before sending them a
               message.

2.      The person sending the message must be identified.
          •  If the message is being sent on someone’s behalf, that person must be 
             identified as well.  The message must also provide information on how
             to contact the sender.

3.      The recipient must be given the opportunity to unsubscribe. 
          • Recipients must be able to unsubscribe via electronic means and the
             sender must specify an electronic address or a website where the         
             request may be sent.
 
As mentioned above, the biggest change is the switch from an “opt-out” to an “opt-in” requirement.  This creates a significant issue for American businesses.  American law currently requires only an “opt-out” provision (We will cover American laws regarding commercial electronic messages in a future ETT).  American businesses will now have to decide whether to switch their entire lists to an “opt-in” provision or whether to create separate marketing lists—one for American costumers and another for Canadian costumers—or whether to stop marketing to Canadians all together.
 
Failure to comply with these requirements can result in serious fines.  The maximum penalty for individuals is $1 million and for businesses it is $10 million.  The law also authorizes a private right of action against the perpetrator.
 
If you have questions about complying with this new Canadian law, contact a member of our Emerging Technologies Practice Group.