During these unprecedented times, most businesses are faced with tough decisions as to whether to temporarily stop operations, e.g., because a state of emergency has been declared and they do not qualify as essential, switch to different business models or, if they remain open, implement new procedures to keep employees and the general public safe. Staying connected with one's customers and suppliers has now become even more important and most businesses have been providing frequent e-mail and text message updates regarding the state of their operations.
Despite the COVID-19 pandemic, Canada's anti-spam legislation (CASL) continues to apply. CASL prohibits the sending of commercial electronic messages without meeting detailed consent, form/disclosure and unsubscribe requirements, and imposes fines for non-compliance that are among the highest in the world. Below we provide answers to a few key questions to help businesses stay CASL-compliant.
CASL applies to any commercial electronic message (CEM) that is sent to an electronic address, so emails, SMS and other messaging to mobile phones and devices are generally caught. A CEM is defined very broadly. Any message that at least in part encourages participation in a commercial activity would qualify as a CEM, so in addition to the message's content, features like hyperlinks and contact information would be taken into account to determine whether a message is a CEM. In practice, most messages sent by businesses to their current or past customers, and in some cases their suppliers, would likely qualify as a CEM.
If a message is a CEM, it may not be sent unless the sender has either obtained express consent from each recipient, can establish one of the permitted bases for implied consent or the message falls under an exemption either from CASL generally or the consent requirements specifically. A business likely obtained permitted consent if at one point an individual subscribed to receive promotional communications from the business and never unsubscribed, i.e., express consent, or the recipient has not expressly subscribed to receive marketing communications, but made a purchase from the business or inquired about the business' products within a prescribed period of time, i.e., implied consent. Unless a message is entirely exempt from CASL, it must contain the prescribed identification information of the sender and a valid unsubscribe mechanism ("form requirements").
If the above criteria are not met, a CEM may not be sent. The Canadian Radio-television and Telecommunications Commission has a strong record of CASL enforcement including multiple public enforcement actions and investigations since CASL took effect. Violations may result in administrative monetary penalties up to a maximum of CAD 1 million for individuals and CAD 10 million for corporations, per violation.
Below are examples of a few types of communications that have become more common during the COVID-19 crisis and how they are likely to be treated under CASL.
A number of businesses have moved or are moving towards online services, e.g., health/fitness, education/training, financial services, telemedicine and virtual tourism, or take-out, delivery or curbside pickup systems, e.g., restaurants and hardware, electronics, domestic merchandise and clothing stores, and have been updating their customers of these changes as the COVID-19 pandemic evolves. These types of messages would generally be considered CEMs because they can be viewed as encouraging a commercial activity, e.g., use of online or delivery services instead of in-store services, and would need to comply with both the consent and form requirements of CASL.
Where a business has been ordered to close as non-essential and cannot offer any products or services, an email solely informing customers of the closure would likely not qualify as a CEM as it arguably does not encourage participation in a commercial activity. A message simply informing customers of its temporary closure would arguably not be subject to CASL.
That said, if a message encourages future economic activity in any way, for example by including a sentence that references future product offerings or even just says "we hope to see you after we're back", it could be viewed as a CEM. Although there may be arguments that this type of message should be exempt from CASL, a cautious approach would be to ensure this type of message complies with both the consent and form requirements.
If a business continues to operate and is informing customers about new enhanced safety protocols, with a view to reassuring customers and encouraging them to patronize the business, the message would likely be considered a CEM and subject to CASL consent and form requirements.
Generally, business-to-business communications between organizations that already have a relationship are exempt from CASL, provided they concern the business of the recipient organization. Any operations-related messaging to the business' suppliers would likely be exempt from CASL entirely, i.e., a message does not need to comply with either consent or form requirements.
Any messages informing customers about resuming operations or aimed at advertising any products or services post-COVID-19 would likely be considered CEMs and subject to CASL consent and form requirements.
Practically speaking, although businesses may be tempted to believe the risk of enforcement is reduced due to COVID-19, particularly for messages that provide factual information about the state of a business' operations, businesses should continue to take their CASL obligations very seriously. CASL has not been suspended and businesses not complying with either the consent or form requirements under CASL could face complaints, and significant fines, after the crisis is over. Furthermore, businesses should think ahead to the post-COVID-19 world and ensure that all communications they plan to send as they prepare for the 'new normal' are CASL-compliant.
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