CASL and B2B Marketing — What You Need to Know!
Ever since Canada’s Anti-Spam Legislation or CASL came into effect, it has been a source of fear and loathing for Canadian marketers relying on email to help fuel growth. A common fallacy is that CASL applies mainly to Business-to-Consumer (B2C) companies. Some believe the rules are more relaxed in a Business-to-Business (B2B) context, but this is not the case! With the risk of hefty fines, tarnished brand reputations, and future civil suits expected to increase, Canadian business operators cannot afford to ignore the rules.
CASL (Bill C-28) passed into law in late 2010, to replace the Electronic Commerce Protection Act. The Law is Canada’s attempt to follow in the footsteps of similar European regulations and the far less rigid CAN-SPAM law in the US. All are meant to cut down on irrelevant or offensive commercial emails filling personal and business inboxes.
Automated website scraping programs make it easy to harvest huge numbers of email addresses without consent from their owners. CASL was meant to crack down on this, along with other related forms of intrusive and misleading marketing practices. The law is a direct response to Canadians fed up with spam. A 2015 survey by itracMARKETER found 54.5% of Canadians would consider legal suits under CASL for spam violations. Since it’s inception, CASL has been a phased-in approach. Enforcement began on July 1, 2014 and the final provisions will go into effect on July 1, 2017.
The three agencies overseeing CASL include the Canadian Radio-Television and Communications Commission (CRTC), the Competition Bureau, and the Office of the Privacy Commission. Each jointly enforces different aspects of the law regarding Commercialized Electronic Messages (CEMs). A CEM, according to the CRTC, is any email or SMS message delivering text, images, voice or sound that promotes a product, service, property or person for the purpose of sales or subscriptions.
The rules for CEMs, according to the CRTC, apply to “all communications sent by Canadian companies to other Canadian businesses or messages routed through Canadian Servers.” In other words, CASL applies to any organization sending CEMs within Canada or from elsewhere but through servers located on Canadian soil. Canadian companies sending CEMs to the US or other countries will need to comply with privacy laws in those respective jurisdictions.
Violating CASL is not good for business. Penalties start at $200 per violation and scale to a maximum of $1 million a day for individuals and $10 million a day for organizations. Given that online marketing campaigns can contain thousands of emails, CASL fines can rack up very quickly. Regulators have already levied hefty fines on several Canadian businesses for non-compliance. The biggest penalty to date was a $1.1 million fine handed down to Compu-Finder, a Quebec-based B2B company which at that time had accrued a quarter of the spam complaints received by the CRTC’s Spam Reporting Centre. The law also imposes liability on those who “permit” spam. So if you’re a CEO or manager, you may be responsible for any employee-related CASL violations that occur under your watch.
The CRTC and Privacy Commission ultimately faulted Compu-Finder for: being negligent in its record-keeping; not using an adequate unsubscribe process, and sending promotions unrelated to the work of numerous recipients. For instance, Compu-Finder, which delivers lessons mostly in French in two Quebec cities, sent promotional CEMs to people thousands of miles away. One complainant reportedly included a government scientist receiving Compu-Finder emails about lessons on improving business profits
The CASL Chill Effect
A key point of controversy over CASL concerns how it differs from its US counterpart CAN-SPAM — the latter is an “opt-out” system where users must indicate they no longer want to receive promotional emails. In contrast, CASL is “opt-in”, where marketers must acquire proper consent from potential recipients before clicking that send button. The onus is then on the sender to prove consent is granted or inferred.
CASL critics, including many marketing firms, consider this opt-in feature to be highly restrictive, putting Canadian business at a disadvantage. A major issue is that CASL contains few mechanisms for dealing with foreign parties sending spam into Canada from countries with weaker anti-spam laws, including the US. Critics also claim CASL’s severity creates a “chill effect” that especially hurts small-to-medium-sized companies who rely on eMail marketing as a cost-effective channel for lead generation.
The law has proven to be double-edged. Research published by the network security firm Cloudmark, for example, found that a year after CASL went into effect, Canadians received two-fifths (39%) less spam and over a quarter (29%) less email. This is a good thing when it concerns workplace productivity.
However, of the Canadian businesses surveyed, almost half said CASL had hampered their promotion efforts (39%) or had impeded their ability to compete with US companies (48%). Ten percent said they had stopped sending commercial emails entirely — while another 30% stated they had significantly paired down their email lists.
B2B Boundaries of CASL
CASL does contain several intentional caveats meant to lessen the burden for B2B marketers. These include exceptions for family members, friends, and a few other groups. The most salient of these exceptions are conditions regulators lump into a category called “implied consent.” In brief, implied consent includes conditions when:
- Conspicuous Publication — email addresses are publically available in online directories, websites or trade magazines as examples.
- Disclosure — an email address was provided — i.e. someone gave you their business card or email address.
- Existing Business Relationship — there has been a transaction, inquiry, application or written contract for the purchase or barter of products, goods or services.
- Non-Business Relationship — the recipients are members of your organization, or they provided volunteer work, a donation or gift.
These exceptions provide B2B eMail marketers a few situations exempt from CASL’s opt-in consent requirements. But they’re still open to some interpretation. In a January 2014 Privacy Bulletin, the Canadian law firm McMillan concluded a B2B business could use these exceptions as a rationale for cold emailing possible clients. The same bulletin also warned CASL’s implied consent rules contained many fuzzy spots that will take time for courts and regulators to iron out. In the interim, the firm recommended caution — a message many businesses have taken to heart in cutting back their email lists and campaigns.
Key CASL Take-Aways
- CASL is just as important for B2B as it is for B2C.
- The laws are here to stay and in another year they will be even more stringent.
- On July 1, 2017, individuals and businesses will have the right to sue for CASL violations. Also, B2B email lists containing contacts with “implied consent” status will need review as some will no longer be eligible. Between now and then, companies need to clean up their email lists.
- Canadian B2B marketers should familiarize themselves with CASL’s exceptions. An excellent resource about this is available on the CRTC website. It’s also worth visiting the Canadian Government’s page and Deloitte’s FAQ.
- Carefully documented opt-in lists and record-keeping are also important aspects of CASL compliance
- B2B marketers must understand what the law considers “implied” vs. “expressed” consent (reference the links above for more information)
As bad as it may seem, there may be a bright spot with CASL. Adapting your B2B digital marketing strategy to CASL means moving away from mass mailing tactics towards highly personalized email campaigns focused on providing value. In other words, providing education and thought-leadership content to people who want it. With the right customized content, you generate better results more efficiently, because readers are more likely to be interested in what you have to say. At the end of the day, this all drives towards one of the most important tenets of marketing — relevance!
Disclaimer: Nothing stated in this article can, or should be considered as legal advice. The research and ideas presented come with interpretation and are intended to be purely informational.
Randy Fougere | Founder and President I have helped companies grow faster for more than 25 years. With deep expertise in marketing, sales and leadership, I started Think2Grow to help mid-sized B2B clients accelerate sales with thoughtful, results-driven marketing services.