Bill C-28: The Cost to Business outweighs the Benefits.
Bill C-28 deals with the sending of mass emails, and specifically targets those who employ mass emails as a regular marketing technique in business. Although the term spamming comes to mind, there is a legitimate role in mass email marketing that does bring financial benefits to businesses. That being said, Bill C-28, will bring about legislation that will hinder marketing from businesses and can reduce the viability of small businesses.
The forthcoming Act, that will stem from Bill C-28, can bring about a shift in how we do business. But, before we continue, it is important to address the popular position of many in business towards Bill C-28.
Many have used an alarmist approach to this issue, which does not fairly garner a balanced response. Correspondence is circulating with the position that Bill C-28 will bring about regulations that take a "ban-all" approach to commercial electronic messages (CEM) or emails. This is misleading.
The “Ban-all” position is not true, because Bill-C-28 does address what it identifies as, "implied consent", and defines that consent liberally even to the point of placing a time limit. In business, that time limit is two years in order to establish a commercial business relationship that provides consent to send an unsolicited CEM. Although this appears to be restrictive, It is reasonable to assume that many business owners who are emailing clients have a business relationship that has been established within a two year period. The Bill goes so far as protecting that business practice for services, products, subscriptions, investments, goods, land interest, property rights, investments and gaming, even bartering. All these are covered by definition as found in Section 10 of Bill C-28.
Bill C-28 also provides the ability to CEM, where the business doing the communication is an Association, such as the Chamber of Commerce, Political Parties and Charities, and those organizations that have a two year relationship with individuals on a volunteer basis.
It is important the business commuity take a more balanced approach at this forthcoming legislation instead of using the alarmist "ban-all" position.
With the provisions of implied consent, and the requirement of obtaining consent prior to communicating electronically with a prospect, Bill C-28 is at least identifying two legitimate sales practices, while clearly preventing the act of mass emailing prospects based on purchasing data mined from other sources. In this respect Bill C-28 will not actually hurt small business. However, as in many foisted regulations it will force businesses to compliance and in doing so expend capital and resources through changing business practices.
An area that may cause concern is found in the penalty sections of Bill C-28. Specifically, how the Act will dole out punishment. Like many laws it will take time for Canadian businesses to adjust, and like many laws there will be casualties. Specifically the contradiction found in the penalty section of the Bill. Section 20(2) states, "The purpose of a penalty is to promote compliance with this Act and not punish." After stating that position, we see in Section 20(4), "The maximum penalty for a violation is $1,000,000 in the case of an individual, and $10,000,000 in the case of corporation." Although these are maximums, the forthcoming Act will leave a great deal of interpretation and power to whomever sits in judgment of the person accused of contravening the Act. It is reasonable to assume that even a penalty of $5,000 can kill some businesses.
The costs to businesses to create policies and procedures to protect themselves from false accusations will be stifling. It will cost in terms of time and resources. It will cost in terms of increased liability insurance. It will cost in terms of decreased marketing efforts. In the end, due to the international nature of the internet the sincere efforts of the Canadian parliament will not solve the original problem, the proliferation of spam.
Bill C-28 should be looked at from a financial perspective. When the root of most decisions is usually driven by money, what is the financial motivation for this bill? A simple look at the fundamentals of the situation, reveal a possible motive. Marketing for business is a revenue generator for many major corporations. Facebook and Google are great measures of how big this industry is. Their model is to gain profit from advertising. Until now, there has been no way for government to gain any revenue or tax from email. The choices for the government to gain revenue from email advertising would be to license and tax CEM or regulate and penalize. The first step in this process would be to regulate through bill C-28 then at some date in the future, apply licensing to gain revenue. You can see this already in motion. There will be a public outcry over C-28, that says we still need email as a form of marketing. This will pave the road to implement licensing on email advertising to avoid penalties.