On May 17, 2005, the National Task Force on Spam, which included stakeholders from the across the spectrum including the Canadian Marketing Association, ITAC, Bell, CAIP, and consumer groups, presented its final report to then-Industry Minister David Emerson. The unanimous report included the following recommendation:
There should be an appropriate private right of action available to persons, both individuals and corporations. There should be meaningful statutory damages available to persons who bring civil action.
The inclusion of a private right of action was no small matter. I was a member of the Task Force and recall discussion of lawsuits launched in the United States by large ISPs and Internet companies such as Microsoft and Amazon that had proven effective. It took nine years for the task force recommendations to become law when all parties – Conservative, Liberal, NDP and Bloc – supported the resulting legislation. The private right of action provision was to have taken an additional three years as the Conservative government chose to delay its implementation until July 2017 to give businesses three years to ensure compliance with Canada’s anti-spam law.
Yesterday, Innovation, Science and Economic Development Minister Navdeep Bains indefinitely suspended the private right of action before it could take effect. In doing so, Bains blocked important consumer redress for harmful spam and spyware that would have supplemented enforcement efforts overwhelmed by spam complaints. Bains indicated that the statutorily-mandated review of the law, which is required after three years, will be used to assess the law and the private right of action (the Canadian Federation of Independent Business holds out hope that it will be struck down permanently).
The decision to block the private right of action represents an enormous victory for business lobby groups, notably the Canadian Chamber of Commerce and the Canadian Marketing Association, who have been relentless in lobbying against the legislation. Indeed, the Canadian Marketing Association used its release to note that it spearheaded efforts to fight against the provision leading to “numerous meetings with officials and the Minister’s office.”
In fact, the fight against the law is nothing new. The long delays in the law taking initial effect – it passed in 2010 but did not take effect until 2014 – can be attributed to lobbying efforts to water it down with exceptions or kill it altogether. The law is cast as a complex, burdensome piece of legislation, yet the basic requirement is simple: informed consent. The lengthy delays between the 2005 task force report and the 2014 implementation meant that many businesses had accumulated email lists without obtaining informed consent. The prospect of having to formally ask for consent was viewed as a business threat, leading to ominous warnings about the end of commercial email and fantastical claims about the impact of the law.
Those warnings continue to this day and clearly had an impact on Bains. Consider the department’s release and his tweet using similar language: “Canadian businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation.” This is remarkable as the Minister is now seemingly suggesting that enforcement of a law passed by all parties in Parliament constitutes “red tape.” There are arguments that CASL creates compliance costs for business, but there are no reasonable claims that the private right of action constitutes “red tape” as it is simply a mechanism to encourage compliance and to allow for redress for consumers harmed by spam and spyware. Further, the inclusion of “charities” is absurd given that the CASL regulations include an exception for a commercial message “that is sent by or on behalf of a registered charity as defined in subsection 248(1) of the Income Tax Act and the message has as its primary purpose raising funds for the charity.”
The steady stream of false or exaggerated claims about the scope of the law appear to have had the desired impact as the precis for the Order-in-Council states that the delay is needed “in order to promote legal certainty for numerous stakeholders claiming to experience difficulties in interpreting several provisions of the Act while being exposed to litigation risk.” This too is remarkable. The law has been in effect for three years with multiple enforcement actions and guidance documents. Businesses are still subject to millions in liability if they violate CASL. The prospect of enforcement exists with or without the private right of action and delay does nothing to promote legal certainty.
If there is any uncertainty, it comes from the same lobby groups promoting inaccurate claims about the law. For example, the Canadian Chamber of Commerce’s release on the delay states “the law goes far beyond what most would consider to be spam and includes business to business messages.” Yet among the myriad of exceptions in the law, is Section 5(b) that states that requirements do not apply to a commercial electronic message “that is sent to a person who is engaged in a commercial activity and consists solely of an inquiry or application related to that activity.” In other words, the law features an exception for legitimate business-to-business messages.
The Chamber also states that “businesses rely on their capacity to communicate with their clients, and some of these measures would have limited their capacity to do this.” How does an enforcement mechanism limit the ability for businesses to communicate with their clients (particularly when CASL’s requirements remain in force)? The answer is that there is nothing specific about the private right of action that would have limited the capacity of business to communicate with their clients.
Further, the Canadian Marketing Association claims that the private right of action would have created a competitive disadvantage for Canadian businesses, yet the reality is that private anti-spam lawsuits have been launched by large Internet providers for years in the United States with multi-million dollar judgments used to shut down known spamming operations. Canada was playing catch-up to the many jurisdictions that already have a private right of action.
The Direct Marketing Association of Canada comes closest to admitting the reality, when it states that the private right of action delay means very little to organizations emailing Canadians. It notes that major brands would have been initial lawsuit targets but that “everyone else would have felt little impact from the Private Right of Action other than the increased awareness it may have brought to CASL and our Government’s efforts to reduce the spam in our inboxes.” While lawsuits against major brands was not guaranteed, the average Canadian business had little reason to expect a rash of lawsuits and the new right could have brought about greater awareness and compliance.
By caving to lobbying pressure and soundbites do not stand up to even mild scrutiny, Bains has eliminated the ability for consumers to help combat online harms through lawsuits seeking compensation for ransomware payments or other consumer losses. Far from striking a balance, the move will encourage further lobbying and claims of uncertainty as groups hope to parlay the delay into an all-out effort to eviscerate or eliminate the anti-spam law altogether.