Evaluating the Industry Canada CASL regulations: my submission to the consultation

February 5th, 2013 by Barry Sookman Leave a reply »

Yesterday, along with many organizations, I filed a personal submission to the Industry Canada consultation on the draft Electronic Commerce Protection Regulations. My cover letter addressed to Bruce Wallace of Industry Canada is set out below and is followed by a copy of the complete submission.

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I appreciate the opportunity to provide comments on the above-noted consultations.

I make these comments in my personal capacity and not on behalf of my firm or any of its clients. I write as one of the leading technology lawyers in Canada and the author of a six volume book on Computer, Internet and e-Commerce Law, the most authoritative book on these subjects in Canada. I am also an adjunct Professor of intellectual property law at Osgoode Hall Law School.

I am writing because I am deeply concerned about CASL. The draft regulations partially address some of the major inadvertent consequences with CASL. I support the use of regulations to help CASL achieve its objectives. However, while very useful, the draft regulations do not go far enough. CASL’s structure and many of its implementing provisions are problematic. Without substantial changes CASL, even with the draft regulations, will cause inordinately more harm than good.

Its negative impacts will likely affect all segments of Canadian society. For example some of the likely impacts are the following:

  • Consumers will be deprived of valuable information they want and need including many transactional and service messages such as notification messages that they will incur roaming charges or that a mortgage or other financial product is coming to term, and the consumers’ options in each case. When popular foreign based fan sites stop sending updates to Canadians about their favorite sports celebrity or artist, or about developments in a subject in which they are interested, they will be deprived of information they really want. They will find it harder to get computers, appliances or other electronic devices repaired or serviced by retailers and independent service organizations because of the new rules related to computer programs. They will also pay more for products and services and have less variety because of CASL’s effects on competition, especially from foreign countries.
  • Charities, non-profit and educational organizations, and the health sector, will have new roadblocks that make it more difficult for them to raise money or disseminate important information to their constituencies. Many members of the public will find themselves being removed from mailing lists of charities and not for profit organizations including those catering to medical diseases and health problems because these organizations no longer have consent to send them the newsletter or other information they want and need and are prevented from even seeking consent to ask if they can continue to send the publications.
  • The telecommunications sector and other organizations that operate networks will be less able to secure their computer systems and networks and consumers’ personal information and to defend themselves against cybercriminals.
  • Sole proprietorships and other small businesses will be handicapped in building new businesses.
  • Managed messaging systems and closed messaging systems like social networks and instant messaging services will be burdened by regulations that make no sense in these contexts. There will be impediments to deploying and using them in Canada. Refer a friend based services will be significantly affected.
  • The high tech industries will be placed in positions where they cannot compete with foreign competitors. Cloud computing, computer outsourcing, and software distribution, maintenance and support businesses that support foreign enterprises will be hurt.
  • Every organization will have to invest in expensive processes to comply with the new across the board requirements for express consents, disclosures, and unsubscribe formalities. It sounds easy, but it is not. Organizations will be unable to rely on consents they already have such as those obtained under Canada’s privacy legislation, PIPEDA. They will have to develop a duplicate and overlapping system for obtaining consents. The types of messages caught are potentially so wide ranging, organizations cannot reasonably know what messages they need to be concerned about. The core definition of commercial electronic message is vague and unworkable. The transitional provisions intended to ease the transition to CASL are ineffective thus forcing organizations to make substantial immediate investments or face class action law suits from the expected CASL litigation trolls under the new private right of action.
  • All segments of the public will be affected by the restrictions on the use of the Internet to deliver digital products. Digital products including ebooks, newsletters, magazines, music, videos, video games, and software that are delivered using electronic messaging systems like email or instant messaging can be considered commercial electronic messages to which CASL applies, especially if they contain a hyperlink to the vendor’s website, the vendor’s logos or some information that tells consumers how to get an upgrade, update, warranty service or similar types of products. A new layer of regulation will thus inadvertently be added to digital distribution of products.
  • Individual citizens will have to have express consent before they can send their friends (except perhaps their closest friends), neighbors, schoolmates, acquaintances, colleagues, and certain extended family members emails or other messages that have to do with buying or selling a product or service or encouraging them to engage in any act of a commercial character including trivial things like buying a baby crib, mowing a lawn, or promoting corner lemonade stands.
  • The public’s right to freedom of expression guaranteed by the Charter of Rights and Freedoms will be significantly impinged. It is hard to imagine how CASL’s impingements on the Charter rights of ordinary Canadians and organizations could be considered proportionate, reasonable, and to minimally impair the right to freedom of speech.

CASL and the current draft regulations, taken together, are completely at odds with the Government’s policies of reducing red tape, augmenting cyber security, helping small business, fostering digital commerce, and creating rewarding jobs for Canadians.

You may think the above litany of problems is overstated. However, it is CASL’s across the board prohibitions and prescriptive requirements to regulating electronic messages and computer programs, and especially messages that no one would consider to be harmful and programs that are completely innocuous, that causes these significant problems. I am not alone in raising these problems. Many organizations described these problems in commenting on the previous draft regulations. I understand that many organizations still share these views and intend to communicate these concerns in commenting on the latest draft regulations.

I am attaching a series of blog posts that set out my reasons why CASL and its implementing provisions are problematic and why the regulations fall short and do not redress the problems with CASL.

  • Evaluating the Industry Canada CASL regulations: why they are needed   http://www.barrysookman.com/2013/01/14/evaluating-the-industry-canada-casl-regulations-why-they-are-needed/
  • Evaluating the Industry Canada CASL regulations: how to assess them   http://www.barrysookman.com/2013/01/16/evaluating-the-industry-canada-casl-regulations-how-to-assess-them/
  • Evaluating the Industry Canada CASL regulations: family relationships and personal relationships   http://www.barrysookman.com/2013/01/18/evaluating-the-industry-canada-casl-regulations-family-relationships-and-personal-relationships/
  • Evaluating the Industry Canada CASL regulations: the B2B exception (Part I-SMEs)   http://www.barrysookman.com/2013/01/21/evaluating-the-industry-canada-casl-regulations-the-business-to-business-exception-part-i/
  • Evaluating the IC CASL regulations: the B2B exception (Part II-Non-business entities)   http://www.barrysookman.com/2013/01/22/evaluating-the-ic-casl-regulations-the-b2b-exception-part-ii-non-business-entities/
  • Evaluating the Industry Canada CASL regulations: jurisdictional overreach  http://www.barrysookman.com/2013/01/25/evaluating-the-industry-canada-casl-regulations-jurisdictional-overreach/
  • Evaluating the Industry Canada CASL regulations: defining commercial electronic message    http://www.barrysookman.com/2013/01/30/evaluating-the-industry-canada-casl-regulations-defining-commercial-electronic-message/
  • Evaluating the Industry Canada CASL regulations: countering cyber-security threats    http://www.barrysookman.com/2013/02/01/evaluating-the-industry-canada-casl-regulations-countering-cyber-security-threats/
  • Will CASL Hurt Charities? Let Us Count The Ways    http://www.barrysookman.com/2013/02/04/will-casl-hurt-charities-let-us-count-the-ways/
  • Rethinking CASL (Canada’s Anti-SPAM law)  http://www.barrysookman.com/2011/05/25/rethinking-fisa/
  • Electronic Commerce Protection Regulations – Much Work Remains    http://www.barrysookman.com/2011/09/20/electronic-commerce-protection-regulations-%e2%80%93-much-work-remains/

The content of those blog posts are attached to this letter for ease of reference and should be considered part of my submission.

In my view, CASL and the current regulations should be subject to independent reviews to determine whether they will do more harm than good. It may be that when CASL was passed all of the inadvertent consequences were not easily forseen. After many years of study, they can now be seen more clearly. It is time to take a sober second look before the serious harms described above are visited on Canadians by CASL. The review should examine the overall economic costs and benefits of CASL and the regulations, taking into account everything that is now known about its likely impacts. It should consider whether the benefits and detrimental impacts of CASL and the draft regulations warrant Canada having the most onerous rules in the world to regulate the dissemination of electronic messages and the installation of computer programs. The reviews should also include an examination of whether the impingements on speech and commerce violate the Charter of Rights and Freedoms and whether the prohibitions are so broad and ambiguous as to be constitutionally too vague to be valid.

I thank you for taking the time to consult with Canadians about the draft regulations. I trust this submission will be helpful in your important deliberations.

Yours truly,

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