sookman casl and universities

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Sookman presentation on the effect of Canada's anti-spam law on universities


  • McCarthy Ttrault LLP / Canadas Anti-spam Law (CASL) and Universities Barry B. Sookman Direct Line: (416) 601-7949 E-Mail: September 27, 2013
  • McCarthy Ttrault LLP / CASL Purpose The purpose of CASL is to promote the efficiency and adaptability of the Canadian economy by regulating commercial conduct that discourages the use of electronic means to carry out commercial activities, because that conduct a) impairs the availability, reliability, efficiency and optimal use of electronic means to carry out commercial activities; b) imposes additional costs on businesses and consumers; c) compromises privacy and the security of confidential information; and d) undermines the confidence of Canadians in the use of electronic means of communication to carry out their commercial activities in Canada and abroad. (s. 3) 2
  • McCarthy Ttrault LLP / Scope of CASL Anti-SPAM Anti-spyware/malware Amendments to PIPEDA prohibiting address harvesting and personal information harvesting Amendments to the Competition Act prohibiting false or misleading representations in electronic messages, sender information in electronic messages, subject matter information in electronic messages, locaters 3
  • McCarthy Ttrault LLP / CASL History Received royal assent on December 15, 2010. Original draft regulations were published in the summer of 2011 by the CRTC and Industry Canada. The Canadian business community raised serious objections to their strict requirements. The CRTC enacted revised regulations which were finalized on March 28, 2012. Revised draft regulations from Industry Canada on January 5, 2013. They were open for comment until February 4, 2013. CASL in force date? 4
  • McCarthy Ttrault LLP / Do Universities need to be concerned about the anti- spam provisions in CASL? 5
  • McCarthy Ttrault LLP / CASL and Universities CASL does not exempt universities, charities, or non-profit organizations and will apply to many university activities that use electronic messages, including emails, newsletters, bulletins, advertisements, notices, social media. Areas for consideration include: Admissions and Recruitment: advertising, promotions, and communications with prospective students Administration: communications with current students, goods and service providers, university merchants, stakeholders Services to students e.g. housing, sports, booksore Fundraising: dealing with alumni, student groups, associations, foundations, marketing of co-branded products 6
  • McCarthy Ttrault LLP / Very High Liability Administrative monetary penalties (AMPS) with caps up $10 million for a university. (s.20(4)) Private rights of action by anyone affected by a prohibited act (s.47(1)) with liability that consists of: compensation for loss, damages and expenses; and extensive awards that are capped at: $1 million per day for breach of SPAM, malware, spyware, message routing, address and personal information harvesting, and Competition Act provisions; $1 million for each act of aiding, inducing, or procuring a breach of the SPAM, malware and spyware, and message routing provisions, plus liability up to $1 million per day for breach of SPAM, malware, spyware, and message routing provisions. Risk of class actions. 7
  • McCarthy Ttrault LLP / Extensive Accessorial and Vicarious Liability Liability extends to any person who aids, induces or procures a prohibited act. (s.9) Senders of CEMs are liable for acts of their employees within the scope of their authority. (s.32, s.53) Liability extends to officers, directors, and agents if they directed, authorized, assented to, acquiesced, or participated in the prohibited act. (s.31, s.52) Risk implications for universities e.g., too easy to pierce corporate veil; requirements for insurance? Does the risk make sense for universities, charities and not for profit enterprises (or any other entity)? 8
  • McCarthy Ttrault LLP / AUCC submission to Industry Canada: Canadian universities are concernedthat the law's blanket prohibition against sending commercial electronic messages without express or implied consent of the recipient may capture and inhibit electronic communications by universities which are part of their core educational activities. These activities are not the intended target of the legislation, and could potentially result in new administrative burdens, financial penalties, and damage to institutional reputations. What does AUCC think about CASL? 9
  • McCarthy Ttrault LLP / AUCC submission to Industry Canada The significant penalties that may apply to individuals and organizations that do not comply with the terms of the Act up to $1 million for an individual and up to $10 million for an organization for each violation of the Act are also of great concern. These concerns are magnified by the possibility of vicarious liability for the officers and directors of an organization for a violation of the Act, as well as the new private right of action for individuals who receive commercial electronic messages without their consent, which could lead to a class action lawsuit by individuals receiving unsolicited "commercial electronic messages. What does AUCC think about CASL? 10
  • McCarthy Ttrault LLP / AUCC submission to Industry Canada: AUCC recommends that Industry Canada amend the draft Electronic Commerce Protection Regulations to exempt registered charities, including universities, from the requirement to have the express or implied consent of recipients prior to the sending of "commercial electronic messages." What does AUCC think about CASL? 11
  • McCarthy Ttrault LLP / Imagine Canada submission to Industry Canada: Legislation and regulations aimed at controlling spam in Canada should not be so overly broad in scope that they impede and make more costly the electronic communications of registered charities, including universities, for purposes such as fundraising. The Canadian Radio-television and Telecommunications Commission's Unsolicited Telecommunications Rules that are intended to control a related problem telemarketing reflect this principle by exempting from the application of the National Do Not Call List Rules any unsolicited telecommunications made by or on behalf of a registered charity. What do charities think about CASL? 12
  • McCarthy Ttrault LLP / Imagine Canada submission to Industry Canada 1.The definition of commercial electronic message is sufficiently broad that it will restrict the ability of many charities and public-benefit nonprofits to carry out activities that further their missions to serve Canadians and communities. 2.The draft regulations, as presented, would place undue financial and administrative burdens on charities and public-benefit nonprofits. 3.The draft regulations do not reflect or accommodate the ways in which charities and public benefit nonprofits communicate with each other, with key stakeholders, or with the general public. 4.The draft regulations are inconsistent with other domestic policies and with the federal governments stated objectives regarding philanthropy and the facilitation of earned income by charities and public-benefit nonprofits. 5.The draft regulations are inconsistent with policy developments internationally. What do charities think about CASL? 13
  • McCarthy Ttrault LLP / Ontario Nonprofit Network submission to Industry Canada: Small and mid-size charitable and nonprofit organizations cannot comply with CASL and its regulations and undertake their day-to- day work. There is a fundamental conflict that will either impede their work in communities or, as noncompliant, leave them vulnerable to potentially prohibitive fines and private actions. The legislation and regulation will place undue financial and administrative burden on those nonprofit organizations which attempt to comply. The prohibitive costs and risks associated with requiring that charities and nonprofit organizations manage and maintain express and implied consent records across their complex databases and ever-changing community connections and relationships is not justified given their negligible participation in the generation of spam. What do not-for profits think about CASL? 14
  • McCarthy Ttrault LLP / Coalition of Business and Technology Associations submission to Industry Canada: We have now been working with CASL for over two years and have a better appreciation of the compliance challenges and the potential for unintended consequences resulting from CASL s regulatory approach much more than we did when CASL was passed by Parliament. The inclusion in CASL of both open ended prohibitions and prescriptive requirements makes it very difficult to anticipate all of the impacts that CASL will have. We are now more concerned than ever that CASL will actually result in more harm than benefit to the Canadian economy an