The legal framework of email marketing

Email communication proves to be an ideal tool for anyone wishing to reach a broad audience. However, as it allows the initiator to transmit a lot of information about their company while enjoying a certain anonymity, there is a risk of some dishonesty.

To limit the chances of such situations occurring, legal mechanisms have been established. Here is everything you need to know about the legal framework for email marketing by the Competition Act and the Canadian Anti-Spam Law.

The Competition Act to counter misleading information conveyed by email marketing

The Competition Act is the first legal protection mechanism put in place to regulate the practice of email marketing. It primarily targets any false or misleading indication knowingly given without consideration for the consequences of such information on the consumers who consult it. This practice, better known as "mass marketing fraud," is therefore punishable under the current law.

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Violation of the Competition Act: how to prove it?

As mentioned in the previous paragraph, any false or misleading information is targeted legally. From this observation, it is nevertheless necessary to answer the following question: how is it possible to prove it?

In fact, section 52 of the act and paragraph 74.01(1) a) state unequivocally that it is not necessary to demonstrate that an individual has been deceived or misled or even that this person was residing in Canada at the time they became aware of the facts targeted in the complaint. The recognition of the misleading nature of the information is mainly based on the analysis of its literal meaning, as well as the overall impression it creates.

Although referring to the overall impression may seem confusing at first glance, it actually conveys very precise indications under the Competition Act. This reference implies that a fault is committed if:

the transmitted information is verifiable in the literal sense, but it is inaccurate because it is incomplete;
when a part of the information is true, but some elements are false;
when the information is vague and can be understood in more than one way, one of which is false;
when technical information provided is true, but it is integrated into an explanation to which it is not related. One element seems to support the other, but this is not actually the case;
when a visual aid gives a false impression about the features of a product.

What are the consequences of violating section 52 or paragraph 74.01(1) a)?

Before answering this question, it is necessary to specify that the penalties incurred by a breach of either of these two legal measures are different because the first is a criminal provision, while the other is a civil provision.

The legal consequences of violating section 52 are as follows:

a maximum fine of $200,000 and a maximum imprisonment of one year or one of these two penalties (following a summary conviction);
a fine at the discretion of the courts and a maximum imprisonment of fourteen years or one of its penalties (following a conviction by indictment).

For having violated paragraph 74.01(1) a), the consequences will be as follows:

you may receive a corrective notice, pay an administrative penalty or a compensatory sum to buyers (if the fault concerns the sale of a product). Note that when this latter possibility applies in the case of a first offense, individuals may be ordered to disburse up to $750,000, while legal entities may have to pay up to $10,000,000.

In the case of a second offense, the payment of a sum as compensation can reach up to $1,000,000 for individuals and up to $15,000,000 for legal entities. It should be noted that non-payment can lead to the freezing of the assets of the offending person.

The Canadian Anti-Spam Law to regulate email marketing

The Canadian Anti-Spam Law specifically aims to limit the sending of commercial emails to consumers out of a desire to respect their privacy more. If previously spam was considered a mere nuisance, it now takes on a whole new meaning under this new legislation launched on July 1, 2014.

Thus, for the sending of a commercial email to be recognized as legal, it is necessary

for any organization to:

receive either implicit or explicit consent from the recipient for sending the email;
include in the sent message a clearly identifiable clause allowing for unsubscribing;
never install a program on the recipient's computer without their explicit consent.

Regarding consent, it should be noted that it is recognized as being obtained as soon as an individual becomes your client and gives you their email address. This means that you obtain their consent implicitly, which is just as valid as an explicit agreement. This agreement is valid for a period of two years. After the end of this period, obtaining explicit consent will be necessary, otherwise the provisions of the Canadian Anti-Spam Law are not respected.

In the case where an individual completes a form on your website, it is good to know that this does not mean that you have obtained their consent. Indeed, forms must expressly contain a section where the recipient can clearly indicate their choice to receive or not receive promotional emails from your company.

What are the consequences of violating the Canadian Anti-Spam Law?

For an individual who violates the Canadian Anti-Spam Law, a fine of up to $1,000,000 can be imposed, this fine risking climbing up to $10,000,000 for an organization. Following this last point, it is essential to specify that an organization can be held responsible for the actions of one of its employees. On an individual basis, a person is even entitled to sue you and obtain up to $1,000,000 per day of violation.

Some useful tips to follow regarding email marketing

To avoid getting yourself into a legally compromising situation, several recommendations deserve careful attention. If you wish to send a promotional email to someone you met at a business meeting, you will also need to receive at least verbal approval from this individual, despite the fact that they are not a stranger.

Secondly, it is important that all members of your company receive training regarding the procedures to follow to obtain consent from your potential clients. These practices must then be institutionalized and become the norm in your company.

Lastly, to avoid being the victim of a fraudulent lawsuit, keep proof of obtaining consents in an Excel file by keeping the person's name, the date of consent was received, and the manner in which it was obtained.

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Karine Dutemple

Blogger at helloDarwin

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