On July 1, 2014, certain provisions of Canada's Anti-Spam legislation ("CASL") will come into force and govern how businesses can communicate with Canadian recipients. Given its scope, CASL is considered to be one of the most stringent commercial electronic messaging laws in the world. Further,CASL will also regulate the installation of computer programs. This law attempts to address issues related to (i) unsolicited electronic messages (colloquially known as "SPAM"), and (ii) spyware/"phishing" issues. CASL will be of particular interest to businesses operating in the Canadian marketplace due to its impact on electronic communications practices and the significant penalties for non-compliance (including Administrative Monetary Penalties of up to $10 million for businesses and $1 million for individuals).

Electronic Communication

Subject to limited exceptions, CASL prohibits businesses from sending commercial electronic messages ("CEMs") unless a prior express "opt-in" consent from the recipient has been obtained. CEMs include (but are not limited to) emails, text messages, instant messages and certain forms of social media.  Additionally, CASL requires that CEMs disclose certain prescribed contact information about the sender and include an easy-to-use unsubscribe mechanism.

CASL includes several exceptions to its content and/or consent requirements that may be of particular interest to businesses.  These include exceptions for CEMS sent:

  • in response to a request, inquiry, complaint or otherwise solicited by the recipient;
  • between businesses, provided that the sender has a "relationship" with the recipient;
  • to addresses that have been conspicuously published;
  • to a recipient with whom the sender has an "existing business relationship" or a "non-business relationship"; and
  • to friends or family.

Computer Installations

CASL also prohibits, subject to limited exceptions, the installation of a computer program, in the course of a commercial activity, on the computer system of another without "opt-in" consent. These computer program provisions are broadly drafted and cover more than just malware or phishing scams. CASL will affect the installation of any computer code on a device with the ability to operate such code, including applications on tablets, smart phones, other mobile devices and programs embedded into consumer products (e.g., TV sets, PVRs, household appliances, etc.).  The CASL provisions relating to computer programs will come into force on January 15, 2015. 

Advice for Businesses

Given its broad scope and the significant penalties associated with non-compliance, CASL imposes substantial requirements on businesses that rely on CEMs as part of their business strategy. Given that July 1, 2014, is fast approaching, franchisors and franchisees should ensure that their internal policies, practice and protocols comply with CASL. In particular franchise businesses should assess their electronic marketing campaigns and update their contact lists. This includes determining if electronic communication recipients have granted consents to receive electronic communications and if not, whether any exceptions from the requirement to obtain consent applies. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.