Canadian COMPETITION LAW

January 17, 2020

In an interesting and rather novel case, the Competition Bureau (Bureau) is reportedly investigating whether three major Canadian political parties (the Liberal, Conservative and NDP parties) violated the Competition Act in relation to their collection and use of Canadians’ personal information.

According to media reports (see here, here, here and here), the Centre for Digital Rights (Centre) filed a complaint with the Bureau alleging a large-scale misuse of big data and targeted digital advertising by the Liberals, Conservatives and NDP.

More specifically, the Centre’s competition law complaint argues that the political parties’ privacy policies are false or misleading under the Competition Act because they do not fully divulge the scope and range of personal information collected from Canadians, or how it is used to “develop voter profiles and deploy targeted digital advertising for the purpose of influencing Canadians’ voting behavior.”

Or, in the words of the Centre’s legal counsel:

“Nowhere in the privacy policies do they talk about the fact that they take the list of electors from Elections Canada, combine it with other information they may scrape from social media platforms, and create almost a digital voodoo doll … of voters.”

The Centre also filed submissions with the federal Privacy Commissioner, the B.C. Information and Privacy Commissioner, the Commissioner of Elections Canada and the CRTC.

While at first blush, this issue would appear to be more of a privacy law matter (i.e., relating to the scope of consent for the collection of personal information and subsequent use and protection of information), the civil and criminal general misleading advertising provisions of the Competition Act are very broad.  They are not restricted to false or misleading product claims to consumers.

In this regard, the civil misleading advertising provision (section 74.01) prohibits representations to the public, for the purpose of promoting the supply or use of a product or any business interest, that are false or misleading in a material respect.  The criminal provision (section 52) is substantially similar, except that it also requires that the prosecution establish that a false or misleading claim was made intentionally (i.e., knowingly or recklessly).

It would appear that the requirement for a representation to the public would be easily met, assuming the political parties’ privacy policies were publicly posted.  As such, the key issues appear to be: first, whether the claims were made to promote a product or business interest; second, whether the claims were false or misleading; and third, whether they were material.

Helpfully for the complainant, the definition of “product” in the Competition Act is very broad, non-exhaustive and includes a “service of any description whether industrial, trade, professional or otherwise”.  The definition of “business” is similarly broad, is not exhaustive and includes, among other things, “the raising of funds for charitable or other non-profit purposes.”  Canadian courts have also interpreted “business purpose” broadly including to apply to non-profit activities.

With respect to whether claims made by the parties in privacy polices were false or misleading, this will be a matter of interpretation based on the specific wording of the policies.  However, it is important to note that a claim can be found to misleading not only if literally false claims are made but also if, among other things, material information is omitted that may influence a consumer in making a purchasing decision or otherwise altering their conduct.  As such, if important information was not disclosed to Canadians in the parties’ privacy policies that may have affected their decision as to whether or not to provide their personal information or to take other steps, then in theory such omissions could fall within the scope of “false or misleading” for the purposes of the misleading advertising provisions of the Competition Act.

Interestingly, the complainant in this case is also a six-resident complaint under section 9 of the Competition Act.  Where a six-resident complaint is filed with the Bureau, the Bureau must commence a formal investigation (though is not required to complete it).  Also, when the Bureau concludes a formal investigation, it must report to the Minister, which can, therefore, mean that a six-resident complaint can be stronger than a normal complaint (under which the Bureau has no obligation to commence a formal inquiry or report to the Minister).

Given that Big Data has been a recent Bureau enforcement and advocacy priority recently, as well as the potentially wide impact of this case, it will be interesting to see whether the Bureau will in fact commence any enforcement against the three political parties (or whether, for example, whether there will be a negotiated remedy for the parties to improve their privacy policy disclosures).

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