Law Times

Law Times • June 2, 2014 Page 9 www.lawtimesnews.com Anti-spam act quickly approaching Low compliance rates mean busy time for regulators, lawyers By michael mcKiernan For Law Times egulators could be in for a busy time when Cana- da's anti-spam law finally goes live next month, according to lawyers who coach businesses on compliance. Almost four years aer Parlia- ment first passed it, the new law will be in force as of July 1. Despite the long lead time, lawyers are pre- dicting extremely low compliance rates by then. Anatoly Dvorkin, founder of Toronto firm D2Law LLP, provides consulting services on compliance under the act and says there's a huge discrepancy between the approach of larger, more sophisticated businesses and their small- to medium-sized counterparts. "e Bells and Rogers of this world, who have the resources to throw at it, are well aware and de- voting a lot of time and money to get ready," says Dvorkin. "ey don't want to be caught with their pants down. For smaller companies, it's not even that they're not prepared; it's more they don't even know this is coming. Unfortunately, for many, the first they will probably hear of [the law] is when they get a letter in the post saying they're not in compliance." e same pattern applies to law firms, according to Dvorkin, who says most of the big Bay Street players "have their ducks in a row" when it comes to compliance. "For small busy firms, they may be aware and they may not. Even if they are, they have enough on their plate getting their work done without worrying about [the new law]. I'd say the propor- tion of law firms prepared for July 1 is probably slightly higher than the rest of the business popula- tion, but they're not doing much better," says Dvorkin. J. Andrew Sprague, a lawyer with Miller omson LLP's infor- mation technology law practice group, says a lack of public aware- ness about the act has contributed to low compliance rates. e typi- cal response he gets from busi- nesses when he asks them about it is: "at doesn't apply to me. I'm not a spammer." "It's called Canada's anti-spam law but it encompasses so much more than what you would tradi- tionally think of as spam. People don't appreciate how broad its reach is," says Sprague. Canada was slow out of the gate on the anti-spam front. When Parliament passed the law in De- cember 2010, it made Canada the last G-7 nation to enact legislation on the issue. But it made up for lost time with one of the strictest regimes the world has seen. e act prohibits all unsolic- ited commercial electronic mes- sages unless the recipient has given explicit or implied consent to receive them. When he details the full impact of the act on previously ignorant small-business owners, Sprague notes "their eyes widen like deer in the headlights." An explanation of the potential penalties can send them over the edge: individuals in breach of the act can face admin- istrative monetary penalties of up to $1 million per violation, while corporations could be liable for as much as $10 million per violation. A private right of action against violators, which is to come into force in 2017, opens the door to anti-spam class actions with rem- edies capped at $1 million per day. "ere's disbelief that this can really be the law," says Sprague. "I still get some people ask- ing me if there's any way to get it repealed." Richard Austin, counsel to Deeth Williams Wall LLP in Toronto, says the lack of public knowledge of the bill could cre- ate problems for the three regu- lators tasked with enforcing the law: the Canadian Radio-televi- sion and Telecommunications Commission, the Competition Bureau, and the federal privacy commissioner. A spam-report- ing centre will collect complaints related to the law. "I think the enforcement agencies may well have a chal- lenge with the implementation," says Austin. "I think they may end up get- ting inundated with complaints, including some from people who don't fully understand the legislation." While repeal may be a bit of a long shot, another privacy lawyer says non-compliant companies and individuals may get a more realistic lifeline should the act face a constitutional challenge follow- ing its implementation. Daniel Glover, a partner at McCarthy Tétrault LLP's Toronto office, says the extremely broad prohibition in the act puts the leg- islation at risk, particularly in light of a recent Supreme Court deci- sion that struck down Alberta's privacy law. In Alberta (Informa- tion and Privacy Commissioner) v. United Food and Commercial Workers, Local 401, the country's top court ruled Alberta's Personal Information Protection Act was invalid because its infringement on the right to freedom of expres- sion was disproportionate to the benefits promoted by the law. "e same situation I think is happening here," says Glover. "Look at what kind of messag- es are being regulated by [the act], and the answer is really anything to do with commercial speech. ere are no exceptions relating to the value of the speech." Glover says the limited excep- tions in the act don't always cor- respond to business realities and notes the lack of a grandfather- ing clause for existing explicit consents obtained under the Personal Information Protection and Electronic Documents Act is problematic. e anti-spam act creates a higher bar for consent, rendering most existing ones use- less. Glover says the huge poten- tial penalties available under the spam bill means businesses are purging old mailing lists rather than risk testing their validity. "e result is a chill on com- mercial speech. . . . Conversa- tions that have been going on for many years based on one of these consents now have to be thrown away, and that is a Charter prob- lem in my view," says Glover. "ere's always an opportunity for business to try to re-opt in, but the problem is a lot of people don't read those messages carefully and don't realize they have to do any- thing to continue getting e-mails." Other potential constitutional arguments could focus on the size of the administrative monetary penalties as well as the question of whether the federal law strays into provincial territory. In the meantime, here's some advice from the experts on what to do for those still not in com- pliance with the law: • Get informed: "Unless you're informed on the basics, you can't even begin," says Dvorkin, who notes there's no shortage of lawyers for hire on the sub- ject. "Even if that's not in your budget, there's a lot of material available free online," he adds. • Get going: "It's never too late to start," says Austin. e law con- tains a due-diligence defence, so even if companies are a bit behind by July 1, regulators are likely to go a bit easier if they can show they're on track to be compliant. ey'll have to prove it, though. "Document your efforts," says Dvorkin. "If you're called on to defend your lack of compliance, it's much better to be able to say, 'Look at all this time and money we've spent to try to comply.'" • Spam now so you don't spam later: "It makes perfect sense to request consents now," says Austin. As of July 1, an e- mailed request for consent to spam will itself count as spam under the act. • Find the gaps: Sprague says a full internal audit will help discover exactly where com- mercial electronic messages are coming from. "People are always surprised because they realize things they didn't know were going on," says Sprague. • Fill the gaps: Once companies have found out what's going on, some things will prob- ably have to change. Employee education and ongoing moni- toring become the focus. "De- velop policies and procedures to shi what is currently going on to something compliant," says Sprague. 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