CASL (Anti-spam Law) & Contests: 5 Ways Canada’s New Spam Law May Impact Your Contest or Sweepstakes
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules and forms for a Canadian contest/sweepstakes? We offer Canadian contest rules and forms for random draw, skill and other common types of Canadian contests (i.e., contest precedents and forms). For more information see Canadian Contest Forms/Precedents.
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As companies and marketers well know by now (or should), Canada’s new federal anti-spam legislation (CASL) will come largely into force on July 1st. The new law will of course impact electronic marketing to Canadians in many sectors and require that marketers consider how they need to comply with CASL both before and after in force.
One area, among many others, that CASL will affect is contests/sweepstakes to the extent they use e-mail or other electronic communication (e.g., e-mail entries and follow ups, contests run in connection with surveys, where later electronic marketing is intended, etc.).
In this respect, in working on a few contests and similar promotions in the run up to CASL’s coming into force, it has become clear that there are a few (and likely more) key CASL considerations that marketers now need to think about when using e-mail or other electronic communication in conjunction with contest/sweepstakes.
Some potential CASL and contest issues to consider include:
E-mail entries and follow-ups: Where contests involve e-mail entries and follow ups, sponsors now need to think about whether they may follow up with entrants or whether consent is required and has been obtained in compliance with CASL (as well as the form and other requirements of CASL met). So CASL compliance in the context of contests now requires thinking about whether prior opt-ins have been obtained for marketing lists, communications may be to categories that are either exempt or a category of implied consent exists, contest entry forms include CASL consents, prescribed disclosures (i.e., ID requirements) have been made in consent requests and subsequent electronic communications, etc. Like post-CASL marketing generally, the exercise in relation to contests largely turns on thinking about who you’re marketing to and the three core CASL requirements: consent, identification and easy unsubscribes.
Later e-mail marketing: It is quite common for sponsors to include a right of subsequent marketing to entrants following the end of a contest. In addition to common-sense privacy law considerations – for example, obtaining informed consent, describing what entrants’ information will be used for, etc. – sponsors now need to also think about whether they have need and have obtained express consent in advance prior to marketing to contest entrants (and that the other CASL requirements have also been met).
Contests run in conjunction with surveys: Sometimes companies run contests/sweepstakes in conjunction with surveys. You know the deal: “Answer our survey – it won’t take long – and have a chance to win …” In addition to needing contest rules and forms, like any other contest, promoters running contests in conjunction with surveys now also need to think about the consent and form requirements of CASL (and other CASL requirements).
Contests marketed to Canadians (e.g., North America wide promotions): Given that CASL also applies to international marketers directing their marketing efforts at Canadians (e.g., North America wide promotions), it will also be necessary going forward for marketers to think about whether they have consent to communicate with entrants via e-mail or other electronic means, engage in subsequent e-mail marketing, etc.
Potential affiliate or third party marketer risk: One last point where CASL is likely to have an impact on contests (as well as other promotions more generally) is where companies use affiliate or third party marketers. This is because CASL includes a number of vicarious liability provisions that provide, among other things that individuals/companies may be liable for violations committed by agents acting on their behalf. So what this point essentially boils down to is: do you know whether your affiliate marketer / third party agency is CASL compliant? And then, as the follow up point, should you exercise some diligence to ensure that they are – for example, CASL compliance representation in third party marketer agreements, indemnification in the event of a violation/enforcement, etc.
Of course, like any marketing, every contest/sweepstakes and promotion is different which means that the CASL requirements for contests will vary.
Having said that, it is a very good idea given both the detail of the new law and potential risk (up to $1 million for individuals and $10 million for corporations) to pause and think how CASL may affect a planned contest and what may need to be done to make it CASL compliant.
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Tips For Complying With
CASL (Canadian Anti-Spam Law)
Canada’s federal anti-spam legislation (CASL) came into force in 2014. Since then, electronic marketers and their advisors have been working to comply with what remains a complex law with outstanding uncertainties in some key areas. Having said that, many of the core requirements of CASL are not overly difficult to comply with (though continue to be misunderstood in many cases).
The following are some key legal tips for complying with CASL:
Express Consent. If you cannot rely on any category of implied consent (e.g., an existing business relationship within two years of a purchase) or a CASL exemption, ensure that you have collected and documented express consent from recipients. Express consent requests must include all of the information set out in CASL and its regulations otherwise the consent will not be valid. Failure to correctly collect consent is the most common CASL compliance error we see and a key basis for CRTC enforcement. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
Implied Consent. If you are relying on one or more categories of implied consent to send commercial electronic messages (CEMs) (e.g., an existing business relationship within two years of a purchase or six months of a product inquiry) ensure that all of the requirements of the particular type of implied consent are met. Remember that there is not a single blanket type of implied consent under CASL; rather, there are many different types of implied consent each with their own specific requirements. Also, as with express consent, CEMs that rely on implied consent must still include the prescribed sender identification information and unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
Consent For Third Parties To Send CEMs. Under CASL, consent to send CEMs can be requested for a sender themselves, identified third parties (or multiple identified third parties) or unidentified third parties (i.e., entities whose identities are not yet known when consent is requested). Importantly, however, each type of consent request has specific requirements for the request and, in the case of consent requests on behalf of unidentified third parties, somewhat complex additional requirements. The failure of marketers to correctly request consent for third parties (e.g., partners, affiliates, co-sponsors in promotions, etc.) is another CASL-related error that we regularly see. For more information, see: Anti-Spam Law (CASL) FAQs and Canadian Anti-Spam Law (CASL) Precedents.
CASL Exemptions. Similar to implied consent, there is no single exemption from CASL but many types of exemptions. If you are relying on a particular exemption (e.g., the “business-to-business” exemption) it is important to ensure that all of the requirements of the exemption are met. Importantly, there is little or no case law interpreting many CASL exemptions. This means that there may be more risk when relying on an exemption than express consent. Express consent is the strongest type of consent under CASL, considering that it does not expire unless a recipient unsubscribes.
Passive Consents. Remember that under CASL express consent or a category of implied consent is generally required to send CEMs unless a CASL exemption applies. As such, passive types of consents (e.g., language in general terms and conditions) will likely not be CASL compliant unless a sender does not need express consent (i.e., can rely on a category of implied consent or a CASL exemption).
Sharing Lists With Third Parties. Consider the potential risks of sharing e-mail or other electronic marketing lists with third parties. While this is certainly possible under CASL, marketers should be aware that there are specific requirements that must be met depending on who a list will be shared with (e.g., to expressly identify third parties with whom consent is being gathered on behalf of, including their contact information and other requirements for unidentified third parties). Marketers should also be aware that there is also potentially not only risk if they themselves violate CASL (e.g., send CEMs without consent), but also if they assist third parties that violate CASL. As such, it is often prudent for marketers that want to share electronic marketing lists with third parties to ensure that they have list sharing agreements in place with parties with whom they share e-mails. For more information, see: Anti-Spam Law (CASL) FAQs, Anti-Spam Law (CASL) Compliance Errors and Canadian Anti-Spam Law (CASL) Precedents. See also: Influencer, Co-Sponsor and List Sharing Agreements.
Sender Identification Information. Ensure that all CEMs include the prescribed sender identification information required by CASL unless an exemption applies. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Unsubscribe Mechanism. Ensure that all CEMs include a CASL-compliant unsubscribe mechanism. For more information, see: Anti-Spam Law (CASL) and Anti-Spam Law (CASL) FAQs.
Document Consent. Under CASL, the onus is on senders of CEMs to document consent. As such, it is important to document the type of consent (express or implied) or exemption being relied upon, evidence of consent (e.g., subscription logs, forms, dates and names/e-mail addresses), divide lists according to the type of consent or exemption being relied upon and to scrub lists after recipients have unsubscribed or the relevant time period for a category of implied consent has expired (e.g., two years after a purchase). Failure to adequately document consent is another CASL-related compliance error that we regularly see, including not documenting consent at all, not segregating distribution lists and inadequately documenting consents or types of implied consent. For more information, see: Anti-Spam Law (CASL), Anti-Spam Law (CASL) Compliance and Canadian Anti-Spam Law (CASL) Precedents.
CASL Compliance Program. Consider adopting a CASL compliance program, particularly if electronic marketing is a core aspect of your marketing strategy. The CRTC has issued guidance on CASL compliance programs including key recommended elements. For more information, see: Anti-Spam Law (CASL) Compliance and Canadian Anti-Spam Law (CASL) Precedents.
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
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Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
