When thousands of Canadians celebrate Canada Day with picnics and barbecues this year, there’s one dish they’ll be consuming a lot less on our national holiday: spam.
The amount of digital spam originating from Canada has dropped by 37 per cent since Bill C-28 came into effect one year ago, according to research by Cyberimpact. That suggests the law is working when it comes to cutting down on the amount of unwanted or unsolicited emails Canadian organizations are sending to Canadian consumers.
“Canada was the fourth biggest spammer in the world which is why we needed something to support businesses and consumers, obviously,” said Patrick Tremblay, director of sales and customer service at Cyberimpact, an email marketing firm based just outside Montreal.
For Canadian businesses, however, the law may not be having as positive an impact. Cyberimpact’s study shows that since CASL took effect on July 1, 2014, 29 per cent fewer emails have been sent overall, 10 per cent of surveyed businesses have stopped sending commercial email entirely and 39 per cent say CASL has “hampered their promotional efforts.”
“It slowed down some businesses to where some basically went to a halt in email marketing,” said Tremblay. “When we asked why, they said well, the law wasn’t on their side.”
The Canadian Chamber of Commerce hasn’t formally surveyed its members about CASL’s impact on their operations. Yet the anecdotal feedback has been overwhelmingly clear, said Scott Smith, director of intellectual property and innovation policy at the chamber.
“The ability of businesses to communicate with their customers has been severely hampered by the legislation,” Smith said. “A lot of smaller (chamber) members have simply stopped doing email marketing altogether and shifted to telemarketing but it’s less effective and way more expensive.”
In addition, 48 per cent of respondents in the Cyberimpact study said CASL has “impeded their ability to compete with their U.S. counterparts.” That’s because CASL requires consumers to opt in to receiving emails while U.S. law only requires companies to offer an opt out option. Also, various legal experts have said Canadian authorities might have difficulty enforcing CASL against companies in foreign jurisdictions.
Bill C-28 violations carry penalty fines of up to $10 million. In March, the online dating site Plenty of Fish was fined $48,000 after complaints to the Canadian Radio-television and Telecommunications Commission (CRTC) that it was sending commercial emails without a clear unsubscribe mechanism.
Earlier in March, the CRTC slapped a $1.1-million fine on Quebec firm Compu-Finder. The CRTC alleged in a statement that Compu-Finder “flagrantly violated the basic principles of the law by continuing to send unsolicited commercial electronic messages after the law came into force.”
Smith said that besides the fear of such fines, confusion about how the law actually works is also causing businesses to curb their email marketing efforts.
“The question of whether they have a business-to-business exemption, a personal exemption or a previous transaction exemption in some cases is extremely difficult to track … The definition of spam is far too broad. Not all commercial messages are spam and that’s a major failing of the law,” he said.
A lack of clarity makes C-28 so far-reaching that “it chills commercial free speech,” said Barry Sookman, senior partner in the technology law group at McCarthy Tetrault and a professor of intellectual property law at Osgoode Hall law school in Toronto.
Sookman predicts C-28 will eventually face a constitutional court challenge on the basis that “Canadians, including Canadian businesses, have a right to freedom of expression under the Charter (of Rights and Freedoms) and that right can only be abridged where there’s a pressing reason for it. Any impediments to free speech have to be reasonably justified and be proportionate.”
In contrast to Cyberimpact’s figures, recent research by Constant Contact showed 70 per cent of Canadian businesses have made no change to their email strategy since CASL became law. In that study, only 13 per cent have decreased their email marketing efforts in the year since C-28 was passed and just two per cent have halted their email promotions completely.
In May, data from Cloudmark matched Cyberimpact numbers implying that all email received by Canadians decreased by 29 per cent during the past year. But additional Cloudmark research indicated the average percentage of spam email received by Canadians actually increased very marginally from 16.5 per cent to 16.6 per cent.
Perhaps more consistent data gathering methods will be developed to track the impact of CASL by 2017, when a review of the law is slated to be carried out for its three-year anniversary.