Behind the Fortress Walls: CRTC’s First Substantial CASL Decision

This week, the Canadian Radio-television and Telecommunications Commission (“CRTC”) released its first substantial decision on Canada’s Anti-Spam legislation (“CASL”). The decision, CRTC 2016-428, significantly reduced the administrative monetary penalty (“AMP”) payable by Blackstone Learning Corp, and shed some light on the CRTC’s interpretation of CASL violations.

After completing its investigation, the CRTC determined that Blackstone, an e-learning provider, had engaged in nine messaging campaigns between July 9, 2014 and September 18, 2014. The nine campaigns sent over 385,000 commercial electronic messages (CEMs), many to individuals employed within governmental organizations, without the express consent of the recipients.

Blackstone accepted that it failed to obtain express consent to send CEMs to the individuals. It argued, however, that it had implied consent under the conspicuous publication exemption (s. 10(9)(b)). This provision provides implied consent if the person to whom the message is sent has conspicuously published the electronic address to which the CEM is sent without including a statement that they do not wish to receive unsolicited CEMs at such address and the CEM is relevant to their business, role, functions or duties in a business or official capacity.

The CRTC held this exemption does not provide “a broad licence to contact any electronic address [organizations] find online; rather, it “provides for circumstances in which consent can be implied by such publication, to be evaluated on a case-by-case basis.” The CRTC rejected Blackstone’s general statements that it complied with CASL by virtue of implied consent, and concluded that Blackstone had failed to provide supporting information to demonstrate that it had in fact obtained implied consent. Therefore, on a balance of probabilities, Blackstone was found to have violated CASL’s consent requirements.

Interestingly, instead of finding that each CEM was a separate CASL violation, the CRTC concluded that each of Blackstone’s nine messaging campaigns violated CASL’s consent requirements. Although this conclusion is only mentioned in passing (at para 32), it may mean that, in the cases of online messaging campaigns, the CRTC will not view each CEM sent without consent as a separate contravention of CASL’s consent and form requirements, and therefore, a separate violation in which there is a possibility to impose a maximum penalty of $1,000,000 pursuant to section 20.

Perhaps even more importantly, the CRTC’s treatment of the nine messaging campaigns as the CASL violations, instead of the 385,668 CEMs amounting to that many violations, suggests that the private cause of action, which is set to come into force July 1, 2017, may not cause much “serious trouble” or be a matter for class action litigator to drool over. Nine CASL contraventions would likely result in substantially less liability in the case of a private action than hundreds of thousands. However, the CRTC’s interpretation is not binding in an action commenced in Federal Court or a superior court, and CASL’s private cause of action could still result in a substantial damages award.

For the nine CASL contraventions by Blackstone, the CRTC reduced the AMP payable from $640,000 to $50,000. The Commission reviewed the factors set out in subsection 20(3), as well as additional relevant factors which were identified during the investigation. Even considering the fact Blackstone did not cooperate with the CRTC’s investigation, the AMP was lowered by ~92% given, among other considerations, the relatively short duration of CASL violations and Blackstone’s ability to pay. It appears, therefore, that the CRTC is willing to be lenient in reducing AMPs even when organizations are offside CASL, have sought leave to appeal of a CRTC notice of violation directly to the Supreme Court of Canada instead of the Federal Court of Appeal, and are less than compliant with CRTC orders and investigations.

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Author: Adam Jacobs

Adam Jacobs is a partner at Hayes eLaw LLP. His practice is focused on intellectual property, privacy, media and technology law.

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