Law Times

PAGE 12 FOCUS April 18, 2011 • lAw Times Businesses urged to prepare for anti-spam act O BY ROBERT TODD Law Times rganizations that send electronic messages to the public are being urged to tighten up their protocols in response to new legislation that could lead to fi nes as high as $10 million. Th e Fighting Internet and Wireless Spam Act received Royal assent in December. It created new laws and widened the net of false and misleading marketing provisions within the Competition Act to include elec- tronic messages. It also tightens exemptions within the Personal Information Protection and Electronic Documents Act. Observers view the provi- sions within the anti-spam act as substantially tougher than those in other jurisdictions, in- cluding the United States. "If you compare [it] with the When it comes to IP in Canada, We're Well Read Ridout & Maybee LLP: Editors of the Canadian Patent Reporter it all starts somewhere www.ridoutmaybee.com CAN-SPAM [Controlling the Assault of Non-solicited Por- nography and Marketing] Act of the U.S., you will see that [it's] way more restrictive," says Roland Hung, an associate with Gowling Lafl eur Henderson LLP in Calgary. Perhaps most glaringly, the Canadian legislation requires obtaining opt-in consent before businesses can send commercial e-mails. CAN-SPAM includes only an opt-out provision, which means e-mails can go to anyone as long as they include an opportunity to decline fu- ture communications. In addition, the Canadian bill includes anti-phishing and anti-malware provisions, which the U.S. legislation doesn't guard against. Amendments to PIPEDA under the anti-spam act in- clude a new prohibition on the unauthorized collection of electronic addresses and per- sonal information using com- puter programs designed to accumulate that data. As well, the enforcement and penalty mechanisms are particu- larly strong. Individuals face pen- alties of up to $1 million, while corporations can be liable for up to $10 million in fi nes. "Th at gives the [Canadian Radio-television and Telecom- munications Commission] broad powers," says Hung. Th e act is not yet in force, Ridout_LT_Feb9-16_09.indd 1 2/5/09 10:52:55 AM OUTSOURCING TRANSACTIONS A PRACTICAL GUIDE Fasken Martineau DuMoulin LLP Edited by: C. 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CANADA LAW BOOK® www.lawtimesnews.com CLB_Outsourcing Transactions.indd 1 4/14/11 10:40:04 AM • mismanagement of outsourcing transactions • outsourcing in the UK outsourcing involves many areas of law such as employment, pension, tax, and it. this looseleaf service includes chapters on each of these subjects written by experts in those fields. Visit canadalawbook.ca or call 1.800.565.6967 for a 30-day no-risk evaluation. however, with the government yet to draft the accompanying regulations. Th e recent fall of the federal Conservative government means it's unclear just when those regulations will come forth. Th e legislation does include certain exemptions, most impor- tantly for non-commercial mes- sages. It may be diffi cult to identi- fy whether certain data collection falls under this clause, however. Hung uses the example of online contests in which in- dividuals can increase their chances of winning by provid- ing the contact information of friends or family. He believes the subsequent e-mails sent to those additional contacts would trigger protection under an ex- emption for personal or family relationships. More clarity on that question should come once the accompanying regulations are available. It's also important to note that the defi nition of "commercial electronic messages" within the legislation is broad enough to al- low the CRTC to deem certain materials as spam. "It doesn't have to be just in text," notes Hung. "It could be sound, text, voice, image. It could be anything really." Th e legislation also makes way for implied and express consent. Express consent forces orga- nizations and individuals to pro- vide the purpose for which they're seeking it, identify the person or business requesting it, and pro- vide any prescribed information The anti-spam act gives the CRTC broad powers, says Roland Hung. that's necessary. Implied consent generally comes into play when there's an existing relationship between the sender and recipient. It also sur- faces when the recipient has pub- licly published an e-mail address and hasn't expressed a desire not to receive commercial messages. While organizations aren't yet subject to the new legisla- tion, Hung is urging clients to take three steps to begin transi- tioning towards it: • Include prescribed informa- tion and provide an easy-to- use opt-out mechanism in any commercial electronic messages. • Ensure that messages go only to individuals who have given implied or express consent to receive them and haven't sub- sequently opted out. • For computer software busi- nesses, ensure electronic distri- bution complies with consent requirements. Th at third suggestion addresses the anti-malware provisions of the act, something Hung is particu- larly concerned about for clients that require software to conduct online transactions. "A lot of company web sites sometimes automatically down- load cookies onto somebody's computer or some kind of soft- ware onto somebody's computer before they can even use that web site," he notes. "Once this act comes into force, they have to be more cognizant about advising their customers or clients about what type of software is being downloaded." Constantinos Ragas, an as- sociate at Fasken Martineau DuMoulin LLP in Montreal, believes the new rules will chal- lenge many organizations but says the biggest inconvenience will come for small businesses. "A small-business owner wears enough hats already," Ragas notes. "It's tricky because how is a small-business owner supposed to keep track of all of these legal restrictions and run their mar- keting at the same time?" Most will be looking to third-party providers in light of the new legislation, he sug- gests. But the biggest caveat to that approach, he adds, is the need to ensure the business is adequately indemnifi ed if the third-party provider breaches the legislation.

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