Canada Issues First Penalties Under Anti-Spam Law

CRTC imposes over US$900,000 in fines against two companies, reminding U.S.- and foreign-based businesses about possible liability under Canada’s Anti-Spam Law

This month marks the issuance of the first two enforcement actions under Canada’s Anti-Spam Law (CASL) since provisions governing commercial electronic messages (CEMs), software downloads, and related conduct took effect July 1, 2014.

On March 5, 2015, the Canadian Radio-Television and Telecommunications Commission (CRTC) announced that it had imposed a fine against Compu.finder Inc., claiming the company violated CASL by sending CEMs to individuals without the recipients’ consent. The CRTC also alleged the CEMs did not include a functional unsubscribe mechanism as mandated by the law, and fined Compu.finder C$1.1 million (US$880,000) for its actions.

And just last week, on March 25, the CRTC announced a settlement with Plentyoffish Media, Inc. The CRTC alleged Plentyoffish violated CASL when it sent registered users of the company’s online dating site commercial electronic messages that, while containing an unsubscribe mechanism, did not display it prominently enough. The CRTC also alleged the unsubscribe mechanism could not be readily used by recipients of the emails. Under the settlement’s terms, Plentyoffish Media agreed to pay C$48,000 (US$34,800) to the regulator.

While the CRTC has only cited two domestic companies so far, foreign entities doing business in Canada should take note.

The CRTC’s actions against Plentyoffish Media and Compu.finder should serve as an alert to all companies that do business in Canada – including U.S. businesses – as CASL’s provisions regulate affect CEMs sent into Canada from other countries as well. Careful attention is required for U.S. businesses doing business with Canadian consumers, as CASL establishes an opt-in (i.e., consent-based) regime rather than an opt-out regime as is central to U.S. law, like the CAN-SPAM Act. CASL also has a broader definition of what makes a message “commercial” to bring it within the regulations’ scope, and its “CEMs” are not limited exclusively to emails. CASL also has different exceptions and allowances than, e.g., U.S. spam regulations.

While the CRTC thus far has cited only two domestic companies, all companies wherever located doing business in Canada should take note, especially as CASL’s final provisions go into effect over the coming two years. Provisions concerning unsolicited computer program or software installation came into effect as of Jan. 15, 2015, and CASL’s private right of action is slated to take effect July 1, 2017. Our advisory thoroughly analyzing CASL provides more in-depth information regarding CASL’s scope, exceptions, and enforcement mechanisms, as well as how the law affects domestic and foreign businesses in Canada.