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Spam law to set sail next year

Many businesses will require legal services to assist with compliance


By Anatoly Dvorkin

December 07 2012 issue


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Canadaís anti-spam law was a long time in the making. Efforts to arrive at legislation to deal with unsolicited commercial e-mail, text messages and other forms of electronic communications (colloquially known as spam) had been under way since 2004.

Now that the law, Bill C-28, which received royal assent in December, 2010, is expected to be entered into force in 2013, it is an appropriate time to review its highlights as well as the roles of the federal agencies that are charged with the responsibility of enforcement.

The act is a lengthy and complicated piece of legislation that will require many individuals and businesses to review and modify how they conduct themselves online. (Even its official name is a mouthful: An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23)

The core provisions are set out in sections 6-9 and prohibit the following activities:

  • sending of commercial electronic messages (including messages to e-mail addresses and social networking accounts, and text messages sent to a cellphone) without the recipientís prior consent;
  • alteration of transmission data in an electronic message that results in the message being delivered to a different destination without express consent; and
  • installation of computer programs without the express consent of the owner of the computer system or its agent, such as an authorized employee.

Contravention of any of these provisions is subject to a penalty of up to $1-million in the case of an individual and up to $10-million in the case of any other legal person. However, as the act is not yet in force, it remains to be seen how vigorously it will be enforced and how significant the penalties will be.

The other prohibitions are found in the amendments to the Competition Act, Personal Information Protection and Electronic Documents Act
(PIPEDA) and Telecommunications Act
. These prohibitions include:

  • the use of false or misleading representations online in the promotion of products or services;
  • the collection of personal information through accessing a computer system; and
  • the collection of electronic addresses by the use of computer programs or the use of such addresses, without permission.

Three federal agencies are responsible for enforcement of the act: the Canadian Radio-television and Telecommunications Commission (CRTC), the Competition Bureau and the Office of the Privacy Commissioner of Canada. The CRTC will be the primary enforcement agency and has been given the power to investigate, take action against and set administrative monetary penalties for contraventions of the act related to sending non-compliant electronic messages, altering transmission data and the installation of computer programs without consent. Appeals from orders made by the CRTC are to the Federal Court of Appeal. However, an appeal on a question of fact from an order made by the CRTC may be made only with leave to appeal from the Federal Court of Appeal.

Whereas Bill C-28 provides the CRTC with additional powers and responsibilities, it does not do the same for the Competition Bureau. Rather, the amendments to the Competition Act contained in the bill modify the act to enable the Bureau to more easily and effectively address false or misleading representations and deceptive marketing made online. Also, unlike the CRTC, the Bureau does not conduct hearings or make orders. Rather, as an independent law enforcement agency, the Bureau refers criminal contraventions of the relevant sections of the Competition Act to the Attorney General of Canada, who then decides whether prosecution is warranted.

In the event of a matter arising under the civil provisions of the Competition Act, the Bureau may apply to the Competition Tribunal, the Federal Court, or the superior court of a province for an order requiring the person to cease the activity, publish a corrective notice and/or pay an administrative monetary penalty.

Not surprisingly, the Office of the Privacy Commissioner of Canada is responsible for enforcing the legislation with respect to activities related to the unauthorized collection of personal information through accessing a computer system and the collection of electronic addresses by the use of computer programs or the use of such addresses without permission. As with the Competition Bureau, the act did not change the existing enforcement powers of the privacy commissioner. However, the amendments to PIPEDA do provide the privacy commissioner with increased discretion to decline to investigate a complaint, discontinue a complaint or refer it elsewhere.

Given the severity of the maximum penalties under the act and the complexity of the legislation, anyone involved in commercial activities online ought to begin thoroughly reviewing the act (before it enters into force) and ensuring their online activities are in compliance. Many organizations will require the services of a lawyer to assist with compliance efforts or, once enforcement commences, with defending against prosecution. Thus, the act also represents an opportunity for business lawyers and administrative lawyers to generate new business.

Anatoly Dvorkin is a founding partner of D2Law LLP, home of Fertility Law Canada. His practice is devoted to corporate and commercial litigation, business and technology law and administrative law. He can be reached at anatoly@d2law.ca.


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