Anti-spam exemptions follow industry consultation, Moore says

The federal government’s long-delayed anti-spam laws will come into force next July with new regulations that include partial exemptions for charities and business-to-business communications as part of a “classic Canadian compromise,” Industry Minister James Moore said. In a release Wednesday, Industry Canada said the federal government has published its final regulations that outline how its anti-spam law will be applied to companies that use electronic communications to promote their services or products. The law, which has sat idle since it received royal assent in December 2010, will come into force on July 1 and will include a series of exemptions the department considered following three rounds of consultations over the past two years. “A bunch of people offered suggestions on how we ought to implement this law and the ,” Moore said during an interview at his Parliament Hill office on Wednesday. “We listened to them, we agreed with some, we disagreed with others and what you see today is the compromise that we’ve reached.” Under the anti-spam law, Canadian businesses will face new restrictions on how they use electronic communications to attract new customers. Among other stipulations, the law will require businesses to gain consumers’ consent before sending them electronic sales pitches, and will limit their ability to collect and use caches of email addresses and other contact info of potential customers with whom they don’t already have a commercial relationship. Moore said Wednesday that the law sat idle for nearly three years because businesses and other stakeholders were lobbying the government for exemptions to the law or to change it entirely. Among the complaints, critics have said the law will prevent companies from following up on legitimate business opportunities, deter them from delivering useful information to their customers and could open the door to class-action lawsuits against small businesses that inadvertently break the law. Two of the exemptions included in the final regulations will allow charities and political parties to continue online fundraising campaigns without first gaining explicit consent from everyone on their email lists. Another will allow companies to send a single electronic communication to individuals whose contact info they’ve received through a “third party referral.” Others parts of the regulations create exemptions for business-to-business communications, for “non-transactional business communications,” and for companies that contact people in other countries that also have their own anti-spam laws, in which case the laws of that foreign country would take precedence. In an effort to “reduce uncertainty for Canadian businesses,” Industry Canada said, the government also delayed until July 1, 2017 consumers’ ability to launch lawsuits against companies they believe have contacted them in violation of the law. Moore said each of the exemptions that made it into the final regulations stemmed from consultations he held with stakeholders this September after he was appointed industry minister. He said this included some “perpetual” issues that were also brought up during each of the prior consultations, which were conducted by previous industry minister Christian Paradis. “What we arrived at was, I think, a pretty reasonable, classic Canadian compromise,” Moore said. “I think it will work. We’ve had strong support for this and I’m glad it’s finally put into place.” David Elder, a communications lawyer at Stikeman Elliott LLP in Ottawa who has criticized the law in the past, said in a telephone interview that Canadian companies that rely on electronic communications will have a hard time updating their procedures in advance of the law taking effect in July. The government originally said it would give companies a year’s notice before bringing the law into force, Elder said, noting that companies now have seven months to update their contact lists and marketing procedures. “There could be a lot of processes that businesses will have to change to start collecting explicit consent through whatever means they can,” he said. “Hopefully they’ll be in a position come Canada Day to come into compliance.” Moore said he doesn’t expect the shortened implementation timeline will serve as an “obstacle” to Canadian companies. Companies that do rely on unsolicited communications to attract the attention of potential consumers, he added, are operating under an increasingly “obsolete” business model due to the plethora of online spam filters. “This legislation was passed some time ago,” Moore said. “People have had a long time to know that this was on its way and they’ve had time to make adjustments.” Under the anti-spam law, starting on Jan. 15, 2015, companies will also typically need consent to install software or software updates on consumers’ computers or other electronic devices, a requirement that some telecom service providers feared would prevent them from providing much-needed security updates to protect their networks from potential threats. To address that concern, the department said, the final anti-spam regulations said telecom providers have the “deemed consent” of their subscribers “to install computer programs to protect the security of the network from a current and identifiable threat to the availability, reliability, efficiency or optimal use of its network.” Anti-spam bill critic Barry Sookman, a partner with McCarthy Tetrault in Toronto, said in a telephone interview that the exemptions and other amendments included in the final anti-spam regulations improve the bill, though they don’t address some of what he called its “fundamental problems.” Among other things, Sookman said, the government’s definition of what types of commercial messages will be restricted under the law remains “vague,” while its exemption for charities doesn’t go far enough. “It’s still really problematic for charities and not-for-profits because they still have communications to members that aren’t solely related to donations,” Sookman said. “For example take the Cancer Society: they do a monthly bulletin that they send out to people who are suffering and it happens that it’s supported by an ad of somebody. That whole bulletin could become a commercial electronic message, and so they may not be able to send them out without spending a lot of money to update their lists.” Michael Geist, the Canada research chair in Internet and e-commerce law at the University of Ottawa and a proponent of the bill, said in a telephone interview that issues like exemptions for charities have been debated several times over the past four years, including when the bill was before parliament. Some of the exemptions included in the final regulations, he said, “water down” the original intent of the law, though not its “core provisions.” “While the government has seen fit to choose some of these exemptions or delays, it does undermine some of the initial proposal or the initial plan," Geist said. "But at the same time the core provisions around moving towards opt-in, creating strong enforcement powers and penalties, that’s what distinguished this law and those all remain intact.” In the frequently-asked-questions section posted on a website about the anti-spam law, the government said the CRTC, which will be tasked with enforcing the anti-spam bill, will be able to impose administrative penalties on anyone that violates the law, with the maximum penalty reaching $1 million per violation for individuals and $10 million for companies and other organizations. Moore said Wednesday that the government considers the anti-spam law a part of the “consumer-first” agenda it announced in the throne speech in October and as part of another long-delayed policy, its digital economy strategy. First announced as an initiative by the government in 2009, the digital economy strategy has similarly sat idle in recent years, though it will become a “front-burner issue” early in the new year, Moore said. — With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Anti-spam exemptions follow industry consultation, Moore says

News | December 4, 2013

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