CEO Pays $10,000 CASL Penalty

On June 12, 2017, CRTC entered into an undertaking with Mr. Halazon, CEO of Couch Commerce, Inc and it's subsidiaries. Mr. Halazon has agreed to make a monetary payment of $10,000.

In our conversations with many organizations considering the implementation of a CASL compliant program, the idea that CRTC would fine the officers or directors has been questioned. 

Section 31 of the Act reads as follows:
Directors, officers, etc., of corporations
31. An officer, director, agent or mandatary of a corporation that commits a violation is liable for the violation if they directed, authorized, assented to, acquiesced in or participated in the commission of the violation, whether or not the corporation is proceeded against.


This undertaking is a clear precedent  for how CRTC intends to enforce CASL. They entered into an agreement with the company to implement a CASL compliant program without a monetary penalty.

Instead, both parties agreed the CEO would pay the penalty! This sends a clear message in the wake of the private right of action being postponed by Minister Bains on June 8, 2017.

"Mr. Halazon has voluntarily entered into an undertaking with a designated person of the Commission in relation to an alleged violation of paragraph 6(2)(c) and non-compliance with subsections 11(1) and 11(3) of the Act, as well as subsection 3(2) of the Electronic Commerce Protection Regulations (CRTC)."

For your information here is the text from 6(2)(c)
Unsolicited electronic messages
6 (1) It is prohibited to send or cause or permit to be sent to an electronic address a commercial electronic message unless
Contents of message
(2) The message must be in a form that conforms to the prescribed requirements and must.
(c) set out an unsubscribe mechanism in accordance with subsection 11(1).

Section 3(2)
Other commercial electronic message
(3) An electronic message that contains a request for consent to send a message described in subsection (2) is also considered to be a commercial electronic message.

Section 11
Clarification
(11) For the purposes of subsection (10), the following organizations are considered to be businesses: (a) a cooperative as defined in subsection 2(1) of the Canada Cooperatives Act; (b) a cooperative corporation as defined in section 2 of the Cooperative Credit Associations Act; and (c) any similar organization incorporated under an Act of Parliament or the legislature of a province.

The mention of Section 10 is as follows:
Definition of existing business relationship
(10) In subsection (9), existing business relationship means a business relationship between the person to whom the message is sent and any of the other persons referred to in that subsection — that is, any person who sent or caused or permitted to be sent the message — arising from (a) the purchase or lease of a product, goods, a ser- vice, land or an interest or right in land, within the two-year period immediately before the day on which the message was sent, by the person to whom the mes- sage is sent from any of those other persons; (b) the acceptance by the person to whom the mes- sage is sent, within the period referred to in paragraph (a), of a business, investment or gaming opportunity offered by any of those other persons; (c) the bartering of anything mentioned in paragraph (a) between the person to whom the message is sent and any of those other persons within the period re- ferred to in that paragraph; (d) a written contract entered into between the person to whom the message is sent and any of those other persons in respect of a matter not referred to in any of paragraphs (a) to (c), if the contract is currently in ex- istence or expired within the period referred to in paragraph (a); or (e) an inquiry or application, within the six-month pe- riod immediately before the day on which the message was sent, made by the person to whom the message is sent to any of those other persons, in respect of any- thing mentioned in any of paragraphs (a) to (c).


"The investigation alleged that commercial electronic messages (CEMs) were sent or caused or permitted to be sent by Couch Commerce to recipients without a compliant unsubscribe mechanism during the period of 2 July 2014 to 9 September 2014, while Mr. Halazon was CEO of Couch Commerce. More specifically, it was alleged that the unsubscribe mechanism did not function, or could not be readily performed, or unsubscribe requests were not given effect until more than 10 business days after a request has been sent. It was also alleged that Mr. Halazon was personally liable for this violation pursuant to section 31 of the Act."

This sends a clear message to management: 
CASL compliance is not optional 

CRTC Bulletin





 

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