Canada’s anti-spam legislation has teeth – company fined $1.1 million for “spamming” businesses

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The Canadian Radio-television and Telecommunications Commission (“CRTC”) issued the first fine under the Commercial Electronic Messages (CEMs) provisions of Canada’s Anti-Spam Legislation (CASL) law showing that the law indeed has teeth.  On March 5th the CRTC issued a Notice of Violation to Compu-Finder which included a penalty of $1.1 million.  Compu-Finder has thirty days to contest the Notice or to pay the penalty. It can also request an undertaking with the CRTC to avoid or lessen the penalty.

The Notice of Violation states that between July and September of 2014, Compu-Finder sent e-mail messages promoting training courses without the consent of the recipients.  Furthermore, the Notice states that the unsubscribe mechanism contained in the e-mails did not function properly nor did it meet the requirements of the legislation.  The CRTC has indicated that Compu-Finder accounts for 26% of all complaints submitted to the Spam Reporting Centre.  The CRTC’s Chief Compliance and Enforcement Officer, had the following comments about Compu-Finder’s conduct and the investigation:

“Despite the CRTC’s efforts, Compu-Finder flagrantly violated the basic principles of the law by continuing to send unsolicited commercial electronic messages after the law came into force to email addresses it found by scouring websites. Complaints submitted to the Spam Reporting Centre clearly indicate that consumers didn’t find Compu-Finder’s offerings relevant to them.  By issuing this Notice of Violation, my goal is to encourage a change of behaviour on the part of Compu-Finder such that it adapts its business practices to the modern reality of electronic commerce and the requirements of the anti-spam law.”

CASL came into force on July 1, 2014 however many organizations may still not be familiar with its requirements. The legislation regulates a variety of activities, including how and when CEMs may be sent. CASL is administered through a complaints based system, with significant monetary penalties for non-compliance – up to $1,000,000 per infraction for individuals and up to $10,000,000 per infraction for corporations.

In our view

It is clear that the CRTC is taking concrete steps to enforce CASL, with a first focus on major offenders.  With this first substantial penalty, we expect that the CRTC will proceed to impose further significant penalties on organizations and individuals. 

The penalty issued to Compu-Finder indicates the severe consequences that may flow from non-compliance and organizations should review their practices to ensure that they are on-side of the legislation.

For further information please contact Adam Gamwell at 613-940-2736, Carolyn Dunlop at 613-940-2760 or Porter Heffernan at 613-940-2764.