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Legislative and Judicial Approaches to Internet Regulation: Case Study, Canada’s Anti-SPAM Law (CASL)

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  1. 1. McCarthy Tétrault Advance™ Building Capabilities for Growth Justice Canada Intellectual Property and Information Technology Law Training Day Keynote Address: Legislative and Judicial Approaches to Internet Regulation: Case Study, Canada’s Anti-SPAM Law (CASL) Barry B. Sookman McCarthy Tétrault LLP bsookman@mccarthy.ca 416-601-7949 McCarthy Tétrault LLP / mccarthy.ca / 12225322 February 26, 2013
  2. 2. Overview of Internet Regulation Principles ¬ Recognize power of Internet as means of dissemination of information ¬ Promote confidence in use of electronic means of communication ¬ Focus on real harms and avoid inadvertent consequences ¬ Technologically neutrality ¬ Balance ¬ Respect for international comity ¬ Respect for freedom of expression and Charter values McCarthy Tétrault LLP / mccarthy.ca / 12225322
  3. 3. SOCAN v. Canadian Assn. of Internet Providers, 2004 SCC 45 ¬ “The capacity of the Internet to disseminate “works of the arts and intellect” is one of the great innovations of the information age. Its use should be facilitated rather than discouraged, but this should not be done unfairly at the expense of those who created the works of arts and intellect in the first place.’ McCarthy Tétrault LLP / mccarthy.ca / 12225322
  4. 4. SOCAN v. Canadian Assn. of Internet Providers, 2004 SCC 45 ¬ “Parliament has decided that there is a public interest in encouraging intermediaries who make telecommunications possible to expand and improve their operations without the threat of copyright infringement. To impose copyright liability on intermediaries would obviously chill that expansion and development, as the history of caching demonstrates.” ¬ “Section 2.4(1)(b) reflects Parliament’s priority that this entrepreneurial push is to continue despite any incidental effects on copyright owners.” ¬ “Nevertheless, by enacting s.2.4(1)(b) of the Copyright Act…Parliament did not want copyright disputes between creators and users to be visited on the heads of the Internet intermediaries, whose continued expansion and development is considered vital to national economic growth.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  5. 5. SOCAN v. Canadian Assn. of Internet Providers, 2004 SCC 45 ¬ “The “real and substantial connection” test was adopted and developed by this Court… From the outset, the real and substantial connection test has been viewed as an appropriate way to “prevent overreaching . . . and [to restrict] the exercise of jurisdiction over extraterritorial and transnational transactions”… The test reflects the underlying reality of “the territorial limits of law under the international legal order” and respect for the legitimate actions of other states inherent in the principle of international comity… A real and substantial connection to Canada is sufficient to support the application of our Copyright Act to international Internet transmissions in a way that will accord with international comity and be consistent with the objectives of order and fairness.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  6. 6. Club Resorts Ltd. v. Van Breda, 2012 SCC 17 ¬ “Carrying on business in the jurisdiction may also be considered an appropriate connecting factor. But considering it to be one may raise more difficult issues. Resolving those issues may require some caution in order to avoid creating what would amount to forms of universal jurisdiction in respect of tort claims arising out of certain categories of business or commercial activity. Active advertising in the jurisdiction or, for example, the fact that a Web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there. The notion of carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there or regularly visiting the territory of the particular jurisdiction.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  7. 7. Crookes v. Newton, 2011 SCC 47 ¬ “The Internet’s capacity to disseminate information has been described by this Court as “one of the great innovations of the information age” whose “use should be facilitated rather than discouraged” (SOCAN, at para. 40, per Binnie J.). Hyperlinks, in particular, are an indispensable part of its operation. As Matthew Collins explains, at para. 5.42: ¬ Hyperlinks are the synapses connecting different parts of the world wide web. Without hyperlinks, the web would be like a library without a catalogue: full of information, but with no sure means of finding it.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  8. 8. Crookes v. Newton, 2011 SCC 47 ¬ “Interpreting the publication rule to exclude mere references not only accords with a more sophisticated appreciation of Charter values, but also with the dramatic transformation in the technology of communications…. ¬ The Internet cannot, in short, provide access to information without hyperlinks. Limiting their usefulness by subjecting them to the traditional publication rule would have the effect of seriously restricting the flow of information and, as a result, freedom of expression. The potential “chill” in how the Internet functions could be devastating, since primary article authors would unlikely want to risk liability for linking to another article over whose changeable content they have no control. Given the core significance of the role of hyperlinking to the Internet, we risk impairing its whole functioning. Strict application of the publication rule in these circumstances would be like trying to fit a square archaic peg into the hexagonal hole of modernity.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  9. 9. Crookes v. Newton, 2011 SCC 47 ¬ “Making reference to the existence and/or location of content by hyperlink or otherwise, without more, is not publication of that content. Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be “published” by the hyperlinker. Such an approach promotes expression and respects the realities of the Internet, while creating little or no limitations to a plaintiff’s ability to vindicate his or her reputation.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  10. 10. SOCAN v. Bell Canada, 2012 SCC 36 ¬ “SOCAN argued that the purpose of the previews in this case was purely commercial. This is an approach that looks at the purpose of the previews from the perspective not of the consumer, but of the service providers. I agree instead with the Board and the Federal Court of Appeal that the predominant perspective in this case is that of the ultimate users of the previews, and their purpose in using previews was to help them research and identify musical works for online purchase. While the service providers sell musical downloads, the purpose of providing previews is primarily to facilitate the research purposes of the consumers. ¬ All of this confirms the Board’s conclusion that previews satisfy the requirements of fair dealing and that the online service providers do not infringe copyright. In so concluding, the Board properly balanced the purposes of the Act by encouraging the creation and dissemination of works while at the same time ensuring that creators are fairly rewarded.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  11. 11. SOCAN v. Bell Canada, 2012 SCC 36 ¬ “Further, given the ease and magnitude with which digital works are disseminated over the Internet, focusing on the “aggregate” amount of the dealing in cases involving digital works could well lead to disproportionate findings of unfairness when compared with non-digital works. If, as SOCAN urges, large-scale organized dealings are inherently unfair, most of what online service providers do with musical works would be treated as copyright infringement. This, it seems to me, potentially undermines the goal of technological neutrality, which seeks to have the Copyright Act applied in a way that operates consistently, regardless of the form of media involved, or its technological sophistication: Robertson v. Thomson Corp., 2006 SCC 43 (CanLII)…” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  12. 12. Entertainment Software Association v. SOCAN, 2012 SCC 34 ¬ “In our view, the Board’s conclusion that a separate, “communication” tariff applied to downloads of musical works violates the principle of technological neutrality, which requires that the Copyright Act apply equally between traditional and more technologically advanced forms of the same media… ¬ SOCAN has never been able to charge royalties for copies of video games stored on cartridges or discs, and bought in a store or shipped by mail. Yet it argues that identical copies of the games sold and delivered over the Internet are subject to both a fee for reproducing the work and a fee for communicating the work. The principle of technological neutrality requires that, absent evidence of Parliamentary intent to the contrary, we interpret the Copyright Act in a way that avoids imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user. To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  13. 13. Rogers Communications Inc. v. SOCAN 2012 SCC 35 ¬ “In addition, this Court has long recognized in the context of the reproduction right that, where possible, the Act should be interpreted to extend to technologies that were not or could not have been contemplated at the time of its drafting…That the Act was to apply to new technologies was recently reaffirmed… ¬ Although the words “in any material form whatever” qualify the right to “produce or reproduce the work” in s. 3(1), the same principle should guide the application of the neutral wording of the right to “communicate … to the public by telecommunication”. The broad definition of “telecommunication” was adopted precisely to provide for a communication right “not dependent on the form of technology”.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  14. 14. Personal Information Protection and Electronic Documents A (PIPEDA) ¬ “An Act to support and promote electronic commerce by protecting personal information that is collected, used or disclosed in certain circumstances, by providing for the use of electronic means to communicate or record information or transactions and by amending the Canada Evidence Act, the Statutory Instruments Act and the Statute Revision Act.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  15. 15. Personal Information Protection and Electronic Documents Act (PIPEDA) ¬ “The purpose of this Part is to establish, in an era in which technology increasingly facilitates the circulation and exchange of information, rules to govern the collection, use and disclosure of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  16. 16. United Food and Commercial Workers, Local 401 v Alberta (A , 2012 ABCA 130 ¬ “The Personal Information Protection Act expressly states its overall purposes. The most important provision is s. 3: The purpose of this Act is to govern the collection, use and disclosure of personal information by organizations in a manner that recognizes both the right of an individual to have his or her personal information protected and the need of organizations to collect, use or disclose personal information for purposes that are reasonable. ¬ The statute recognizes two competing values: the right to protect information, and the need to use it. The Act does not expressly refer to how it interacts with the right to free expression.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  17. 17. United Food and Commercial Workers, Local 401 v Alberta (A , 2012 ABCA 130 ¬ “Determining if the restriction on free expression is justified starts by analyzing whether the objectives of the statute are related to a pressing and substantial goal. If so, the analysis turns to the proportionality of the legislation. If the limiting measures are rationally connected to the objective, one must then determine whether the infringement is as limited as possible. Finally, the analysis examines whether the salutary effects of the Act outweigh its deleterious effects: R. v Oakes,1986 CanLII 46 (SCC), [1986] 1 SCR 103.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  18. 18. United Food and Commercial Workers, Local 401 v Alberta (A , 2012 ABCA 130 ¬ “Prior to the enactment of modern privacy legislation, there was little common law protection for privacy rights. The advent of new technology called for legislative intervention. New technology not only permitted the collection of vast amounts of personal data, it also enabled a much wider analysis of that data to extract information. Most importantly, new technology like the Internet enables vastly wider dissemination of information. In the interest of protecting reasonable expectations of privacy, expectations that one can control one’s own image and personal information, and in order to limit the misuse (including fraudulent use) of personal information, many legislatures enacted privacy legislation. This legislation can be accepted as addressing a pressing and substantial problem. ¬ The pressing and substantial problem is the potential misuse of personal information. Limiting the ability of organizations to collect, store, and use that information has a rational connection to the objective.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  19. 19. United Food and Commercial Workers, Local 401 v Alberta (A , 2012 ABCA 130 ¬ “There is, however, a problem relating to proportionality. The constitutional problems with the Act arise because of its breadth. It does not appear to have been drafted in a manner that is adequately sensitive to protected Charter rights. There are a number of aspects to the over-breadth of the Act: ¬ It covers all personal information of any kind, and provides no functional definition of that term…The Commissioner has not to date narrowed the definition in his interpretation of the Act in order to make it compliant with Charter values. ¬ The Act contains no general exception for information that is personal, but not at all private. For example, the comparative statutes in some provinces exempt activity that occurs in some public places. ¬ The definition of “publicly available information” is artificially narrow. ¬ There is no general exemption for information collected and used for free expression. ¬ There is no exemption allowing organizations to reasonably use personal information that is reasonably required in the legitimate operation of their businesses.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  20. 20. United Food and Commercial Workers, Local 401 v Alberta (A , 2012 ABCA 130 ¬ “This appeal clearly demonstrates the impact that the Act can have on protected rights. The legitimate right of the union to express itself and communicate about the strike and its economic objectives have been directly impacted by the Adjudicator’s order. The appellant has not demonstrated why this heavy handed approach to privacy is necessary, given the impact it has on expressive rights. ¬ It is also not apparent that the salutary effects of the Act outweigh its deleterious effects. While the protection of personal information is important, it is no more important than collective bargaining and the rights of workers to organize. It is also no more important than the right of the union to communicate its message to the public. On the other hand, the privacy interest being protected here is minimal. The persons who were videotaped were in a public place, crossing an obvious picket line, in the face of warning signs that images were being collected. The privacy expectations were very low. Protecting that low expectation of privacy does not warrant the significant stifling of expression that resulted from the Adjudicator’s order.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  21. 21. The Anti-SPAM Prohibition: Consent, Form and Content S.6(1) It is prohibited to send or cause or permit to be sent to an electronic address a commercial electronic message unless: a) the person to whom the message is sent has consented to receiving it, whether the consent is express or implied; and b) the message complies with subsection (2). (2) The electronic messages must be in a form that conforms to the prescribed requirements and must: a) set out prescribed information that identifies the person who sent the message; b) set out information enabling the person to whom the message is sent to readily contact the sender; and c) set out the prescribed unsubscribe mechanism. McCarthy Tétrault LLP / mccarthy.ca 11764519 21
  22. 22. What Messaging Systems are Covered ¬ “electronic message” means a message sent by any means of telecommunication, including a text, sound, voice or image message. (s1(1)) (But, excludes interactive two-way voice communication between individuals, fax messages to a telephone account, voice recordings to a telephone account. (s.6(8)) ¬ “electronic address” means an address used in connection with the transmission of an electronic message to (a) an electronic mail account; (b) an instant messaging account; (c) a telephone account; or (d) any similar account. (s.1(1)) ¬ Covers opt-in closed messaging systems e.g., instant messaging, online portals, SMS, electronic alerts, and other messaging systems and methods. McCarthy Tétrault LLP / mccarthy.ca 11764519 22
  23. 23. What is a CEM? A “commercial electronic message” is an electronic message that, having regard to the content of the message, the hyperlinks in the message to content on a website or other database, or the contact information contained in the message, it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity, including an electronic message that (a) offers to purchase, sell, barter or lease a product, goods, a service, land or an interest or right in land; (b) offers to provide a business, investment or gaming opportunity; (c) advertises or promotes anything referred to in paragraph (a) or (b); or (d) promotes a person, including the public image of a person, as being a person who does anything referred to in any of paragraphs (a) to (c), or who intends to do so. (s.1(2)) McCarthy Tétrault LLP / mccarthy.ca 11764519 23
  24. 24. What is a CEM? –cont’d A “commercial activity” is any particular transaction, act or conduct or any regular course of conduct that is of a commercial character whether or not the person who carries it out does so in the expectation of profit, other than any transaction, act or conduct that is carried out for the purposes of law enforcement, public safety, the protection of Canada, the conduct of international affairs of the defence of Canada” (s.1(1)). McCarthy Tétrault LLP / mccarthy.ca 11764519 24
  25. 25. General Exceptions 1. Where sender and recipient have a personal or family relationship (s.6(5)(a)) (Draft IC Regs -2) 2. An inquiry or application related to a person engaged in a commercial activity. (s.6(5) (b)) 3. Messages sent in response to requests, inquiries or complaints (Draft IC Regs -3(b)) 4. Messages sent due to a legal obligation or to enforce a legal right including a pending legal right (Draft IC Regs - 3(d)) 5. Messages sent within an organization that concern the business affairs of that organization (Draft IC Regs - 3(a)(i)). 6. Messages sent between organizations with a business relationship that concern the recipient’s business, role, functions or duties (Draft IC Regs - 3(a)(ii)). 7. Messages sent by a foreign organization to a foreign recipient that is accessed while roaming in Canada (Draft IC Regs – 3(c)) McCarthy Tétrault LLP / mccarthy.ca 11764519 25
  26. 26. Consent: Express Express (subject to unsubscribe): i. obtained orally or in writing for a particular purpose ii. clearly and simply set out prescribed form and content information including the name of the requester, the purpose of the request, the mailing address, email or website of the requester; and iii. be sought separately for each act described in the Act (sending of messages, alteration of transmission data, installation of a computer programs) McCarthy Tétrault LLP / mccarthy.ca 11764519 26
  27. 27. Getting Express Consents to Send CEMs s.6 of the Act and s. 4 of the CRTC Regs Prescribed Requirements: (a) the purpose or purposes for which the consent is being sought; (b) the name by which the person seeking consent carries on business, if different from their name, if not, the name of the person seeking consent; (c) if the consent is sought on behalf of another person, (i) the name by which the person on whose behalf consent is sought carries on business, if different from their name, if not, the name of the person on whose behalf consent is sought; and (ii) a statement indicating which person is seeking consent and for which person consent is sought; (d) the mailing address, and either a telephone number providing access to an agent or a voice messaging system, an email address or a web address of the person seeking consent or, if different, the person on whose behalf consent is sought; and (e) a statement indicating that the person whose consent is sought can withdraw their consent. McCarthy Tétrault LLP / mccarthy.ca 11764519 27
  28. 28. Consent: Implied Implied (expires after an initial period – often 2 years): Based on a closed list of categories: i. where there is an ‘existing business relationship’ or an ‘existing non-business relationship.’ ii. where the recipient has “conspicuously published” the electronic address without a statement that the person does not wish to receive unsolicited CEMs AND the message is relevant to the person’s business, role, functions or duties in a business or official capacity; iii. where the recipient has disclosed, to the person who sends the message, the electronic address without indicating a wish not to receive unsolicited CEMs, AND the message is relevant to the person’s business, role, functions or duties in a business or official capacity; McCarthy Tétrault LLP / mccarthy.ca 11764519 28
  29. 29. Implied Consent to Send CEMs “Existing business relationship” is a business relationship arising from (s.10(10)): a) the purchase or lease of a product, goods, a service, land or an interest or right in land, within the 2-year period immediately before the day on which the message was sent; b) the bartering of anything mentioned in paragraph (a)... c) a written contract entered into between the recipient and the sender in respect of a matter not referred to in any of paragraphs (a) to (c), if the contract is currently in existence or expired within the period referred to in paragraph (a); or d) an inquiry or application, within the 6-month period immediately before the day on which the message was sent, made by the recipient to the sender, in respect of anything mentioned in any of paragraphs (a) to (c). McCarthy Tétrault LLP / mccarthy.ca 11764519 29
  30. 30. Implied Consents to Send CEMs “Existing non-business relationship” is a non-business relationship arising from (s.10(13)): a) a donation or gift made by recipient to the sender within the 2-year period immediately before the day on which the message was sent, where the sender is a registered charity, a political party or organization, or a person who is a candidate for publicly elected office; b) volunteer work performed by the recipient for the sender, or attendance at a meeting organized by the sender, within the 2-year period immediately before the day on which the message was sent, where the sender is a registered charity, a political party or organization, or a person who is a candidate for publicly elected office; or c) membership, as defined in the regulations, by the recipient, in the sender, within the 2-year period immediately before the day on which the message was sent, where the sender is a club, association or voluntary organization, as defined in the regulations. McCarthy Tétrault LLP / mccarthy.ca 11764519 30
  31. 31. Implied Consent to Send CEMs (Draft Industry Canada reg. 7.(1)) Membership is the status of having been accepted as a member of a club, association or voluntary organization in accordance with the membership requirements of the club, association or organization. A club, association or voluntary organization is a non-profit organization that is organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any purpose other than profit, if no part of its income is payable to, or otherwise available for the personal benefit of any proprietor, member or shareholder of that organization unless the proprietor, member or shareholder is an organization the primary purpose of which is the promotion of amateur athletics in Canada. McCarthy Tétrault LLP / mccarthy.ca 11764519 31
  32. 32. What must be in each CEM ¬ CRTC reg: 2.(1) For the purposes of subsection 6(2) of the Act, the following information must be set out in any commercial electronic message: ¬ (a) the name by which the person sending the message carries on business, if different from their name, if not, the name of the person; ¬ (b) if the message is sent on behalf of another person, the name by which the person on whose behalf the message is sent carries on business, if different from their name, if not, the name of the person on whose behalf the message is sent; ¬ (c) if the message is sent on behalf of another person, a statement indicating which person is sending the message and which person on whose behalf the message is sent; and ¬ (d) the mailing address, and either a telephone number providing access to an agent or a voice messaging system, an email address or a web address of the person sending the message or, if different, the person on whose behalf the message is sent. McCarthy Tétrault LLP / mccarthy.ca / 12225322
  33. 33. Unsubscribe Requirements The Unsubscribe Mechanism must: ¬ be set out clearly and prominently and be able to be readily performed; ¬ enable the recipient to indicate, at no cost to them, the wish to no longer receive any commercial electronic messages, or any specified class of such messages, from the sender, using (i) the same electronic means by which the message was sent, or (ii) if using those means is not practicable, any other electronic means that will enable the person to indicate the wish; and ¬ specify an electronic address, or link to a page on the World Wide Web that can be accessed through a web browser, to which the indication may be sent (the address or Web page must be valid for 60 days). (s.11(1) & (2)) McCarthy Tétrault LLP / mccarthy.ca 11764519 33
  34. 34. Use of web to comply with CEM and unsubscribe formalities ¬ CRTC reg: 2.(2) ¬ If it is not practicable to include the information referred to in subsection (1) and the unsubscribe mechanism referred to in paragraph 6(2)(c) of the Act in a commercial electronic message, that information may be posted on a page on the World Wide Web that is readily accessible by the person to whom the message is sent at no cost to them by means of a link that is clearly and prominently set out in the message. McCarthy Tétrault LLP / mccarthy.ca / 12225322
  35. 35. CASL: promotes or discourages use of electronic messaging systems? Coalition of Business and Technology Associations ¬“CASL is drafted to sweep in a wide range of messages. As a result, there is significant uncertainty about what measures are necessary to comply. Guidance received to date from the CRTC suggests that a range of service messages including messages warning consumers when they will incur roaming or other extra charges, or bringing warranty issues to their attention, could be illegal to send if consumers inadvertently unsubscribe from receiving all CEMs from an organization. CASL will therefore make it more difficult for organizations to develop services that rely purely on electronic means of doing business – digital economy businesses – because it may enable customers to unsubscribe from receiving service and transactional messages.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  36. 36. CASL: promotes or discourages use of electronic messaging systems? Coalition of Business and Technology Associations ¬“CASL, as it is currently drafted, requires almost a message by message content review to determine if it is caught within the scope of the Act which is something that cannot be done systemically. This runs directly counter to the stated purpose of the Act (promoting the efficiency and adaptability of the Canadian economy, encouraging the use of electronic means to carry out commercial activities) and also results in unwarranted and unnecessary liability and risk for organizations.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  37. 37. CASL: promotes or discourages use of electronic messaging systems? Interactive Advertising Bureau of Canada ¬ “One of the critical challenges posed by CASL is the incredibly broad definition of a CEM. While the Regulatory Impact Analysis Statement (“RIAS”) contained a statement that companies were “misinterpreting” the breadth of the definition of CEM, the actual wording of the definition is so broad that a wide class of electronic messages may very well fall within the CEM classification. For instance, the reference in the definition to having regard to “hyperlinks in a message to content on a website” and the broad reference to “advertising” could result in the scope of CASL dangerously extending far beyond the original intent and spirit of the Act…The failure to limit the scope of CEM in this regard will undoubtedly have significant adverse economic consequences for all companies involved in the digital ecosystem.” Consistent with Crookes v Newton? McCarthy Tétrault LLP / mccarthy.ca / 12225322
  38. 38. CASL: promotes or discourages use of electronic messaging systems? The Canadian Chamber of Commerce ¬ “The broad scope of the definition of electronic messages means any electronic message containing a hyperlink to a web page designed for commercial intent would be considered a CEM. Most business email will contain a link to the company home page yet it is unreasonable to assume that every message sent is of a commercial nature.” Consistent with Crookes v Newton? McCarthy Tétrault LLP / mccarthy.ca / 12225322
  39. 39. CASL –technologically neutral? CWTA ¬“While the intent of the Act and the Regulations is for a technology-neutral application of the rules to all forms of electronic messaging, CWTA remains concerned that the rules will not fully consider and address the unique limitations of CEMs that do not resemble an email. Regulations that do not fully consider the limitations of SMS messages will cause considerable compliance challenges and will fully undermine the relevance and impact of mobile messaging as a marketing platform.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  40. 40. CASL –technologically neutral? Information Technology Association Canada (ITAC) ¬“Through compliance-planning activities, ITAC’s members have become increasingly aware of the breadth, scope and inflexibility of the CASL rules that govern both the sending of electronic messages and the installation of computer programs. We believe that these rules are unnecessarily complex and broad. The application of the electronic messaging rules to closed and managed messaging platforms, such as short-codes services and instant messaging services like Blackberry Messenger, serves as a case in point. These platforms are self-regulating and provide consumers with strong protections for managing unwanted messages. Applying CASL’s prescriptive rules on these platforms creates significant practical compliance issues and related costs, with no corresponding benefit to consumers.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  41. 41. CASL: Extra-territoriality problem? ¬ Philip Palmer (Formerly of Industry Canada) ¬ “[T]he extra territorial reach of CASL has the following unintended effects: ¬ it imposes compliance costs on companies doing business from Canada that do not have to be met by their competitors in those markets; ¬ it exposes Canadian companies to both administrative monetary penalties and class actions that are not faced by their competitors; ¬ it requires dual compliance with local and Canadian law (with Canadian law trumping in the event of a conflict); and, ¬ it encourages Canadian companies to move their back office operations (and well-paying jobs) from Canada to jurisdictions where CASL will not have application.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  42. 42. CASL: Extra-territoriality problem? Philip Palmer (Formerly of Industry Canada) ¬“Clearly the application of CASL to messages that are compliant with local laws impacts the competitiveness of Canadian businesses who operate in foreign jurisdictions. At the same time, the measure contributes nothing to the protection of Canadian residents. In effect, the approach taken in CASL treats foreign jurisdictions paternalistically in applying Canadian law – even where that jurisdiction has a domestic anti-spam regime (such as the United States and the countries making up the European Union).” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  43. 43. CASL: Extra-territoriality Problem AccessPrivacy ¬“Given the breadth and nature of CASL requirements (and the potential penalties for non-compliance and private right of action), we have received consistent comments from Canadian service providers that they will no longer be able to provide services to US and other foreign-based clients (relating to marketing efforts in those jurisdictions) if CASL were to apply to the sending of such CEMs. USbased companies will not expect CASL to apply to their US-based marketing efforts, and none will want to comply with all of CASL’s more onerous requirements in such circumstances. Moreover, given the private right of action, it would be practically unworkable for service providers and their US- or foreign-based clients to assume any potential risk of CASL applying in these circumstances.” ¬ McCarthy Tétrault LLP / mccarthy.ca / 12225322
  44. 44. CASL: consistent with Charter values? ¬ Is CASL consistent with Charter values e.g., United Food v Alberta? ¬ It covers all CEMs and computer programs of any kind and provides no functional definition of that term. ¬ The Act contains no general exception for messages that are not harmful or desirable. This is unlike legislation in any other country. ¬ The definition of “publicly available information” is artificially narrow. ¬ There is no general exemption for messages sent for free expression. ¬ There is no general exemption allowing organizations to send messages (or install programs) that is reasonably required in the legitimate operation of their businesses e.g., the existing business relationship exception is arbitrary and is not based on any real implied or inferred consent principle, as in Australia. McCarthy Tétrault LLP / mccarthy.ca / 12225322
  45. 45. Rational connection and efficacy? Coalition of Business and Technology Associations ¬ “It is well known that most real threats from CEMs such as those that are false or misleading and from spam, malware and spyware originate outside of Canada. These are well out of the reach of the Commission’s enforcement abilities, and will not be addressed by treating all Canadians and Canadian organizations as if they were originators of spam, malware and spyware, as CASL does.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  46. 46. Rational connection and efficacy? The Canadian Chamber of Commerce ¬ “Ultimately, it is not clear that CASL will solve the problem of nuisance/fraudulent messages or of nuisance/malicious software, which are generally initiated outside the jurisdictional reach of the CRTC, the agency tasked with enforcement. Imposing this kind of financial burden and economic disruption without a very high expectation of solving the problem is counterproductive for all.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  47. 47. Disproportionate and deleterious impacts? Ontario Nonprofit Network 1.The regulations as presented do not support or accommodate the organizational structures and community building work of the thousands of small and mid-size charitable and nonprofit organizations providing public benefit in communities. 2.Small and mid-size charitable and nonprofit organizations cannot comply with CASL and its regulations and undertake their day-to-day work. There is a fundamental conflict that will either impede their work in communities or, as noncompliant, leave them vulnerable to potentially prohibitive fines and private actions. 3.The legislation and regulation will place undue financial and administrative burden on those nonprofit organizations which attempt to comply. 4.The prohibitive costs and risks associated with requiring that charities and nonprofit organizations manage and maintain express and implied consent records across their complex databases and ever-changing community connections and relationships is not justified given their negligible participation in the generation of spam. McCarthy Tétrault LLP / mccarthy.ca / 12225322
  48. 48. Disproportionate and deleterious impacts? Imagine Canada ¬“Legislation and regulations aimed at controlling spam in Canada should not be so overly broad in scope that they impede and make more costly the electronic communications of registered charities, including universities, for purposes such as fundraising. The Canadian Radio-television and Telecommunications Commission's Unsolicited Telecommunications Rules that are intended to control a related problem — telemarketing — reflect this principle by exempting from the application of the National Do Not Call List Rules any unsolicited telecommunications made by or on behalf of a registered charity.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  49. 49. Disproportionate and deleterious impacts? Imagine Canada 1. The definition of “commercial electronic message” is sufficiently broad that it will restrict the ability of many charities and public-benefit nonprofits to carry out activities that further their missions to serve Canadians and communities. 2.The draft regulations, as presented, would place undue financial and administrative burdens on charities and public-benefit nonprofits. 3.The draft regulations do not reflect or accommodate the ways in which charities and public benefit nonprofits communicate with each other, with key stakeholders, or with the general public. 4.The draft regulations are inconsistent with other domestic policies and with the federal government’s stated objectives regarding philanthropy and the facilitation of earned income by charities and public-benefit nonprofits. 5.The draft regulations are inconsistent with policy developments internationally. McCarthy Tétrault LLP / mccarthy.ca / 12225322
  50. 50. Disproportionate and deleterious impacts? Canadian Bar Association ¬“This limited definition of a non-business relationship will exclude many relationships within the charity and NPO sector. The relationships of organizations with a focus on education, medical care, research collaboration and public affairs, for example, may not be based on donations and gifts, volunteer work or the definition of “club, association or voluntary association” included in the Regulations, and in those circumstances they may not be entitled to implied consent. It seems to be an inadvertent consequence of the legislation that charities and NPOs be placed at a disadvantage compared to businesses on the requirement to obtain express consents for electronic communications. This unnecessary new layer of administration will be a drain on the limited resources of charities and NPOs and will impede their good works.” ¬“It is critical that the uncertainty about application of the Act to the electronic communications of charities and NPOs be resolved before the Regulations come into force. Otherwise, charities and NPOs will be faced with the monumental task, with limited resources, of seeking consent for many of its electronic communications without a clear understanding of whether it is required.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  51. 51. Disproportionate and deleterious impacts? Canadian Bar Association ¬“The CBA Sections reiterate the concern expressed in our previous submission on the vitiation of prior express consents valid under federal, provincial or territorial legislation. There does not appear to be a policy rationale for undermining the good faith effort by organizations to obtain legally valid consents prior to the Act coming into force. Recontacting consumers for consent already provided and automatic expiry of consent after a transition period will likely create confusion among consumers and undermine confidence in electronic commerce, contrary to the legislative objective. The CBA Sections recommend an additional regulation stating that a valid consent given under PIPEDA or other privacy legislation prior to the Act coming into force be deemed a valid consent under the Act.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  52. 52. Disproportionate and deleterious impacts? Interactive Advertising Bureau of Canada ¬ “In our view, there is no policy rationale for the statute to adversely impact organizations that have previously obtained valid express consents under Canadian Privacy Legislation. Without further regulatory clarification in this regard, organizations would be compelled to “re-consent” their marketing lists prior to CASL coming into full force. Unquestionably, consumers would not expect or desire to receive multiple requests by organizations for another express consent prior to CASL coming into full force. Consumers would expect to continue to receive CEMs they’ve previously consented to receive. A re-consenting process will result in Canadians collectively receiving millions of messages to reconfirm their consent. Consumers will consider this an annoyance, and these types of messages may often be perceived as phishing. This is undoubtedly completely inconsistent with the stated purpose of CASL, which is to reduce the volume of unwanted messages. Consumers bombarded with these messages from companies across the country will just start ignoring and deleting the messages, which will result in list attrition for reasons that have nothing to do with whether an individual wants to continue receiving messages from a particular company. Moreover, a re-consenting process is an expensive process, which is a particular burden to our small and medium sized members.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  53. 53. Disproportionate and deleterious impacts? Philip Palmer (Formerly of Industry Canada) ¬ “No benefit to consumers is gained by restricting the transition period to implied consents through the existing business relationship. There is no reason why existing business relationships should be favoured over other forms of implied consent. ¬ The failure to act on the inequitable disparity between existing business relationships and other types of implied consent serves no discernible purpose and imposes unjustifiable compliance costs on business.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  54. 54. Disproportionate and deleterious impacts? Coalition of Business and Technology Associations ¬“We have now been working with CASL for over two years and have a better appreciation of the compliance challenges and the potential for unintended consequences resulting from CASL‟s regulatory approach much more than we did when CASL was passed by Parliament. The inclusion in CASL of both open ended prohibitions and prescriptive requirements makes it very difficult to anticipate all of the impacts that CASL will have. We are now more concerned than ever that CASL will actually result in more harm than benefit to the Canadian economy and to digital commerce. We are also concerned that the harm will be exacerbated by the potential for litigation under the private rights of action.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  55. 55. Disproportionate and deleterious impacts? The Canadian Chamber of Commerce ¬ “This legislation will impose significant compliance costs on businesses and other organizations that, in many cases, are ill-equipped to undertake them. For instance, as of 2011, approximately 70% of small businesses polled stated they do not currently have a website. As is implied in the CRTC Compliance Guideline noted above, maintaining a website or the purchase of a service to maintain the necessary compliance data will be obligatory. Businesses already face many regulatory compliance burdens and in its current form, CASL will result in economic hardship for both business and not-for-profit organizations. ¬ Without significant modifications to the regulations, this legislation will impede commercial speech, an essential ingredient of market competitiveness.” McCarthy Tétrault LLP / mccarthy.ca / 12225322
  56. 56. Questions McCarthy Tétrault LLP / mccarthy.ca / 12225322
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