Tuesday, 12 January 2021 15:20

Data Mobility (Portability) in Canada's Bill C-11

Written by  Teresa Scassa
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This post is the third in a series that considers the extent to which the Digital Charter Implementation Act (Bill C-11) by overhauling Canada’s federal private sector data protection law, implements the principles contained in the government’s Digital Charter. This post addresses the fourth principle of the Charter: Transparency, Portability and Interoperability, which provides that “Canadians will have clear and manageable access to their personal data and should be free to share or transfer it without undue burden.”

Europe’s General Data Protection Regulation (GDPR) introduced the concept of data portability (data mobility) as part of an overall data protection framework. The essence of the data portability right in article 20 of the GDPR is:

(1) The data subject shall have the right to receive the personal data concerning him or her, which he or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller without hindrance from the controller to which the personal data have been provided [...]

In this version, the data flows from one controller to another via the data subject. There is no requirement for data to be in a standard, interoperable format – it need only be in a common, machine-readable format.

Data portability is not a traditional part of data protection; it largely serves consumer protection/competition law interest. Nevertheless, it is linked to data protection through the concept of individual control over personal information. For example, consider an individual who subscribes to a streaming service for audiovisual entertainment. The service provider acquires considerable data about that individual and their viewing preferences over a period of time. If a new company enters the market, they might offer a better price, but the consumer may be put off by the lack of accurate or helpful recommendations or special offers/promotions tailored to their tastes. The difference in the service offered lies in the fact that the incumbent has much more data about the consumer. A data mobility right, in theory, allows an individual to port their data to the new entrant. The more level playing field fosters competition that is in the individual’s interest, and serves the broader public interest by stimulating competition.

The fourth pillar of the Digital Charter clearly recognizes the idea of control that underlies data mobility, suggesting that individuals should be free to share or transfer their data “without undue burden.” Bill C-11 contains a data mobility provision that is meant to implement this pillar of the Charter. However, this provision is considerably different from what is found in the GDPR.

One of the challenges with the GDPR’s data portability right is that not all data will be seamlessly interoperable from one service provider to another. This could greatly limit the usefulness of the data portability right. It could also impose a significant burden on SMEs who might face demands for the production and transfer of data that they are not sufficiently resourced to meet. It might also place individuals’ privacy at greater risk, potentially spreading their data to multiple companies, some of which might be ill-equipped to provide the appropriate privacy protection.

These concerns may explain why Bill C-11 takes a relatively cautious approach to data mobility. Section 72 of the Consumer Privacy Protection Act portion of Bill C-11 provides:

72 Subject to the regulations, on the request of an individual, an organization must as soon as feasible disclose the personal information that it has collected from the individual to an organization designated by the individual, if both organizations are subject to a data mobility framework provided under the regulations. [My emphasis]

It is important to note that in this version of mobility, data flows from one organization to another rather than through the individual, as is the case under the GDPR. The highlighted portion of s. 72 makes it clear that data mobility will not be a universal right. It will be available only where a data mobility framework is in place. Such frameworks will be provided for in regulations. Section 120 of Bill C-11 states:

120 The Governor in Council may make regulations respecting the disclosure of personal information under section 72, including regulations

(a) respecting data mobility frameworks that provide for

(i) safeguards that must be put in place by organizations to enable the secure disclosure of personal information under section 72 and the collection of that information, and

(ii) parameters for the technical means for ensuring interoperability in respect of the disclosure and collection of that information;

(b) specifying organizations that are subject to a data mobility framework; and

(c) providing for exceptions to the requirement to disclose personal information under that section, including exceptions related to the protection of proprietary or confidential commercial information.

The regulations provide for frameworks that will impose security safeguards on participating organizations, and ensure data interoperability. Paragraph 120(b) also suggests that not all organizations within a sector will automatically be entitled to participate in a mobility framework; they may have to qualify by demonstrating that they meet certain security and technical requirements. A final (and interesting) limitation on the mobility framework relates to exceptions to disclosure where information that might otherwise be considered personal information is also proprietary or confidential commercial information. This gets at the distinction between raw and derived data – data collected directly from individuals might be subject to the mobility framework, but profiles or analytics based on that data might not – even if they pertain to the individual.

It is reasonable to expect that open banking (now renamed ‘consumer-directed finance’) will be the first experiment with data mobility. The federal Department of Finance released a report on open banking in January 2020, and has since been engaged in a second round of consultations. Consumer-directed finance is intended to address the burgeoning fintech industry which offers many new and attractive financial management digital services to consumers but which relies on access to consumer financial data. Currently (and alarmingly) this need for data is met by fintechs asking individuals to share account passwords so that they can regularly scrape financial data from multiple sources (accounts, credit cards, etc.) in order to offer their services. A regulated framework for data mobility is seen as much more secure, since safeguards can be built into the system, and participants can be vetted to ensure they meet security and privacy standards. Data interoperability between all participants will also enhance the quality of the services provided.

If financial services is the first area for development of data mobility in Canada, what other areas for data mobility might Canadians expect? The answer is: not many. The kind of scheme contemplated for open banking has already required a considerable investment of time and energy, and it is not yet ready to launch. Of course, financial data is among the most sensitive of personal data; other schemes might be simpler to design and create. But they will still take a great deal of time. One sector where some form of data mobility might eventually be contemplated is telecommunications. (Note that Australia’s comparable “consumer data right” is being unrolled first with open banking and will be followed by initiatives in the telecommunications and energy sectors).

Data mobility in the CPPA will also be limited by its stringency. It is no accident that banking and telecommunications fall within federal jurisdiction. The regulations contemplated by s. 120 go beyond simple data protection and impact how companies do business. The federal government will face serious challenges if it attempts to create data mobility frameworks within sectors or industries under provincial jurisdiction. Leadership on this front will have to come from the provinces. Those with their own private sector data protection laws could choose to address data mobility on their own terms. Quebec has already done this in Bill 64, which would amend its private sector data protection law to provide:

112 [. . .] Unless doing so raises serious practical difficulties, computerized personal information collected from the applicant must, at his request, be communicated to him in a structured, commonly used technological format. The information must also be communicated, at the applicant’s request, to any person or body authorized by law to collect such information.

It remains to be seen what Alberta and British Columbia might decide to do – along with Ontario, if in fact it decides to proceed with its own private sector data protection law. As a result, while there might be a couple of important experiments with data mobility under the CPPA, the data mobility right within that framework is likely to remain relatively constrained.

Teresa Scassa

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