Canada's Anti-Spam Law Takes Effect

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Marketers can blame Canada for new email woes, but it might just leave them with cleaner lists. Companies with no physical presence there may have less to worry about.

Canada's Anti-Spam Law Takes Effect
It's Canada Day, but emailers aren't celebrating.

Opt-in is in above the 49th parallel as of Tuesday. Let all commercial emailers take heed, for while a significant grace period is in place for companies to adjust to the rigorous new standards set down by the Canadian Anti-Spam Law (CASL), the costs can be severe for those who fail to comply. Speculation is that individual violations can warrant fines of up to $10 million from the Canadian government and, in three years from now, individuals will be allowed to file claims against companies simply for getting emails they didn't opt in to.

The big difference between CASL and America's CAN-SPAM law is Canada's opt-in requirement. If companies send emails to someone in Canada who has not agreed to receive them, they're in violation of the law. What's more, CAN-SPAM covers emails only, while CASL encompasses all electronic messages, including social media posts and texts. The law exempts customers with whom companies have transacted business in the previous two years. Experts advise, however, that companies seek opt-ins from these people, as well.

“There are serious liability issues involved here and, in my opinion, companies need to act on complying with this law immediately. The Canadian government wants enforcement on this to be tight right away,” says Khizar Sheik, a New Jersey-based attorney who has spent the past year advising global enterprises on complying with CASL. “It includes a pretty harsh private right of action clause that takes effect in 2017. Then, any Canadian will be able to bring suit against any company in violation, and officers of the company can be held personally liable.”

That makes the issue pressing for global enterprises, but maybe not so much for U.S. e-commerce or catalog businesses that have no physical operations in Canada. Jurisdictionally, Sheik says, Canadian plaintiffs would tie any claims awarded in a suit to a company's Canadian holdings, or to a tax identity that might have been established for business done in the country. However, Mike Comstock, principal of Ursa Major Associates and former SVP of e-commerce for global shipping company DHL, imagines that there would be little paper outstanding to tie a domestic e-commerce company to a judgment. “It would be the customer or the importer who would be on record,” Comstock says. “There's no tax registration required of the shipper, though Canada could track who the shipper was through the air bill.”

More immediately vexing to marketers is what CASL will do to their Canadian lists. Bob Sybydlo, the Canada-based director of market intelligence and deliverability for Yesmail Interactive, says he's seen opt-in rates of only 10% to 30% among clients that initiated email appeals to customers months ago. The ones that came in on the higher end of that scale tried harder. “A lot of major Canadian businesses have been proactive. A lot of them have been incentivizing customers to opt in,” Sybydlo says. “Large restaurant chains, for example, were offering free appetizers to people who opted in.”

On the plus side, compliance with CASL could lead to smaller but more effective lists. “As you go through your database and attempt to reactivate customers you may see some old addresses coming to life, says Sybydlo, who offers three tips to companies that have delayed addressing CASL:

1. Identify who in your database is Canadian, and don't assume that simply eliminating all the .ca addresses will get it done.

2. Look at when customers engaged and how often and identify the valuable customers you need to reconfirm right away.

3. Understand what you want to accomplish and put a plan into action. You may want to create a new engagement campaign.

Today is Canada Day, the nation's equivalent of Independence Day. Government offices are closed. That gives marketers a one-day head start on the regulators.

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