U.S. companies may still be unprepared for Canada’s anti-spam act

The soon-to-be-implemented restrictions may severely affect U.S. marketers’ efforts in Canada

The way companies handle digital communications will soon change north of the border.

Canada’s anti-spam legislation, Bill C-28, which passed Dec. 15, 2010, is expected to be proclaimed in force in late fall 2012 or early 2013. However, while most Canadian companies are aware of the impending changes, a new report from Canadian law firm Fasken Martineau finds that U.S. companies and their general counsel are still largely ignorant of the legislation and its effects.

The anti-spam act, which “seeks to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities,” will amend four other national regulations: the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act.

As a result, the law may have a significant impact on U.S. marketers doing business in Canada. Once proclaimed in force, for companies to send commercial emails to, through or from Canada, they will need to get the recipient’s permission prior to sending the email. This stands in direct contrast to the U.S.’s CAN-SPAM Act, which requires an opt-out policy rather than an opt-in policy.

Companies not in compliance with the new regulation may receive serious penalties, including up to a $10 million fine for sending an unsolicited email, or face class action lawsuits and millions of dollars in damages.

Fasken’s survey, which polled marketing executives, general counsel and other high-level decision makers at publicly traded or highly regulated companies in a variety of industries, found that nearly 60 percent of respondents were unaware of the new law. And of those respondents who were aware of the legislations, 23.6 percent did not know about the potential penalties.

Additionally, Fasken found that only 27 percent of respondents knew that a company that is compliant with the U.S. Do Not Call legislation is not automatically compliant with Canada’s anti-spam act. And this could be a significant problem for U.S. companies’ legal departments.

“General counsel will definitely be impacted by the upcoming anti-spam law,” Fasken Martineau attorney Charles Lupien said. “The first and most important thing to do is to educate.”

Lupien recommends that general counsel meet as soon as possible with the marketing and IT departments to inform them of the upcoming law and assess the changes it will have on business practices.

“More specifically,” he continues, “a review of the company’s current email list will need to be made in collaboration with the marketing department to make sure the company can secure prior consent or the application of an exception for each entry. If not possible, the company should consider either obtaining consent or purging the entry to avoid potential fines and class actions.”

To see the full survey results, view Fasken’s website.

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