Federal Court Of Appeal Recognizes Constitutionality Of CASL

• Published date: 26 June 2020
• Subject Matter: Media, Telecoms, IT, Entertainment, Privacy, Mobile & Cable Communications, Privacy Protection, Broadcasting: Film, TV & Radio
• Law Firm: EKB | Edwards, Kenny & Bray LLP
• Author: Mr Simon Pinsky and Kelly Samuels

On June 5, 2020, the Federal Court of Appeal ("FCA") released its decision in 3510395 Canada Inc. v Canada (Attorney General), 2020 FCA 103.

The decision considered the appeals of 3510395 Canada Inc. (doing business as "CompuFinder") to two findings of the Canadian Radio-Television and Telecommunications Commission ("CRTC"). The decision is significant for two main reasons.

First, it recognizes the constitutionality of the scheme in Canada's Anti-Spam Law ("CASL")¹ which regulates the sending of unsolicited commercial electronic messages ("CEMs").² Second, it provides guidance on several key aspects of CASL's CEM provisions, including: (i) the scope of the "relationship" requirement in CASL's business-to-business exemption; (ii) the effect of including a non-functioning unsubscribe mechanism in a CEM, even if the CEM also includes a functioning unsubscribe mechanism; and (iii) the scope of CASL's provisions relating to implied consent to receive CEMs. Organizations which utilize CEMs to promote business activities would be wise to pay close attention to the impacts of the decision.

Constitutionality

The FCA found that CASL's CEM scheme is a valid exercise of the federal government's constitutional jurisdiction over general trade and commerce. Moreover, although the scheme infringes upon freedom of expression, such infringement is justified in part by CASL's demonstrable benefits, including: (i) the reduction of spam; (ii) an increase in legitimate CEMs reaching recipients and being opened; and (iii) increased email marketing performance of Canadian companies.

Business-to-Business Exemption

The decision provides guidance on the scope of the "relationship" requirement in CASL's business-to-business exemption. Section 6 of CASL establishes several requirements for sending CEMs, including the requirement to obtain consent from recipients prior to sending a CEM. The business-to-business exemption provides that s. 6 of CASL does not apply to CEMs sent between representatives of organizations where those organizations have a "relationship" and the CEM relates to the activities of the recipient organization.³ CompuFinder provided professional training courses on several topics, including team management and effective use of social media. An organization purchased one of CompuFinder's training courses for one of its employees. CompuFinder subsequently sent CEMs to a significant number of the purchasing organization's employees.

The FCA refused to interfere with...