Get ready for the anti-spam act

On 22nd December 2010 the House of Commons passed Bill C-28, which aims to regulate unsolicited electronic commercial messages, commonly called "spam". The act is expected to come into force by proclamation at the end of Autumn 2011.

When in force, this act will require Canadian individuals and companies, as well as foreign individuals and companies sending commercial electronic messages to Canada, to obtain prior consent from recipients before sending them commercial electronic messages. The law shall also require certain formalities, such as the requirement to include an exclusion mechanism in all messages. The prior consent requirement shall be substantially more restrictive than that contained in the equivalent US law (the CAN-SPAM Act), which requires companies to stop sending electronic messages only if the recipient manifests its refusal to receive them ("opt-out"). The law does not distinguish between legitimate and malicious messages or between individual and bulk messages; all require the prior consent of the recipient, which cannot be sought by a commercial electronic message.

Despite the presence of several exceptions that can soften the law's scope (eg, existing business, private or family relationships with the recipient), the fact remains that this legislation will have a significant impact on the business of all persons using electronic messages to promote their activities or to enter in contact with past or prospective clients. For example, existing mass mailing lists will need to be purged of all contacts for which the company is unable to prove consent or an exception.

The consequences of not respecting the new Bill C-28 will be significant. Indeed, the Canadian Radio-Television and Telecommunications Commission (CRTC), the agency responsible for enforcing this law, may investigate and institute penal proceedings and impose fines of up to C$10 million. The law also provides a private right of action, unusual in Canada, for recipients of unsolicited commercial electronic messages. This private right of action, which can be exercised as a class action, will pose a serious threat to large corporations which, if not compliant with Bill C-28, could be targeted by opportunistic plaintiffs seeking to collect the C$200 per infraction per plaintiff statutory penalty provided for by the law.

Since the adoption of the law in December 2010, the CRTC and Industry Canada have published (in July 2011) two regulations clarifying some of the obligations and exceptions contained in the law.

Faced with this significant risk, Canadian and foreign companies doing business in Canada should implement proactive measures to prepare for the entry into force of the law.