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Monday, 29 August 2022 08:05
Oversight and Enforcement Under Canada's Proposed AI and Data Act
The Artificial Intelligence and Data Act (AIDA) in Bill C-27 will create new obligations for those responsible for AI systems (particularly high impact systems), as well as those who process or make available anonymized data for use in AI systems. In any regulatory scheme that imposes obligations, oversight and enforcement are key issues. A long-standing critique of the Personal Information Protection and Electronic Documents Act (PIPEDA) has been that it is relatively toothless. This is addressed in the first part of Bill C-27, which reforms the data protection law to provide a suite of new enforcement powers that include order-making powers for the Privacy Commissioner and the ability to impose stiff administrative monetary penalties (AMPs). The AIDA comes with ‘teeth’ as well, although these teeth seem set within a rather fragile jaw. I will begin by identifying the oversight and enforcement powers (the teeth) and will then look at the agent of oversight and enforcement (the jaw). The table below sets out the main obligations accompanied by specific compliance measures. There is also the possibility that any breach of these obligations might be treated as either a violation or offence, although the details of these require elaboration in as-yet-to-be-drafted regulations.
Compliance with orders made by the Minister is mandatory (s. 19) and there is a procedure for them to become enforceable as orders of the Federal Court. Although the Minister is subject to confidentiality requirements, they may disclose any information they obtain through the exercise of the above powers to certain entities if they have reasonable grounds to believe that a person carrying out a regulated activity “has contravened, or is likely to contravene, another Act of Parliament or a provincial legislature” (s. 26(1)). Those entities include the Privacy Commissioner, the Canadian Human Rights Commission, the Commissioner of Competition, the Canadian Radio-television and Telecommunications Commission, their provincial analogues, or any other person prescribed by regulation. An organization may therefore be in violation of statutes other than AIDA and may be subject to investigation and penalties under those laws. The AIDA itself provides no mechanism for individuals to file complaints regarding any harms they may believe they have suffered, nor is there any provision for the investigation of complaints. The AIDA sets up the Minister as the actor responsible for oversight and enforcement, but the Minister may delegate any or all of their oversight powers to the new Artificial Intelligence and Data Commissioner who is created by s. 33. The Data Commissioner is described in the AIDA as “a senior official of the department over which the Minister presides”. They are not remotely independent. Their role is “to assist the Minister” responsible for the AIDA (most likely the Minister of Industry), and they will also therefore work in the Ministry responsible for supporting the Canadian AI industry. There is essentially no real regulator under the AIDA. Instead, oversight and enforcement are provided by the same group that drafted the law and that will draft the regulations. It is not a great look, and, certainly goes against the advice of the OECD on AI governance, as Mardi Wentzel has pointed out. The role of Data Commissioner had been first floated in the 2019 Mandate Letter to the Minister of Industry, which provided that the Minister would: “create new regulations for large digital companies to better protect people’s personal data and encourage greater competition in the digital marketplace. A newly created Data Commissioner will oversee those regulations.” The 2021 Federal Budget provided funding for the Data Commissioner, and referred to the role of this Commissioner as to “inform government and business approaches to data-driven issues to help protect people’s personal data and to encourage innovation in the digital marketplace.” In comparison with these somewhat grander ideas, the new AI and Data Commissioner role is – well – smaller than the title. It is a bit like telling your kids you’re getting them a deluxe bouncy castle for their birthday party and then on the big day tossing a couple of couch cushions on the floor instead. To perhaps add a gloss of some ‘independent’ input into the administration of the statute, the AIDA provides for the creation of an advisory committee (s. 35) that will provide the Minister with “advice on any matters related to this Part”. However, this too is a bit of a throwaway. Neither the AIDA nor any anticipated regulations will provide for any particular composition of the advisory committee, for the appointment of a chair with a fixed term, or for any reports by the committee on its advice or activities. It is the Minister who may choose to publish advice he receives from the committee on a publicly available website (s. 35(2)). The AIDA also provides for enforcement, which can take one of two routes. Well, one of three routes. One route is to do nothing – after all, the Minister is also responsible for supporting the AI industry in Canada– so this cannot be ruled out. A second option will be to treat a breach of any of the obligations specified in the as-yet undrafted regulations as a “violation” and impose an administrative monetary penalty (AMP). A third option is to treat a breach as an “offence” and proceed by way of prosecution (s. 30). A choice must be made between proceeding via the AMP or the offense route (s. 29(3)). Providing false information and obstruction are distinct offences (s. 30(2)). There are also separate offences in ss. 38 and 39 relating to the use of illegally obtained data and knowingly or recklessly making an AI system available for use that is likely to cause harm. Administrative monetary penalties under Part 1 of Bill C-27 (relating to data protection) are quite steep. However, the necessary details regarding the AMPs that will be available for breach of the AIDA are to be set out in regulations that have yet to be drafted (s. 29(4)(d)). All that the AIDA really tells us about these AMPs is that their purpose is “to promote compliance with this Part and not to punish” (s. 29(2)). Note that at the bottom of the list of regulation-making powers for AMPs set out in s. 29(4). This provision allows the Minister to make regulations “respecting the persons or classes of persons who may exercise any power, or perform any duty or function, in relation to the scheme.” There is a good chance that the AMPs will (eventually) be administered by the new Personal Information and Data Tribunal, which is created in Part 2 of Bill C-27. This, at least, will provide some separation between the Minister and the imposition of financial penalties. If this is the plan, though, the draft law should say so. It is clear that not all breaches of the obligations in the AIDA will be ones for which AMPs are available. Regulations will specify the breach of which provisions of the AIDA or its regulations will constitute a violation (s. 29(4)(a)). The regulations will also indicate whether the breach of the particular obligation is classified as minor, serious or very serious (s. 29(4)(b)). The regulations will also set out how any such proceedings will unfold. As-yet undrafted regulations will also specify the amounts or ranges of AMPS, and factors to take into account in imposing them. This lack of important detail makes it hard not to think of the oversight and enforcement scheme in the AIDA as a rough draft sketched out on a cocktail napkin after an animated after-hours discussion of what enforcement under the AIDA should look like. Clearly, the goal is to be ‘agile’, but ‘agile’ should not be confused with slapdash. Parliament is being asked to enact a law that leaves many essential components undefined. With so much left to regulations, one wonders whether all the missing pieces can (or will) be put in place within this decade. There are instances of other federal laws left incomplete by never-drafted regulations. For example, we are still waiting for the private right of action provided for in Canada’s Anti-Spam Law, which cannot come into effect until the necessary regulations are drafted. A cynic might even say that failing to draft essential regulations is a good way to check the “enact legislation on this issue” box on the to-do list, without actually changing the status quo.
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Privacy
Monday, 06 July 2015 13:58
Ambush Marketing and the Pan Am/Parapan Am Games
The Pan Am/Parapan Am Games are set to open in Toronto on July 10, 2015. As with any other major sporting event, these Games raise the possibility of ambush marketing – a form of marketing activity designed to take advantage of public interest in a high profile event. Major event organizers (including the International Olympic Committee, FIFA, and others) see ambush marketing as a threat to their ability to obtain top dollar for lucrative sponsorship opportunities, and they have increasingly put pressure on host countries to enact legislation to prevent ambush marketing. This legislation has proven controversial – and for good reason. If you are interested in ambush marketing and the Pan Am/Parapan Am Games, you can read my blog post on this issue on Osgoode’s IPilogue here.
Published in
Ambush Marketing
Tuesday, 18 February 2014 14:52
Ambush Marketing and the Olympics
With the winter Olympics now getting massive media attention, it is perhaps worth pausing to think about that other, non-official Olympic activity – ambush marketing. Indeed a recent threat of litigation by the Canadian Olympic Committee against North Face for ambush marketing is an indicator that the Olympic marketing games are also in full swing. Like many other major sporting events, the Olympics have become heavily dependent on funding raised through sponsorship programs. The International Olympic Committee (IOC), in fact, has a carefully structured sponsorship program called TOP, which manages Olympic marketing opportunities. Sponsors pay substantial sums of money for the rights to use certain Olympic symbols in tightly controlled ways. What a sponsor is paying for is the right to associate their own brand with the brand values of the Olympics. The Olympic logos and symbols, used by the Olympic organizers and licensed for use to sponsors, are protected by trademark or Olympic-related legislation. Any company that uses these marks without permission infringes upon these trademark rights. Ambush marketing is a term used to describe marketing practices which attempt to create an association with a major event without the ambushing company having paid for sponsorship rights. However, what distinguishes it from simple trademark infringement is the fact that ambush marketers generally do not use the trademarks of the event organizers. Instead, ambush marketers create associations through more oblique references to the event itself. The huge amounts of money involved in the organization of major events, and in paying for sponsorships, have led organizations like the IOC to push for legislation to protect specifically against ambush marketing. In fact, it is now no longer possible to succeed in a bid to host the Olympics without a promise to enact anti-ambush marketing legislation. Canada did so for the Vancouver 2010 Olympic Games. Section 4 of the Olympic and Paralympic Marks Act specifically created a “right of association” and two Schedules to the legislation set out lists of common words that might be considered to trigger an illegal association. These words included: gold, silver, bronze, winter, 2010, twenty-ten, Whistler, Vancouver, and Games. Anti-ambush marketing legislation is controversial. Some of this controversy is discussed by Benoit Séguin and me in a recent article on the subject. (The article is published in a new book titled Intellectual Property for the 21st Century: Interdisciplinary Approaches). It is not clear, for example, that ambush marketing legislation is truly necessary – beyond serving as a ‘comfort blanket’ for event sponsors. Concerns have also been raised that by attempting to outlaw “associations”, such legislation is unduly broad and vague. It also goes far beyond preventing major competitors of event sponsors from launching ambush marketing campaigns leading up to and during the event. For example, such legislation generally applies equally to all businesses, large or small, even if no one would expect a small local business to be a major event sponsor. Such laws limit the ability of small businesses to make even indirect reference to a major event taking place within their own community. This would seem to be a significant – and rather disproportionate -- limitation on freedom of expression. Further, such legislation privileges event organizers over all other stakeholders. Many athletes or national sporting organizations have their own commercial sponsors – indeed, athletes might be unable to train or compete without such sponsors, and national sporting organizations would not be in a position to develop young talent without commercial sponsorship. Yet when an athlete competes in the Olympics, their own commercial sponsors are limited in the extent to which they can celebrate their sponsored athlete’s achievement without running afoul of anti-ambush marketing laws. In another article, my co-authors and I also raise the issue of whether anti-ambush-marketing legislation might actually allow large corporations to put their legal teams to work to exploit loopholes in the legislation, with the result that major competitors of event sponsors are able to launch challenge-proof ambushes, while ‘associations’ created by small and medium businesses lacking the same resources are suppressed by the law. Part of the problem with anti-ambush marketing laws is that there is a very broad range of conduct that can fall within the ambit of an “association” with an event. Some activity is clearly more problematic than others. In the case of North Face, it would appear that the company launched a new line of red and white, maple leaf flag-emblazoned sportswear in the lead up to the Sochi Games. Although no Olympic logos were used on the clothing, some items apparently featured dates linked to the Games and some promotional materials may have made direct reference to Sochi. The collection was initially called “village wear” and is now referred to as the “international collection”. The characters RU14 also appeared on some items. NorthFace is not, of course, an Olympic sponsor. The matter may never head to court – if it did, it might provide an opportunity for the courts to explore some of the challenging legal questions around the limits of legal protection against ambush marketing.
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Ambush Marketing
Monday, 13 August 2012 15:02
Guilt By Association: The London 2012 OlympicsI recently blogged for FreeSpeechDebate.Org about free speech, ambush marketing and the London Olympics. The posting is available here: http://freespeechdebate.com/en/discuss/guilt-by-association-the-london-2012-olympics/
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Ambush Marketing
Thursday, 15 December 2011 12:39
Owning Public Events: ‘Performance-Enhancing” Rights and the OlympicsPicture the small university town which holds its convocation ceremonies every spring. Proud parents and siblings, aunts, uncles and grandparents flock to the town to see junior graduate. This is the single biggest annual event in the community, and it creates a boon for local businesses of all kinds, including hotels, restaurants, bars, gift shops, florists, and convenience stores. Many of these local businesses will hang signs or banners in their windows celebrating the graduating class. In doing so, they recognize the importance of the event to the community, and they celebrate a significant occasion in the lives of residents and visitors to the community. Many of the businesses also recognize the important economic benefit brought to the community by the students, and feel it appropriate to signal this appreciation. Graduating students have likely worked as part-time employees in many of these businesses. In some cases, business owners are alumni of the schools, or have children who have attended the school. Of course, it is also true that the businesses recognize that they may benefit financially by tapping into the enthusiasm and pride of visitors to the community. Now picture the university deciding that it “owns” convocation. After all, the event only happens because of the operations of the university. It is a major, recurring event that requires organization and preparation. The University, which is in part publicly funded, has no doubt experienced budget cuts and dislikes raising tuition to meet its needs. It might have a few key private sector donors that it would like to reward and encourage as much as possible. These donors, it reasons, have supported the university, and so should receive some sort of exclusivity when it comes to major university events. The donors think this is a good idea too. So, the university decides that it is entitled to control the goodwill associated with convocation; it wants to prevent local businesses from trading on that goodwill without paying for the right to do so. Alternatively, it might decide that rights to associate commercially with convocation should be available only to a few select corporations – those who are able to pay premium prices for an exclusive opportunity. It decides to take legal action against any company that puts up signs or banners that make any direct or indirect reference to its major event. Does this scenario sound absurd and far-fetched? Perhaps it is an extreme example, but it is clear that we are beginning to head in the direction of recognizing some form of property right in the goodwill associated with major events. And there are good reasons why we should be concerned. We are now only months away from the 2012 summer Olympic Games that will take place in London, England. To call this a major event is an understatement. Along with the fanfare, pomp and ceremony of the Games, we will be bombarded with advertising and merchandising campaigns. These campaigns, for the most part will be engineered by Olympic sponsors – those mega corporations that have shelled out enormous sums of money for the privileges that come with sponsorship. There are other voices in the story of marketing and the Olympic Games, however. For years, non-sponsors have sought to associate themselves with the Olympic Games (or with other major sporting events, for that matter) without paying the exorbitant sponsorship fees. Such campaigns are called “ambush marketing”, and they are often cleverly designed so as to create associations without actually using the protected intellectual property of the International Olympic Committee (IOC) (which includes all manner of trademarks such as the name Olympics and the famous rings). For example, in 1992, Mastercard, a commercial rival of credit card company and Olympic sponsor VISA, ran an advertising campaign that stated: “And remember, to visit Spain, you don't need a visa”. (Get it?) In frustration at the persistence of companies seeking to reference a mega international event in their marketing campaigns without having paid through the nose for the right to do so, the IOC has, for a number of years now, made a commitment to enact strong anti-ambush marketing legislation a condition of a successful Olympic bid. You might not have noticed that Canada did so for the 2010 Winter Olympics in Vancouver. This is because (as Dana Ellis, Benoit Séguin and I argue elsewhere), Canada’s constitutional division of powers made the drafting of such a law a tricky business, and the legal departments of major corporate non-sponsors quickly found the obvious loopholes and drove their marketing trucks right through them. (Does anyone remember the Lululemon ambush?) Being a unitary state, these division of powers issues are not shared by Great Britain, and their anti-ambush marketing laws are among the most stringent ever seen. Former British Minister of Sport, Richard Caborn, explained to Parliament that the laws were drafted in extremely broad and open-ended terms because “we must have flexibility in our approach, to allow us to respond appropriately to any changing demands by the IOC – and there will be some – and to enable us to react to any new or innovative ambush marketing techniques that might arise between now and 2012.” (House of Commons Debates (U.K.), 2005). If that makes you feel even a little bit queasy, consider the draft regulations that have just been proposed in the U.K. The regulations give an extraordinarily broad definition of advertising. It includes just about any kind of message placed in any location that is “wholly or partly for the purpose of promotion, advertisement, announcement or direction.” It expressly captures the display of messages on a human or animal body, having a human or animal carry anything on which an advertisement is displayed, wearing advertising attire, or displaying an advertisement on an individual’s body (which includes using body paint). The regulations go so far as to target human and animal bodies because these were among the last uncontrolled communicative spaces left around the Games. You may recall that during the 2010 FIFA World Cup of Soccer in South Africa, a group of Dutch women were arrested and charged with ambush-marketing offences (yes, FIFA now insists on such legislation too) after they attended a football match together wearing unbranded orange dresses that had been supplied by a Dutch brewery. The charges were only dropped after the story received an embarrassing amount of media coverage that made the laws seem rather difficult to justify. It is safe to assume that the Dutch women in orange dresses would not be welcome at the London Games either. We all know that the female body is considered by marketers a powerful advertising medium; what is interesting in this example is that the women themselves were criminalized for being the vehicle by which a banned message was communicated. It is also interesting that instead of letting major corporations and event organizers duke it out in the business arena, these pillars of the free market economy have insisted upon government intervention to silence all possible distracting messaging during substantial periods before, during and after the event. And although the most problematic ambush marketing campaigns are ones that come from major corporate rivals of event sponsors, these are also the players that have the most resources to hire teams of clever lawyers to find the legal loopholes for them. Yet ambush marketing laws are applied to all businesses, large or small, with the result that small local businesses in the communities which host such major events, are allowed only to carry on their normal marketing practices and may not even mention that big event taking place on their doorstep. The mom and pop diner offering gold, silver or bronze breakfast specials during the Olympics is among those least able to respond to or fight the cease and desist letter they would inevitably receive. By creating property-like rights in major events, governments have acted to further shrink the already embattled public domain and have contributed once again to the creeping propertization of just about anything. In this case, the IP-like right is given to event organizers, notwithstanding the fact that a major public event is a multi-stakeholder enterprise. These events do not take place without national and local government involvement, without taxpayer support, without citizens making sacrifices related to local disruptions, without athletes training and preparing for years in advance, and without the support of thousands of local volunteers – to name just a few of the stakeholders. Event organizers are being given rights in something that is not solely theirs, and in doing so, they have the power to shut down the very natural ways in which communities respond and interact to events taking place in their midst. Universities are not next in the queue for protection under this sort of legislation. Expect it to reach all major international sporting events first (look for it again in Canada, for example, when Canada hosts the Pan-Am Games in 2016). Then look for it in relation to major sporting events such as the Stanley Cup or the Superbowl. Once it gets that far, then universities can get into what will likely be a very long line up to claim legally enforceable rights in the public domain.
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Ambush Marketing
Friday, 17 June 2011 11:29
Ambush Marketing and the Right of Association: Clamping Down on References To that Big Event with All the Athletes in a Couple of Years“Ambush Marketing and the Right of Association: Clamping Down on References To that Big Event with All the Athletes in a Couple of Years”, now published in the Journal of Sport Managemet. PDF available here
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Refereed Articles
Friday, 17 June 2011 11:24
Framing Ambush Marketing as a Legal Issue: An Olympic PerspectiveDana Ellis, Teresa Scassa & Benoit Séguin, “Framing Ambush Marketing as a Legal Issue: An Olympic Perspective”, (2011) 14:3 Sport Management Review 297-308. This paper examines the emerging trend of host countries using legislation to protect the Olympic brand and control ambush marketing. More specifically, it will discuss Canada’s Olympic and Paralympic Marks Act in depth. Issues related to framing ambush marketing as a legal issue as opposed to a business issue are examined. The consequences of placing ambush marketing in a legal context are considered from a legal and business management perspective.
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Refereed Articles
Tuesday, 22 June 2010 11:40
Faster, Higher, Stronger: The Protection of Olympic and Paralympic Marks Leading up to Vancouver 2010“Faster, Higher, Stronger: The Protection of Olympic and Paralympic Marks Leading up to Vancouver 2010”– edited reprint of refereed article, in Vassil Griginov, ed., The Olympics: A Critical Reader, Routledge, 2010, pp. 344-357 The original (and longer) version of this book chapter appeared in the U.B.C. Law Review in 2008 (listed under refereed publications). The chapter evaluates Canada’s Olympic and Paralympic Marks Act of 2007, with a particular focus on ambush marketing.
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Refereed Book Chapters
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Electronic Commerce and Internet Law in Canada, 2nd EditionPublished in 2012 by CCH Canadian Ltd. Intellectual Property for the 21st CenturyIntellectual Property Law for the 21st Century: Interdisciplinary Approaches |