CASL Compliance Enforcement Update Impact on Business 2016

CASL Compliance & Enforcement Update: Impact on Business 2016 IT. CAN Annual Conference Montreal| October 24, 2016 | Scott Smith

When CASL was first conceived in the mid 2000’s • Over 80% of email traffic was spam • Email filtering software was rudimentary and required resources of the end user.

Is Spam really a problem? • Today, less than 50% of email is considered spam • 99. 9% of spam is caught in filters managed by service providers with no effort on the part of users The real reason CASL was introduced

Spam: share of global email traffic 2007 -2015 Global spam volume as percentage of total e-mail traffic from 2007 to 2015 data 100, 0% 92, 6% 90, 0% 88, 5% 88, 1% 84, 9% 77% 80, 0% 75, 2% 69, 2% Percentage of email traffic 70, 0% 59, 7% 60, 0% 54, 1% 50, 0% 40, 0% 30, 0% 20, 0% 10, 0% 2007 2008 Note: Worldwide; 2007 to 2015 Further information regarding this statistic can be found on page 8. Source: Trustwave; ID 420400 2009 2010 2011 2012 2013 2014 2015

Spam: share of global email traffic 204 -2016 Global spam volume as percentage of total e-mail traffic from January 2014 to June 2016, by month data 80, 0% 69, 9% 70, 0% 65, 7% 71, 1% 69, 8% 63, 5% 64, 8% 67%67, 2% 66, 53% 66, 41% 64, 88% 64, 33% 61, 9% 59, 7% Percentage of email traffic 60, 0% 59, 62% 56, 2% 55, 6% 54, 42% 54, 14% 54, 11% 53, 6%53, 2%54, 2% 52, 8% 59, 46% 56, 52% 56, 51% 55, 78% 54, 61% 50, 0% 40, 0% 30, 0% 20, 0% 10, 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun '14 '14 '14 '15 '15 '15 '16 '16 '16 Note: Worldwide; January 2014 to June 2016 Further information regarding this statistic can be found on page 8. Source: Kaspersky Lab; ID 420391

Spam e-mail: leading countries of origin of spam 2016 Leading countries of origin for unsolicited spam emails as of 2 nd quarter 2016, by share of worldwide spam volume data Percentage of spam mails worldwide 0, 0% 2, 0% 4, 0% 6, 0% 8, 0% 10, 0% United States 10, 79% Vietnam 10, 1% India 10, 01% China 6, 52% Mexico 4, 55% Russia 4, 07% France 3, 6% Brazil 3, 28% Germany Turkey 2, 97% 2, 3% Note: Worldwide; 2 nd quarter 2016 Further information regarding this statistic can be found on page 8. Source: Kaspersky Lab; ID 263086 12, 0%

The rate of spam originating from Canada is less than 0. 5%.

Countries most targeted by malicious mailshots 2016 Distribution of e-mail antivirus activations as of 1 st quarter 2016, by country data Percentage of spam mails worldwide 0, 0% 2, 0% 4, 0% 6, 0% 8, 0% 10, 0% Germany 9, 43% Brazil 7, 35% Italy 6, 65% Great Britain 4, 81% Russia 4, 47% Japan 4, 29% United States 3, 95% France 3, 53% 2, 51% Note: Worldwide; 1 st quarter 2016 Further information regarding this statistic can be found on page 8. Source: Kaspersky Lab; ID 420411 14, 0% 16, 0% 18, 0% 20, 0% 18, 93% China Austria 12, 0%

Perceived influence of CASL on spam amount 2015 Amount of spam received after Canada's Anti Spam Legislation (CASL) introduction according to consumers in Canada as of August 2015 0, 0% 5, 0% 10, 0% data Share of respondents 15, 0% 20, 0% 25, 0% 30, 0% Received the same amount of spam 29, 5% Did not receive less spam 29, 4% Received more spam 5, 4% Note: Canada; August 24 to 29, 2015; 1, 000 Respondents; refers mostly to marketing spam Further information regarding this statistic can be found on page 8. Source: Various sources (itrac. Marketer); ID 478046 35, 0%

Forms of spam considered the most offensive according to Canadians 2015 Leading forms of spam considered as offensive according to consumers in Canada as of August 2015 data Share of respondents 0, 0% 10, 0% 20, 0% 30, 0% 40, 0% 50, 0% Unsolicited calls 59, 8% Spam e-mails Misleading advertising Note: Canada; August 24 to 29, 2015; 1, 000 Respondents; refers mostly to marketing spam Further information regarding this statistic can be found on page 8. Source: Various sources (itrac. Marketer); ID 478097 60, 0% 49, 1% 38, 9% 70, 0%

Attitudes toward retailer email ads in the U. S. 2014, by gender Perception of retailer promotional emails and ads among email users in the United States in 2014, by gender Chart Title Female 0, 0% Male 10, 0% Share of respondents 20, 0% 30, 0% 40, 0% 50, 0% 60, 0% 70, 0% 80, 0% 78% Find it useful when retailer sends me emails featuring recommended products based on what I've previoulsy purchased 83% 72% Find it useful when a retailer sends me emails featuring recommended products based on what I've looked at online, but not purchased Find it useful when I see online ads featuring images of products I previously viewed on a retailer's website Like it when retailers personalize my emails by using my name in the subject line or the body of email Find it useful when a retailer recomends products on the pages of its website while I'm shopping Note: United States; December 2 to 4, 2014; 18 years and older; 2, 042 Respondents; among email users who opened and read promotional emails; respondents who somewhat or strongly agree Further information regarding this statistic can be found on page 8. Source: e. Marketer; Various sources (Listrak); ID 381620 90, 0% 71% 67% 72% 66% 71% 63% 73%

Typical actions by U. S. customers when not wanting permission e-mails Subscribers' typical actions when they are no longer interested in a company's permission e-mails as of 2011 0, 0% 10, 0% 20, 0% Click the link to "unsubscribe" Action 17% Click on the "spam" or "junk" button 8% Nothing, just ignore the e-mails 6% 2% Note: United States; 2011 Further information regarding this statistic can be found on page 8. Source: Exact. Target; ID 276428 30, 0% Share of respondents 40, 0% 50, 0% 60, 0% 70, 0% 67% Delete e-mails when they arrive Set up a filter in my e-mail program data 80, 0%

24% of total advertising spending is dedicated to electronic marketing. Spending on Internet advertising was higher than: • • Radio advertising in 2007 Daily papers in 2010 Specialized channels in 2011 General channels in 2013

In a study of 500 businesses • 10% stopped email marketing all together • 30% curtailed marketing lists • 48% believe they are no longer competitive with US counterparts.

Private Right of Action

Share of Canadians likely to sue for CASL violations 2015 Percentage of consumers who were likely to consider legal action under Canada's Anti Spam Legislation (CASL) in Canada as of August 2015 data Share of respondents 0, 0% 5, 0% 10, 0% 15, 0% Very likely Likely 30, 0% 11, 7% Note: Canada; August 24 to 29, 2015; 1, 000 Respondents; refers mostly to marketing spam Source: Various sources (itrac. Marketer); ID 477999 25, 0% 13, 9% Somewhat likely Further information regarding this statistic can be found on page 8. 20, 0% 28, 8% 35, 0%

Share of Canadians not likely to sue for CASL violations 2015, by age Percentage of consumers who were not likely to consider legal action under Canada's Anti Spam Legislation (CASL) in Canada as of August 2015, by age group data Share of respondents 0, 0% 18 -24 years 25 -34 years 20, 0% 30, 0% 40, 0% 50, 0% 38, 7% 38, 3% 45 -54 years 55 -64 years Note: Canada; August 24 to 29, 2015; 1, 000 Respondents; refers mostly to marketing spam; among consumers who would choose not to participate in a CASL lawsuit Further information regarding this statistic can be found on page 8. Source: Various sources (itrac. Marketer); ID 478110 60, 0% 55, 3% 58, 6% 70, 0%

Questions?