Canadian Lawyer InHouse

MAY 2015 6 INHOUSE News Roundup Quebec company hit with $1.1-million penalty under CASL A lmost a year after coming into force, the CRTC issued its fi rst fi ne and notice of violation under Canada's anti-spam rules to a Quebec company it says was in "fl agrant" violation of the law. The Canadian Radio-television and Telecommu- nications Commission's chief compliance and en- forcement offi cer issued a notice to Compu-Finder March 5. At $1.1 million the fi ne is well under the $10-million maximum allowable under the law. In a statement, Manon Bombardier, chief compli- ance and enforcement offi cer with the CRTC said Compu-Finder " . . . fl agrantly violated the basic principles of the law by continuing to send unsolicited commercial electronic messages after the law came into force to e-mail addresses it found by scour- ing web sites. Complaints submitted to the Spam Reporting Centre clearly indicate that consumers didn't fi nd Compu-Finder's offerings relevant to them. By issuing this Notice of Violation, my goal is to encourage a change of behaviour on the part of Compu-Finder such that it adapts its business practices to the modern reality of electronic commerce and the requirements of the anti-spam law." The investigation found Compu-Finder sent commercial elec- tronic messages without the recipient's consent as well as e-mails in which the unsubscribe mechanisms did not work. The e-mails sent by Compu-Finder promoted training courses to businesses. The four alleged violations occurred between July 2, 2014 and Sept. 16, 2014. An analysis of the complaints made to the Spam Reporting Centre of this industry sector shows that Compu- Finder accounts for 26 per cent of all complaints submitted. "It's interesting that it's a B2B case," says Steve Szentesi of Steve Szentesi Law PC. "It's an example of the fact that just because there are categories of B2B implied consent, they are not blanket exemptions and they still have requirements associated to meet them." Compu-Finder has 30 days to submit written representation to the CRTC, or pay the penalty. At press time the 30 days had not expired, but a spokes- person at the CRTC indicated they do not comment on on-going investigations. The company also has the option of requesting an undertaking with the CRTC — a form of settlement under the legislation to which the CRTC would have to agree. "The ball is now in the court of the com- pany," says Lisa Chamzuk, a partner with Lawson Lundell LLP in Vancouver. "It will be interesting to see if the company actu- ally sees this as a violation. If the company doesn't make any representation they will be deemed to be in violation of the act." Chamzuk says the penalties are not "designed to punish but to encourage c ompliance." "I think this will make everybody sit up and take notice and look at their own policies," she says. Compu-Finder declined comment when contacted by Canadian Lawyer InHouse. The process in place is an unusual one, says Mi- chael Fekete of Osler Hoskin & Harcourt LLP in Toronto. If an organization that receives the notice of violation disagrees they can challenge the notice of violation. "The fact they have mentioned the un- dertaking is interesting — I think they are highlight- ing that it is an option for organizations to come and make a deal with the CRTC rather than have the notice of violation and related fi ne stand. It isn't entirely clear," he says. The fi ne may be considered appropriate given the size of the company, says Fekete. "I think the CRTC would have balanced the desire to have a meaningful penalty that really does send the right message to organizations that they must comply, at the same time not put this company out of business," Fekete says. Others think the fi ne is steep. "I'm actually a little bit surprised at the size of the fi ne for the fi rst penalty we've seen publicly an- nounced," says Shaun Brown of nNovation LLP in Ottawa. "It is, however, consistent with how the CRTC has done enforcement un- der the unsolicited telecommunications rules. If you look at the fi nes under that in the past — all the facts they have published seem to be clear that it has involved multiple violations." There have been more than 245,000 complaints about spam registered with the CRTC. "We expect as the CRTC deals with the low-hanging fruit, it will likely move to investigate organizations that may not be so obviously in violation of the law, or their practices may not violate the principles of the law but they may fi nd they violated a specifi c rule or requirement of the law," says Fekete. The CRTC can also issue warning letters, preservation demands, notices to produce, restraining orders, and notices of violation. IH Gowlings dips its toes in Cuban waters A nticipating the business boom to come as Cuba opens up over the next few years, Gowling Lafl eur Henderson LLP announced in March it is launching a service in Havana for its clients. The introduction of the initiative comes on the heels of the announcement the Unit- ed States and Cuba have begun the process of normalizing diplomatic relations. Led by partners Paul Fornazzari and Stu- art Olley, under the umbrella of Gowlings Consulting Inc., the fi rm's Cuba initiative will assist clients from Canada, Europe, and other international markets who are seeking to pursue business and investment opportu- nities in Cuba. violation. I

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