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ELECTRONIC COMMERCE AND BUSINESS TRANSACTIONS - Consumer protection

Thursday, July 09, 2020 @ 8:32 AM  


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Two appeals by CompuFinder from related compliance and enforcement decisions by the Canadian Radio-Television and Telecommunications Commission (CRTC). The appellant was a small business that provided professional training courses. Its primary means of business development was e-mail marketing. The CRTC investigated three advertising campaigns conducted by the appellant. The marketing messages were sent without recipients’ prior consent and did not contain a functioning “unsubscribe” link. In the first decision under appeal, the CRTC dismissed the appellant’s constitutional challenge to a piece of legislation amending statutes regulating electronic commerce and related electronic communications (Canada's Anti-Spam Law (CASL Act). The CRTC found that the CASL Act was intra vires Parliament’s trade and commerce power, and that any infringement of freedom of expression was justified under s. 1 of the Canadian Charter of Rights and Freedoms (Charter). The CRTC declined to find that the CASL Act’s offence provisions involved criminal proceedings for the purpose of ss. 7, 8 and 11(d) of the Charter. In the second decision under appeal, the CRTC found that the appellant committed four breaches of the CASL Act. A defence of due diligence was rejected. The CRTC imposed a $200,000 administrative monetary penalty rather than the $1.1 million penalty set out in the notice of violation. CompuFinder appealed.

HELD: Appeals dismissed. The CRTC did not err in finding the CASL Act intra vires Parliament, as the general regulatory scheme governing commercial electronic messages under the CRTC’s oversight was a valid exercise of Parliament’s power over general trade and commerce affecting Canada as a whole. The CRTC did not err in finding that the Act’s violation of s. 2(b) of the Charter was justified under s. 1. The Act did not have a substantial deleterious effect on forms of expression other than commercial expression, and that impact upon commercial expression was mitigated by numerous exceptions and a prescribed method of compliance. The Act’s benefits in prohibiting spam communication were substantial, non-speculative and outweighed the deleterious effects. The CRTC did not err in finding that the Act’s administrative penalty regime, and the penalty imposed in this case, did not violate s. 11(d) of the Charter given its characterization as a regulatory rather than criminal process. Although the potential fines were substantial, the purpose was regulatory rather than punitive. The CRTC did not err in finding that the Act did not violate ss. 7 or 8 of the Charter. In considering the appellant’s alleged offences, the CRTC did not err in its interpretation and application of the business-to-business exemption, the implied consent requirements regarding conspicuous publication, or the unsubscribe mechanism requirements.

3510395 Canada Inc. v. Canada (Attorney General), [2020] F.C.J. No. 674, Federal Court of Appeal, M. Nadon, W.W. Webb and J.M. Woods JJ.A., June 5, 2020. Digest No. TLD-July62020008