Law Times

Law Times • June 7, 2010 An online resource 1.800.263.3269 Focus On INTERNET/E-COMMERCE LAW Feds take another shot at spam New legislation includes punishments of up to $10 million BY PAUL BRENT For Law Times liament, returned in familiar form last month as bill C-28, the fi ghting Internet and wireless spam act. Th e anti-spam bill aims "to deter the most damaging and deceptive forms of spam, such as identity theft, phishing, and spy- ware, from occurring in Canada and to help drive spammers out of Canada," according to Indus- try Canada. Based on foreign anti-spam C measures — the United States, Britain, and Australia all have more developed legislation in that area — the new Canadian bill creates penalties for organi- zations or individuals respon- sible for sending unsolicited e-mail and cellphone spam that costs the economy as much as $3 billion every year in the form of security spending to block spam and other unwanted commercial messages as well as lost produc- tivity, according to federal In- dustry Minister Tony Clement. "Canada is seen as a haven for spammers because of the gaps in our current legislation . . . a place where spammers can reside and infl ict their damage around the world," he said. University of Ottawa law professor Michael Geist, a member of Ottawa's task force on spam, says the bill "deserves broad support and should be placed on the fast track given that it was eff ectively the sub- ject of extensive hearings from the industry committee." He notes the new legislation anada's anti-spam leg- islation, delayed with the prorogation of Par- is roughly the same as the elec- tronic commerce protection act that died in Parliament, which was "subject to considerable change based on compromises from all parties." Ottawa hopes to end Cana- da's status as a spammer "haven" through stiff fi nancial penalties: up to $1 million for individuals and $10 million for businesses. A private right of action will al- low anyone to take civil action against off enders. Under the bill, spam is defi ned as a commercial message sent via e-mail, instant messaging, phone or similar method. Sending spam is pro- hibited unless the recipient has consented and the message con- tains certain prescribed informa- tion identifying the sender and how to unsubscribe. Th ose exempt from the act include charities, political par- ties, surveys not conducted on behalf of a specifi c product, and businesses that can prove they've already established an online re- lationship with an individual. Th e act would be put into ef- fect through a "multi-faceted ap- proach to enforcement." Indus- try Canada is in the middle as co-ordinator with enforcement handled by the Canadian Radio- television and Telecommunica- tions Commission, the Compe- tition Bureau, and the Offi ce of the Privacy Commissioner. Th e bill would also establish a spam reporting centre. Under the legislation, the CRTC could levy penalties of up to $1 million per violation for individuals and $10 million for businesses. Th e Competition Bureau, meanwhile, could seek fi nes under the Competition Act, which allows for sanctions of up 'One of the things I find interesting is that they haven't defined spam in terms of the volumes' sent out to recipients, says David Canton. to $750,000 for individuals and $10 million for businesses with $1 million and $15 million per subsequent tively. Th e Offi ce of the Privacy Commissioner violation, would respec- enforce the legislation. Even though bill C-28 is "quite long and detailed," its broad defi nition of spam should be of concern to legitimate busi- nesses and their lawyers, said David Canton, a London, Ont.- based business lawyer and trade- mark agent with a practice fo- cusing on technology issues and companies. A key exemption from the bill, Canton pointed out in a column on the Slaw blog, would be an online mes- sage "that is sent by or on behalf of an individual to another indi- vidual with whom they have a personal or family relationship, as defi ned in the regulations." "One of the things I fi nd interesting is that they haven't defi ned spam in terms of the volumes" sent out to recipients, Canton tells Law Times. "It could conceivably aff ect one-off e-mails or instant messages that a business might send to someone. . . . It is not clear in my mind that any of the exceptions [in the bill] say that that is not spam." Th e bill, as it currently stands, likely wouldn't aff ect opt-in ser- vices such as Twitter but could conceivably force changes to business-based social media tools, such as LinkedIn, that al- low for unsolicited contact be- tween parties and communica- tions from service providers. Canton hopes some of the current questions surrounding what does and doesn't consti- tute spam will be addressed in the fi nal legislation. He doesn't believe, however, that that will end the work for lawyers in this area. "I think what lawyers have to understand is that we can't just dismiss the legislation from the perspective that 'Oh, that just applies to the bad guys, the spammers. We don't have to worry about that.' When the bill gets passed and the regulations get drafted, we will have to take some time to fi gure out in more detail how this aff ects things that well-intentioned businesses [and lawyers] do that they don't consider to be spam." In addition to tackling spam, bill C-28 would also prohibit the alteration of transmission data to route a message to an un- intended destination; curtail the installation or use of spyware in the course of commercial activi- ties (excluding things like cook- ies, HTML code, JavaScript, and operating systems); amend the Competition Act to prohibit false or misleading commercial representations made electroni- cally; and introduce changes to the Personal Information Protec- tion and Electronic Documents Act to prohibit the collection of personal information by means of unauthorized access to com- puter systems in violation of fed- eral laws and the unauthorized, automated compiling of lists of electronic addresses. Still, it's unclear whether pass- ing legislation dealing with spam will be enough. Th e United States has been far quicker off the mark, passing the so-called CAN-SPAM Act of 2003 to regulate the distribution of com- mercial e-mail, an eff ort that was quickly referred to as the "you can spam" act. As of the end of May, the United States was ranked the worst spam haven in the world with 2,241 "cur- rent live spam issues," far ahead of second-place China with 688. Canada ranked ninth with 199 active spam issues. LT PAGE 9 LegalAid_LT_May10_10.indd 1 www.lawtimesnews.com 5/3/10 4:08:22 PM

• Cover
• Civil Needs
• Expedited Justice
• Focus On Internet/E-Commerce Law