Canada: ETHI Committee Prepares For GDPR Adequacy Assessment In New Report On PIPEDA

Preparations for the upcoming entry into force of the European General Data Protection Regulation ("GDPR") are underway in Canada's House of Commons. On February 28, 2018, the Standing Committee on Access to Information, Privacy and Ethics ("ETHI" or "Committee") presented its report on the review of the Personal Information Protection and Electronic Documents Act ("PIPEDA"), entitled "Towards Privacy by Design" to the House of Commons.

As its name indicates, this report recommends that the review of PIPEDA by the Government of Canada be guided by the concept of "privacy by design," which is the idea that privacy considerations should be taken into account at all stages of the development of a product. Accordingly, the Committee put forward numerous suggestions aimed at reinforcing PIPEDA, with a clearly stated goal of ensuring that it will be considered adequate by the European Union in the context of the coming into force of the GDPR in May.

The ETHI made 19 recommendations to potentially update the protection of personal information framework in Canada. This bulletin will focus on the most important recommendations for organizations doing business in Canada, which are as follows:

  • Moving towards an opt-in consent as the default for uses of personal information for secondary purposes;
  • Considering amending PIPEDA to clarify situations where personal information can be used to satisfy legitimate business interests;
  • Examining the best ways to protect depersonalized data;
  • Recognizing a right to erasure and a right to de-indexing, at a minimum for minors;
  • Giving the Office of the Privacy Commissioner of Canada ("OPC") stronger enforcement powers, including the power to make orders and impose fines for non-compliance, as well as broad audit powers, including the ability to choose which complaints to investigate.

Meaningful Consent

The ETHI noted that consent is the cornerstone of PIPEDA. However, the OPC testified that recent innovations have added significant complexity to online interactions and have resulted in more ways to use personal information, a statement affirmed by comments from many witnesses indicating that it has become impossible for individuals to take the time needed to properly inform themselves of the conditions of use for each service and provide informed consent. The ETHI nonetheless expressed its view that consent must stay at the core of PIPEDA's privacy protection model, as it respects individuals' autonomy in deciding what to do with their personal information, although it must be enhanced by a greater reliance on express consent (also known as "opt-in consent") rather than implied consent.

Opt-in Consent as the Default for Using Personal Information for Secondary Purposes

The ETHI heard witnesses argue that opt-in consent should be implemented as the default model, which means that users would explicitly choose to disclose their personal information. Others had reservations about the practical implications of such a system and one witness suggested making a distinction between using personal information for the purpose of providing the service requested by the users and using it for secondary purposes, such as marketing. In this last case, this witness argued that an opt-out option should be clearly and readily available to the individual. This is aligned with the view previously articulated by the OPC in PIPEDA Case Summary #2003-203, which states that the following criteria must be met in order for an organization to be able to rely on an on opt-out consent when using personal information for secondary purposes:

  1. The personal information must be demonstrably non-sensitive in nature and context.
  2. The information-sharing situation must be limited and well defined as to the nature of the personal information to be used or disclosed and the extent of the intended use or disclosure.
  3. The organization's purposes must be limited and well defined, stated in a reasonably clear and understandable manner, and brought to the individual's attention at the time the personal information is collected.
  4. The organization must establish a convenient procedure for easily, inexpensively, and immediately opting out of, or withdrawing consent to, secondary purposes and must notify the individual of the procedure at the time the personal information is collected.1

The ETHI has recommended that PIPEDA be amended to provide for opt-in consent as the default for using personal information for these secondary purposes, "with a view to implementing a default opt-in system regardless of purpose", thereby reopening the issue of the type of consent which must be obtained for using personal information for secondary purposes.

Improving Algorithmic Transparency Privacy

The ETHI heard witnesses highlight the risk posed by algorithms processing large amount of personal information and this data being used to make potentially discriminatory decisions about individuals (for instance, in artificial intelligence applications). Articulating the view that organizations should be more transparent about the use of algorithms to process personal information, the ETHI recommended that the government consider implementing measures to improve algorithmic transparency.

Review the Definition of "Publicly Available Information"

PIPEDA excludes from its scope certain categories of publicly available information specified by regulations. The ETHI recognized that the list specified in the current regulations is obsolete, as it refers to mediums like phone books, and that it should be technology neutral. The ETHI therefore recommended that the government review the definition of "publicly available information" and consider taking into account situations in which individuals post personal information on a public website. While it is unclear if the intent is to completely exclude this type of information from the scope of PIPEDA, this position is probably meant to ensure that the fact that this type of data that is readily available is at least considered when determining the type of protection this type of data actually warrants.

Clarifying When Personal Information Can Be Used for "Legitimate Business Interests"

Under the European model, businesses may collect, use and disclose personal information without consent for their legitimate business interests. Some witnesses before the ETHI suggested that PIPEDA should operate in a similar manner to address situations where obtaining consent is difficult, such as for search engines results, in the context of big data and when new possibilities for use arise after the initial collection of the data. The OPC testified against this idea on the basis that such an exception would be too broad and therefore could therefore lead to abuse by organizations.

The ETHI, while noting concerns regarding the implementation of a new exception, recommended that the government consider amending PIPEDA to at least clarify situations where personal information can be used to satisfy legitimate business interests. We note that the inclusion of an exception in that sense in PIPEDA could potentially compensate for the more stringent opt-in consent model for secondary purposes, if secondary purposes were to be considered legitimate business interests.

Protecting Depersonalized Data

The legal treatment of depersonalized data (usually referred to as "anonymized" or "de-identified" data) is an important issue for businesses and individuals in the era of big data and artificial intelligence, where data does not always have to identify an individual to be of value to businesses. The ETHI noted that some witnesses believed that depersonalized data should not be considered "personal information," while others were of the view that they should be exempted from the consent requirement. The OPC has recently recommended in its 2017 "Report on Consent" that Parliament examine this issue as de-identified data may provide the "flexibility needed to achieve a better balance between privacy protection and economic value of data."

The ETHI was not ready to recommend an exception to the consent requirement for depersonalized data and simply recommended that the government examine the best ways to protect such data, for instance from risks of re-identification, thus addressing a concern that was raised by the OPC in its 2017 report, when it noted that "re-identification is a real risk not only because of the availability of data sets that can be used to re-identify personal information, but also because of the lack of rigour in de-identification methods."

Data Portability Should be Explicitly Recognized in PIPEDA

The GDPR provides individuals the right to "data portability," which is the right to receive the personal information individuals have provided to an organization, in a common and machine-readable format, so that the individual can easily transmit this data to another organization. The ETHI noted that such right means that service provides must ensure that their processes for collecting and storing personal information are compatible with that of their competitors and recommended that PIPEDA explicitly recognize this right.

Online Reputation and Right to Be Forgotten

Last month, the OPC issued its "Draft Position on Online Reputation," which we discussed in a previous bulletin and where it essentially stated that PIPEDA already contains protection akin to the European right to be forgotten (or "right to erasure," as it is named in the GDPR). In its new report, the ETHI covered this subject in great detail. In its opinion, the right to be forgotten refers to two concepts: the right to erasure and the right to de-indexing (or "dereferencing" or "delisting").

Recognizing the Right to Erasure (at a Minimum for Minors)

According to the ETHI, the right to erasure is the right to have information removed from a website. It noted that PIPEDA contains very limited provisions regarding the deletion, correction or accuracy of personal information. When they have self-provided the information, individuals should be able to withdraw their consent and have their information deleted (except in certain situations, such as when there are contractual provisions to the contrary). Citing the testimony of Privacy Commissioner of Canada Daniel Therrien, the ETHI stated that individuals should have an absolute right to have information they posted on social media removed.

According to the ETHI, when information about an individual (e.g. a photo posted on social media by a friend of the individual) has been provided to an organization by someone else, the situation is more complex. In such a situation, the ETHI indicated that the right under PIPEDA to have organizations correct inaccurate, incomplete or out-of-date information, as well as the notion that organizations may only collect, use or disclose personal information for reasonable purposes should find application. That said, according to the ETHI, these principles do not provide for a comprehensive regime and do not allow for redress in cases where factual yet potentially harmful information is posted online, such as embarrassing acts or photos, which could have serious consequences for those affected, especially minors.

The ETHI therefore concluded that while a right to erasure is not a concept that is foreign to PIPEDA, a more robust regime should be included in the statute and that as a general principle individuals should be entitled to have their personal information removed from online sources when they end a business relationship with an organization.

The ETHI also heard witnesses discuss the risks of a right to erasure with respect to the right of freedom of expression and the public interest, and therefore expressed the view that a right to erasure would have to be carefully framed to strike an appropriate balance between freedom of expression and protection of privacy. The ETHI concluded by recommending that the government consider amending PIPEDA to include a framework for a right to erasure based on the GDPR model that would, at a minimum, include a right for young people to have information posted online either by themselves or through an organization taken down.

Recognizing a Right to De-Indexing (at a Minimum for Minors)

Unlike the right to erasure, the right to de-indexing does not involve deleting the information in question, but rather ensuring that the results no longer appear in search engines results. The ETHI noted that Canada does not have an explicit de-indexing regime like the EU, where the right to de-indexing was established in a 2014 decision by the Court of Justice of the European Union, which found that it existed under the directive that is soon to be replaced by the GDPR.

In the OPC "Draft Position on Online Reputation" mentioned above, the OPC argued that under PIPEDA, search engines would be required to remove links in certain circumstances, but when testifying in front of the ETHI, Commissioner Therrien recognized that this position has its critics and that it would be worth clarifying PIPEDA in this respect.

The ETHI noted that the most important concern with respect to de-indexing relates to having a private organization (such as Google) receiving requests and making the decision of whether to de-index content.

Despite critics of de-indexing, the ETHI concluded that implementing a legal framework allowing individuals to request, in specified circumstances, the de-indexing of harmful personal information is a good way of protecting Canadian's reputation and privacy. The public interest and freedom of expression would be protected by implementing a framework providing for a rigorous and transparent decision-making process. The ETHI therefore recommended that the government consider including a framework on the right to de-indexing in PIPEDA, and that the right be expressly recognized in the case of personal information posted online by minors.

Stronger Enforcement Powers for the OPC

In its 2017 Report on Consent which we discussed in a previous bulletin, the OPC asked for a change to the current ombudsman model and requested stronger enforcement powers. The ETHI heard many witnesses on both sides of the issue, some arguing for more powers to the OPC while others favouring the status quo. The ETHI sided with the parties asking for stronger powers and a departure from the ombudsman model, recommending using the United Kingdom system as a model. In the end, the ETHI recommended that PIPEDA be amended to give the OPC stronger enforcement powers, such as:

  • The power to make orders and impose fines for non-compliance; and
  • Broad audit powers, including the ability to choose which complaints to investigate.

Adequacy of PIPEDA Under the GDPR

Under the GDPR, organizations in the European Union are prohibited from transferring personal data to any non-member state whose laws do not adequately protect this data. The EU will therefore have to assess the adequacy of PIPEDA under the GDPR. Commissioner Therrien testified before the ETHI that the GDPR contains rights and provisions that do not appear in PIPEDA, such as the right to data portability and data erasure and the concept of privacy by design. The GDPR also contains rigorous enforcement measures, including fines which may amount to the higher of €20 million or 4 per cent of the organization's total worldwide annual turnover for the preceding fiscal year, which is not the case for PIPEDA.

In this context, the ETHI made the following recommendations:

  • That the government work with its European Union counterparts to determine what would constitute adequacy status for PIPEDA in the context of the new GDPR;
  • That the government determine what changes to PIPEDA, if any, will be required in order to maintain its adequacy status under the GDPR;
  • That if it is determined that the changes required to maintain adequacy status are not in the Canadian interest, the government create mechanisms to allow for the seamless transfer of data between Canada and the European Union;
  • That the government work with the provinces and territories to make sure that all relevant jurisdictions are aware of the requirements for adequacy status to be granted by the EU.

Conclusion and Business Takeaways

This new report gives a preview of what the upcoming amendments to PIPEDA could look like. In some cases, these amendments may be inspired by the upcoming new European privacy protection framework, especially in light of the Commissioner Therrien's statement before the ETHI that reassessing PIPEDA's adequacy status "is a pressing issue with possible far-ranging implications for Canada's trade relationship with the EU."

Organizations doing business in Canada should therefore start to prepare to the possibility of a more stringent regime, including stricter consent rules (particularly around the use of personal information for secondary purposes); having to comply with new requirements and individuals' rights, such as the right of portability and the right to erasure; as well as ensuring that they are compliant to avoid punitive fines, in light of the fact that Canada is currently considering a potential shift from an ombudsman model to a regulator with the power to impose administrative fines. The ETHI did not take a strong stance on the issues of de-identification and processing for legitimate business interests, so perhaps the final review of PIPEDA will provide more details in these areas.

Footnote

1. PIPEDA Case Summary #2003-203, "Individual raises concerns about consent clauses on credit card application form," Office of the Privacy Commissioner of Canada, May 2003.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions