Law Times

Page 10 April 22, 2013 Law Times • FOCUS Anti-spam regulations Critics not assuaged by watered-down rules BY MICHAEL McKIERNAN For Law Times A new set of watereddown regulations has done little to placate critics of Canada's antispam legislation who say it will still do more harm than good. In January, more than two years after the legislation received Royal assent, Industry Canada produced the second version of the accompanying electronic commerce protection regulations to define the law's key terms and concepts. That's the final step before the government can finally proclaim it to be in force. The department's first run at the regulations in July 2011 prompted an avalanche of comments, including 55 written submissions largely from business and industry associations 'As currently drafted, CASL would still cause great damage to consumers, small business, charities, and not-for-profit organizations,' says Barry Sookman. complaining about the cost and hassle of compliance. Industry Canada's revised effort broadens the definition of exempted personal relationships and also makes new limited exceptions for third-party referrals. But Barry Sookman, a senior partner with McCarthy Tétrault LLP in Toronto and an outspoken critic of the law, says the changes are cosmetic in nature. "There are very deep problems with CASL and while the regulations provide some help and are a good first step, basically I don't think that they go nearly as far as they need to in order to fix the structural problems with the law," says Sookman. "As currently drafted, CASL would still cause great damage to consumers, small business, charities, and not-for-profit organizations." Canada was slow off the mark on the anti-spam front but it made up for lost time with one of the most stringent regimes the world has seen. The act prohibits senders from delivering unsolicited commercial electronic messages to recipients without first receiving express or implied consent. That broadness has brought charges of overkill from some commentators, including Sookman, who say the law threatens to chill legitimate commercial speech with across-the-board prohibitions that capture a whole host of innocuous communications. "One would think that a spam bill would be good news for everyone. But when you see nearly every sector of the Canadian economy, who should be the potential beneficiaries, instead complaining, you know something is wrong," says Sookman. Regulatory lawyer Steve Szentesi says small- and mediumsized businesses without the budget for consultants to help bring them into compliance will suffer ONTARIO LAWYER'S PHONE BOOK 2013 YOUR MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. 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"The whole thing is misconceived and imposes a completely unnecessary burden on a lot of companies who aren't these huge entities," he says. "It's almost completely unworkable." Existing mailing lists are particularly problematic for many businesses. Some lobbying groups appealed to have consents obtained in the past under the Personal Information Protection and Electronic Documents Act grandfathered under the anti-spam legislation, but Industry Canada has rebuffed them. In a statement issued with the new regulations, the department said the anti-spam law was "intended to create a higher threshold" than PIPEDA for consent "in order to increase the level of transparency in electronic marketing." "If you've got a distribution list with 5,000 names on it, now you've got to go through it and figure out who has expressly consented, who is exempted, who is considered to have given implied consent, and who you have to purge," says Szentesi. "That alone will take a lot of time and a lot of head scratching for a lot of companies with better things to do." According to Szentesi, the burden imposed by the act is disproportionate to the problem presented by spam e-mails. "Is the harm really worth a 70page piece of legislation? I'd say I get maybe three or four e-mails a day that creep through my spam filter, so I can't really see it. This seems like consumer protection gone very wrong." Anatoly Dvorkin, a partner at D2Law LLP in Toronto, says the industry that has grown up around compliance with the act reminds him of the Y2K problem of more than a decade ago. "Billions were spent figuring out how to deal with it but in the end, the fears were completely overblown. I don't think this is all that different where the cost of compliance with the act is going to be more expensive than actually dealing with the threats it purports to deal with: Internet security, spam, and malware. The law assumes that everyone uses electronic communication in a disruptive way rather than targeting those that are actually using it in an abusive way." However, he says the "unbelievable" level of fines possible under the act make it impossible to ignore. Individuals who breach the act can face fines of up to $1 million while corporations could be liable for as much as $10 million. In addition, the act creates a private right of action against violators and thereby opens the door to anti-spam class actions with See Critics, page 11 www.lawtimesnews.com

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