An Individual fined $50,000 Under CASL – Section 7
The CRTC has published an enforcement decision known as VT250813-Jimmy Genesse under Canada’s Anti-Spam Legislation (CASL). In this case, the CRTC determined that a party (Jimmy Genesse) violated the law by installing or causing to be installed computer programs in connection with commercial activity, without meeting the legal requirements under CASL. As a result, the CRTC imposed an administrative monetary penalty (a fine) against that party.
Under CASL, there are several key rules. Most people are familiar with the rule about sending commercial electronic messages (emails, texts, etc.), which requires consent and certain content and unsubscribe features. But CASL also has rules about computer programs and re-direction of messages: if someone wants to install software or a program that re-directs electronic messages, on another person’s computer (or cause it to be installed), they must prove they obtained express consent and provide required disclosures. The VT250813 decision deals with precisely that part of the law.
Paragraph 7(1)(a) of the Act states in part that:
7 (1) It is prohibited, in the course of a commercial activity, to alter or cause to be altered the transmission data in an electronic message so that the message is delivered to a destination other than or in addition to that specified by the sender, unless
(a) the alteration is made with the express consent of the sender or the person to whom the message is sent (…).
What makes this decision significant is how rare it is to see fines under Section 7 of CASL. Section 7 deals with altering transmission data (routing or forwarding electronic messages). Many of the publicly reported CASL enforcement actions have focused on violations of the email / messaging rules (Section 6, etc.). It is much less common to see enforcement actions, or fines, directly tied to the computer-program / transmission side of CASL. The fact that the CRTC has pursued and fined a party under Section 7 (or the related installation provisions) sends a strong message that it is willing to enforce the lesser-used provisions of CASL, not just the more common spam-email rules.
What one would expect in a Section 7 CASL violation case
To put this into context:
- Section 7 of CASL deals with the alteration of transmission data (routing, forwarding, etc.) and also relates to the installation of computer programs (in commercial activity) without proper consent.
- Under CASL, the CRTC may issue a Notice of Violation and assess an administrative monetary penalty (AMP).
- The amount of a penalty typically depends on factors such as the severity of the violation, the number of recipients or installations affected, whether the violator cooperated, and the violator’s ability to pay.
In a well-documented CASL enforcement case (for messaging), the CRTC may:
- List the specific acts found to be violations (e.g. installing software without express consent, or modifying transmission data in a way that breaches the law).
- Show how those acts contravened CASL (citing statutory language).
- Assess mitigation/aggravation factors (cooperation, repeated behaviour, steps to remediate, etc.).
- Set an AMP, or reduce it if the party contests or shows mitigation.
Because Section 7 / computer program installations are much less litigated publicly, the decision may also include more explanation or legal precedent (or none, adding to uncertainty) about how to interpret the statute in that domain.
Caveat:
A person who is served with an NOV has the opportunity to make representations before the Commission with respect to the amount of the penalty or the alleged violations pursuant to sections 24 and 25 of the Act and may further bring an appeal in the Federal Court of Appeal from a decision rendered by the Commission pursuant to section 27 of the Act.
A person who is served with an NOV has also the opportunity to enter into an undertaking in connection to these acts and omissions pursuant to subsection 21(4) of the Act, under the conditions provided by subsection 21(2) of the Act.
What is known about CASL enforcement in the less common areas (computer programs, Section 7)
From what legal commentary and past CASL enforcement records reveal:
- Most past enforcement actions focus on commercial electronic messages (CEMs) (e.g. spam emails, SMS, etc.).
- Enforcement in the area of installing software or altering transmission data has been much more rare. Legal commentary notes that CASL’s prohibition on installing computer programs “has hardly been touched” in many enforcement actions. McMillan LLP
- Because of that rarity, when a case is taken in that domain, it is more revealing about the CRTC’s priorities and approach.
Legal commentary also discusses how courts and regulators assess CASL penalties:
- The CRTC often adjusts penalty amounts downward when the respondent shows limited ability to pay, or cooperates fully.
- In messaging cases, the CRTC factors in number of complaints received, duration of violations, whether unsubscribe mechanisms were functional, and whether the party cooperated.
- The CRTC can impose liability on senior officers or directors under CASL if they authorized, acquiesced to, or participated in violations. Canadian Lawyer
- In the context of computer programs, those same concepts might apply, for example, if a party installed software without consent, but later tried to remediate or cooperate, a penalty might be moderated.
Why this case is noteworthy (revisited with context)
Because public CASL enforcement in the domain of computer program installations or transmission alteration is so uncommon, a case like VT250813 stands out. It suggests:
- The CRTC is sending a message that it will not confine enforcement to just the better-trodden field of commercial messages. (spam)
- Entities that deal with software installations (e.g. apps, background modules, updates) need to pay attention, even those not sending marketing emails.
