Canada: First Corporation Found In Violation Of Canadian Anti-Spam Legislation

The Canadian Radio-television and Telecommunications Commission (CRTC) has issued its first-ever notice of violation under Canada's anti-spam law. This notice of violation, issued on March 5, 2015, to Compu-Finder, included a penalty of $1.1 million in relation to four alleged violations based on commercial electronic messages (CEMs) that were sent to Canadian recipients without their consent, as well as CEMs in which the unsubscribe mechanisms did not function properly.¹

Reasonableness of the penalty

The CRTC indicated that the amount of the fine was essential to ensure compliance with Canadian anti-spam legislation (CASL), stressing it was designed "to encourage a change of behaviour on the part of Compu-Finder such that it adapts its business practices to the modern reality of electronic commerce and the requirements of the anti-spam law."²  

Compu-Finder's history also contributed to the significance of the penalty. Since 2008, it has been subject to intense criticism for sending unwanted e-mails to unknown recipients.³  Notwithstanding the entering into force of CASL, Compu-Finder continued to spam hundreds of recipients daily. Additionally, Compu-Finder's alleged violations were significant. As the CRTC stressed, Compu-Finder "flagrantly violated the basic principles of the law by continuing to send unsolicited commercial electronic messages after the law came into force to email addresses it found by scouring websites."

In fact, 245,000 complaints were filed between July 2, 2014, and September 16, 2014, against Compu-Finder—in other words, more than 1,000 complaints per day. In total, they represented more than a quarter of complaints received by the CRTC since the CASL's entering into force.⁴

Follow-up to the notice of violation

Compu-Finder has 30 days: (i) to pay the penalty; or (ii) to make representations before the CRTC with respect to the amount of the penalty or the acts or omissions that constitute the alleged violations.⁵  In the latter case, the CRTC will decide, according to the balance of probabilities, the corporation's liability with respect to the violations and may impose, if appropriate, a less severe penalty.⁶  

The CRTC's decision may be appealed before the Federal Court of Appeal. If Compu-Finder fails to pay the fine or does not make any representations, it will be deemed to have committed the violation.⁷  

Our take

This notice of violation shows CRTC's intent: (i) to "change the behaviour on the part of all corporations" doing business in Canada, and (ii) to treat the "violations to the law very seriously."⁸

Despite the foregoing, our sense is the CRTC, at least in the early days, will be pursuing the largest and most persistent spammers to send a strong signal that willful disregard for the law will not be tolerated. It will probably be less concerned with those who make honest mistakes and demonstrate that appropriate corrective measures have been taken.

Footnotes

1 CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION, "CRTC Chief Compliance and Enforcement Officer issues $1.1 million penalty to Compu-Finder for spamming Canadians," [electronic resource] on line: .

2 Ibid, see also: An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, SC 2010, c. 23, s. 20 (2).

3 Supra note 1.

4 Supra note 1.

5 Supra note 2, s. 22.

6 Ibid, s. 25.

7 Ibid, s. 24.

8 Supra note 1.

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