Data Finds CASL’s Feared Chilling Effect On Business

April 28, 2015 Ben Myers
Effect of CASL on both spam and non-spam emails from Cloudmark data.

Effect of CASL on both spam and non-spam emails from Cloudmark data.

If you send email as part of your marketing, you probably had a rollicking debate in your office about whether your business is Canadian Anti-Spam Law (CASL) compliant. You may have read through brochures, blogs, and government-created PDFs, but at the end of the day, were you really sure that you wouldn’t be fined?

CASL went into full effect on July 1, 2014 and in March 2015, the CRTC began handing down large fines to a few large Canadian businesses that were apparently in violation of the parameter of the law. Now, almost a year since the law came into full effect, the impact of the regulation is now coming into view.

Network security firm Cloudmark says that CASL has reduced unwanted spam (according to its own definitions) and that it also reduced the number of emails received over all (emphasis added):

Last year Canada implemented one of the strongest anti-spam laws in the world, CASL. We took a close look at the impact, and the results surprised us. We saw a 37% reduction in spam originating from Canada, but it wasn’t just spam that went down. Over all, Canadians received 29% less email after CASL was implemented. We believe this is because there was a lot of marketing email which was not technically spam but did not meet the string requirements for affirmative consent required by CASL. The Canadian law is proving effective in reducing inbox clutter and could act as a model for stronger anti-spam laws in the US, UK and other countries.

This is exactly what Canadian businesses have feared since the legislation was proposed: rather than chance a fine, fewer emails are being sent between Canadians who might have a legitimate reason to communicate. These emails may fall into one of the numerous exceptions based on previous business relationships, but nevertheless, they go unsent because of CASL’s strict conditions of compliance.

The Canadian Competition And Regulatory Law Blog stated many of these concerns in August 2014. Basically, the law is overreaching, overly harsh and will stifle business relationships that are created or maintained via email.

In short, in my humble view, this new law represents staggering overreach by regulators, is unnecessary due to basic tech solutions and it seems to me most importantly, the law illustrates a serious and profound disconnect between federal legislators and regulators on the one hand and the realities of Canadian businesses (and their need to market to effectively compete) on the other.

The Burnaby, British Columbia Board of Trade (BBOT) highlighted its concerns about limiting communication and therefore competitiveness in a letter to its members last year:

4 - Competitiveness is at risk
Without significant modifications and exceptions, this legislation will impede commercial speech, an essential ingredient of market competitiveness and lead to reduced competition and higher prices.

Among a number of recommended amendments to the legislation, BBOT proposed the broadening of certain definitions related to the law to allow people to contact other people that they know in the larger business community or personal associations:

Definition of personal relationship – under the regulations, referrals may occur where the sender has a personal, non-business relationship with the recipient. The definition of personal relationship is very narrow. The Chamber recommends the definition of personal relationship be expanded to include all types of personal relationships, such as broader group of friends, and people who know each other from being members of same clubs, associations, educational, recreational, business, and professional settings.

Cloudmark’s data shows that these fears may be realized in the post-CASL Canada. What remains to be seen is whether the volume of non-spam email will return to normal levels in coming months as Canadian businesses and individuals acclimatize themselves to the nuances of CASL regulation, or if we should simply expect 30% less email from Canadians from now on.

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