Dodgy digital app marketers under watchdogs' glares

Unscrupulous app producers collecting more information than needed from technology users could soon find themselves in a tug of war between the federal Office of the Privacy Commissioner (OPC) and competition bureaus.

Make no mistake, though: if either of those agencies finds app creators or others working in the digital economy are fleecing customers or violating their privacy through collecting more data than customers expect, those creators are going to pay for it.

As privacy and keeping one’s personal data protected in an increasingly digital world becomes more and more important, it’s generally been the privacy gatekeepers who have done the watchdog work.

Lately, the federal privacy commissioner (with some provincial counterparts) has been looking at social media companies’ use of personal data, but regulators are diving deeper into the digital realm to ensure Canadians know what is being done with their personal information and stopping those who would use it in violation of applicable laws.

Now, Canada’s new federal commissioner of competition Matthew Boswell and his office have also taken up that standard.

“When firms make false or misleading representations about their collection of data, consumers may be led to provide information that they would not otherwise have offered or acquire products that they might not otherwise select,” bureau spokesperson Jayme Albert said June 11.

“Put simply, firms should truthfully represent pertinent information to allow consumers to make informed choices.”

It’s work that builds on a directive issued by Minister of Innovation, Science and Economic Development Canada Navdeep Bains; on May 21, Bains said the government must review how to continue to manage the risks and ill effects of data abuse and of the potentially emerging data monopolies, as data uses are increasingly a means by which companies seek competitive advantages

“While there has been considerable focus on privacy and on digital infrastructure, we must also reflect upon the potential for market distortions and for unforeseen disruptions where abuses of market power can occur in the collection, processing and use of data,” Bains said.

The minister asked Boswell to work with department staff to revisit bureau policy to ensure it has the tools and resources needed to properly deter anti-competitive behaviour and so Canada can succeed in the digital economy.

“I think it is critical that we review recent trends and emerging market practices and international approaches with an eye to ensuring our own law, policy and practice is keeping pace with the dynamism of the marketplace,” Bains said. “This is critical to maintaining the confidence and trust of citizens as these disruptions unfold.”

The privacy commissioner continues a quest for legislation to be stronger so as to protect digital privacy and to have sharper enforcement teeth.

“Privacy cannot be protected without independent regulators, empowered to impose fines and to verify compliance proactively, to ensure organizations are truly accountable for the protection of information,” Privacy Commissioner of Canada Daniel Therrien said May 28.

However, Therrien said, with business models increasingly opaque and information flows more and more complex, individuals may be unaware of business practices that may harm them.

“This is why it’s so important for the regulator to have the authority to proactively inspect the practices of organizations,” Therrien told the International Grand Committee on Big Data, Privacy and Democracy in Ottawa May 28. “Where consent is not practical and organizations are expected to fill the protective void through accountability, these organizations must be required to demonstrate true accountability upon request.”

The bureau recognizes there will be an overlap in responsibilities under the Competition Act and the Personal Information Protection and Electronic Documents Act (PIPEDA).

Albert said one PIPEDA principle is “to prevent organizations from collecting information by misleading or deceiving individuals about the purpose for which information is being collected."

“Similarly, the Competition Act condemns representations made to the public that are false or misleading in a material respect,” he said. “Therefore, the bureau's mandate to ensure truth in advertising may overlap with the OPC's mandate to protect privacy rights.”

Albert stressed both mandates are important to protect consumers in the digital economy.

“The bureau will continue to enforce provisions of the Competition Act even if the offending actions may be subject to enforcement under PIPEDA,” he said. “The bureau shares the OPC's view of the importance of collaboration in this area and looks forward to working with the OPC to protect Canadians.”

The maximum penalty for violating Competition Act deceptive marketing provisions is $10 million for a corporation and $750,000 for an individual.

These caps increase to $15 million and $1 million, respectively, for subsequent violations of these provisions by the same parties,” Albert said.

— Jeremy Hainsworth, Glacier Media

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