Last year, a Quebec court upheld the largest spam damage award in the world, ordering Adam Guerbuez, a Montreal-based email marketer, to pay Facebook $873 million dollars for sending millions of spam messages to users of the popular social network. Two months later, the Conservative government passed long overdue anti-spam legislation that finally established strict rules for electronic marketing and safeguards against the installation of unwanted software programs on personal computers, all backed by tough multi-million dollar penalties.
Then-Industry Minister Tony Clement promised that the law would “protect Canadian businesses and consumers from harmful and misleading online threats,” but nearly a year later, the law is in limbo, the victim of an intense behind-the-scenes lobbying campaign that threatens to water-down the legislation such that Guerbuez, who maintains an active online presence, has publicly thanked the lobby groups for helping to keep him in business.
The spring election delayed the introduction of draft regulations for the anti-spam legislation, but since they were posted in early summer, lobby groups have used the process as an invitation to re-open the legislation and delay any implementation for months or even years.
While the government has remained mum on its plans, public comments from groups like the Canadian Marketing Association indicate that new regulations are on the way with backroom consultations with lobby groups that will create significant delays. Moreover, it appears that Industry Minister Christian Paradis has caved to the lobby pressure and is prepared to inject massive loopholes into what was touted as one of the world’s toughest anti-spam laws.
The law sets reasonable limits for online marketing consistent with rules found in many other countries. It includes important “opt-in” consent requirements, but also features numerous exceptions including a business-to-business exception so that businesses that send commercial email to other businesses are immediately exempt from the need to obtain consent. In fact, all commercial messaging to consumers is permitted – there are no limits – so long as the business has obtained prior consent.
Despite the balanced approach, lobby groups are determined to undo many basic protections. For example, the law includes an exception for commercial messages where there is a “personal relationship.” Industry Canada proposed a regulation that defined a personal relationship as one involving an in-person meeting and a two-way communication at least once over the prior two years.
Lobby groups such as the Interactive Advertising Bureau Canada have called on the government to drop these conditions, arguing no in-person meeting and no time limit is needed. In other words, according to the IAB, a 10 year old email exchange should qualify as a personal relationship and exempt the marketer from obtaining user consent and complying with the anti-spam rules.
The lobby groups have also targeted the tougher consent requirements, noting that they may exceed those required under current private sector privacy law. The tougher standards are a feature, not a bug, as MPs were well aware that the anti-spam law was increasing privacy protections. Yet now lobby groups want to use the regulatory process to “grandfather” any earlier consent – even those that may have only been implied. As a result, millions of Canadians will find that organizations claim consent to continue marketing to them.
Groups such as the Canadian Real Estate Association also have their sights set on dismantling protections against unwanted “referral” emails. While the law currently permits referral emails with appropriate consents, new regulations may establish broad exceptions that imply consent for many referral emails.
The campaign to undermine the law is not limited to spam. The law also contains mandatory disclosure requirements when Canadians install new software programs on their personal computers. This issue was hotly debated at committee and the compromise legislation designed to protect individual privacy and security, while enabling common installations (such as security updates) to proceed unimpeded.
Lobby groups are similarly using the regulatory process to re-open the legislative compromise. For example, the Information Technology Association of Canada, which represents software and technology companies, argues that software vendors should be permitted to install programs without disclosure provided they notify the user of possible installations within the licence agreement. Given the common practice of burying such terms in long agreements that few consumers ever read, few will be aware that they have consented to the secret installation of programs designed to monitor their use of the software.
None of this would pose a significant concern if Paradis was prepared to tell the lobby groups that re-opening the spam law is not option. But with secret meetings and leaked information, it is increasingly apparent that the protections promised to Canadians may soon dissolve, ensuring that the likes of Adam Guerbuez will continue to ridicule Canada’s effort to stop unwanted spam and calling into question the government’s promise to protect Canadian consumers and businesses.
Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at firstname.lastname@example.org or online at www.michaelgeist.ca.