Teresa Scassa - Blog

Monday, 04 July 2022 06:10

Bill C-27’s Take on Consent: A Mixed Review

Written by  Teresa Scassa
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Note: this is the first in a series of blog posts on Bill C-27, also known as An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act.

Bill C-27 is a revised version of the former Bill C-11 which died on the order paper just prior to the last federal election in 2021. The former Privacy Commissioner called Bill C-11 ‘a step backwards’ for privacy, and issued a series of recommendations for its reform. At the same time, industry was also critical of the Bill, arguing that it risked making the use of data for innovation too burdensome.

Bill C-27 takes steps to address the concerns of both privacy advocates and those from industry with a series of revisions, although there is much that is not changed from Bill C-11. Further, it adds an entirely new statute – the Artificial Intelligence and Data Act (AIDA) – meant to govern some forms of artificial intelligence. This series of posts will assess a number of the changes found in Bill C-27. It will also consider the AIDA.

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The federal government has made it clear that it considers consent to be a cornerstone of Canadian data protection law. They have done so in the Digital Charter, in Bill C-11 (the one about privacy), and in the recent reincarnation of data protection reform legislation in Bill C-27. On the one hand, consent is an important means by which individuals can exercise control over their personal information; on the other hand, it is widely recognized that the consent burden has become far too high for individuals who are confronted with long, complex and often impenetrable privacy policies at every turn. At the same time, organizations that see new and emerging uses for already-collected data seek to be relieved of the burden of obtaining fresh consents. The challenge in privacy law reform has therefore been to make consent meaningful, while at the same time reducing the consent burden and enabling greater use of data by private and public sector entities. Bill C-11 received considerable criticism for how it dealt with consent (see, for example, my post here, and the former Privacy Commissioner’s recommendations to improve consent in C-11 here). Consent is back, front and centre in Bill C-27, although with some important changes.

Section 15 of Bill C-27 reaffirms that consent is the default rule for collection, use or disclosure of personal information, although the statute creates a long list of exceptions to this general rule. One criticism of Bill C-11 was that it removed the definition of consent in s. 6.1 of PIPEDA, which provided that consent “is only valid if it is reasonable to expect that an individual to whom the organization’s activities are directed would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.” Instead, Bill C-11 simply relied upon a list of information that must be provided to individuals prior to consent. Bill C-27’s compromise is found in the addition of a new s. 15(4) which requires that the information provided to individuals to obtain their consent must be “in plain language that an individual to whom the organization’s activities are directed would reasonably be expected to understand.” This has the added virtue of ensuring, for example, that privacy policies for products or services directed at youth or children must take into account the sophistication of their audience. The added language is not as exigent as s. 6.1 (for example, s. 6.1 requires an understanding of the nature, purpose and consequences of the collection, use and disclosure, while s. 15(4) requires only an understanding of the language used), so it is still a downgrading of consent from the existing law. It is, nevertheless, an improvement over Bill C-11.

A modified s. 15(5) and a new s. 15(6) also muddy the consent waters. Subsection 15(5) provides that consent must be express unless it is appropriate to imply consent. The exception to this general rule is the new subsection 15(6) which provides:

(6) It is not appropriate to rely on an individual’s implied consent if their personal information is collected or used for an activity described in subsection 18(2) or (3).

Subsections 18(2) and (3) list business activities for which personal data may be collected or used without an individual’s knowledge or consent. At first glance, it is unclear why it is necessary to provide that implied consent is inappropriate in such circumstances, since no consent is needed at all. However, because s. 18(1) sets out certain conditions criteria for collection without knowledge or consent, it is likely that the goal of s. 15(6) is to ensure that no organization circumvents the limited guardrails in s. 18(1) by relying instead on implied consent. The potential breadth of s. 18(3) (discussed below), combined with s. 2(3) makes it difficult to distinguish between the two, in which case, the cautious organization will comply with s. 18(3) rather than rely on implied consent in any event.

The list of business activities for which no knowledge or consent is required for the collection or use of personal information is pared down from that in Bill C-11. The list in C-11 was controversial, as it included some activities which were so broadly stated that they would have created gaping holes in any consent requirement (see my blog post on consent in C-11 here). The worst of these have been removed. This is a positive development, although the provision creates a backdoor through which other exceptions can be added by regulation. Further, Bill C-27 has added language to s. 12(1) to clarify that the requirement that the collection, use or disclosure of personal information must be “only in a manner and for purposes that a reasonable person would consider appropriate in the circumstances” applies “whether or not consent is required under this Act.”

[Note that although the exceptions in s. 18 are to knowledge as well as consent, s. 62(2)(b) of Bill C-27 will require that an organization provide plain language information about how it makes use of personal information, and how it relies upon exceptions to consent “including a description of any activities referred to in subsection 18(3) in which it has a legitimate interest”.]

Bill C-27 does, however, contain an entirely new exception to the collection or use of personal data with knowledge or consent. This is found in s. 18(3):

18 (3) An organization may collect or use an individual’s personal information without their knowledge or consent if the collection or use is made for the purpose of an activity in which the organization has a legitimate interest that outweighs any potential adverse effect on the individual resulting from that collection or use and

(a) a reasonable person would expect the collection or use for such an activity; and

(b) the personal information is not collected or used for the purpose of influencing the individual’s behaviour or decisions.

So as not to leave this as open-ended as it seems at first glance, a new s. 18(4) sets conditions precedent for the collection or use of personal information for ‘legitimate purposes’:

(4) Prior to collecting or using personal information under subsection (3), the organization must

(a) identify any potential adverse effect on the individual that is likely to result from the collection or use;

(b) identify and take reasonable measures to reduce the likelihood that the effects will occur or to mitigate or eliminate them; and

(c) comply with any prescribed requirements.

Finally, a new s. 18(5) requires the organization to keep a record of its assessment under s. 18(4) and it must be prepared to provide a copy of this assessment to the Commissioner at the Commissioner’s request.

It is clear that industry had the ear of the Minister when it comes to the addition of ss. 18(3). A ‘legitimate interest’ exception was sought in order to enable the use of personal data without consent in a broader range of circumstances. Such an exception is found in the EU’s General Data Protection Regulation (GDPR). Here is how it is worded in the GDPR:

6(1) Processing shall be lawful only if and to the extent that at least one of the following applies:

[. . . ]

(f) processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child.

Under the GDPR, an organization that relies upon legitimate interests instead of consent, must take into account, among other things:

6(4) [. . . ]

(a) any link between the purposes for which the personal data have been collected and the purposes of the intended further processing;

(b) the context in which the personal data have been collected, in particular regarding the relationship between data subjects and the controller;

(c) the nature of the personal data, in particular whether special categories of personal data are processed, pursuant to Article 9, or whether personal data related to criminal convictions and offences are processed, pursuant to Article 10;

(d) the possible consequences of the intended further processing for data subjects;

(e) the existence of appropriate safeguards, which may include encryption or pseudonymisation.

Bill C-27’s ‘legitimate interests’ exception is different in important respects from that in the GDPR. Although Bill C-27 gives a nod to the importance of privacy as a human right in a new preamble, the human rights dimensions of privacy are not particularly evident in the body of the Bill. The ‘legitimate interests’ exception is available unless there is an “adverse effect on the individual” that is not outweighed by the organization’s legitimate interest (as opposed to the ‘interests or fundamental freedoms of the individual’ under the GDPR). Presumably it will be the organization that does this initial calculation. One of the problems in data protection law has been quantifying adverse effects on individuals. Data breaches, for example, are shocking and distressing to those impacted, but it is often difficult to show actual damages flowing from the breach, and moral damages have been considerably restricted by courts in many cases. Some courts have even found that ordinary stress and inconvenience of a data breach is not compensable harm since it has become such a routine part of life. If ‘adverse effects’ on individuals are reduced to quantifiable effects, the ‘legitimate interests’ exception will be far too broad.

This is not to say that the ‘legitimate interests’ provision in Bill C-27 is incapable of facilitating data use while at the same time protecting individuals. There is clearly an attempt to incorporate some checks and balances, such as reasonable expectations and a requirement to identify and mitigate any adverse effects. But what C-27 does is take something that, in the GDPR, was meant to be quite exceptional to consent and make it potentially a more mainstream basis for the use of personal data without knowledge or consent. It is able to do this because rather than reinforce the centrality and importance of privacy rights, it places privacy on an uneasy par with commercial interests in using personal data. The focus on ‘adverse effects’ runs the risk of equating privacy harm with quantifiable harm, thus trivializing the human and social value of privacy.

 

 

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