Canada: After Equifax: Canadian Business And GDPR-Era Privacy Regulation

Around 19,000 Canadians were among the over 143 million individuals whose personal information was compromised in the 2017 Equifax privacy breach.

How did Canadian regulators respond to this large and high-profile breach? The Office of the Privacy Commissioner of Canada (OPC) released a report detailing its investigation into Equifax, finding that the credit agency had failed to meet its privacy obligations. The report also marks a significant change in the OPC’s position on privacy requirements for Canadian companies with domestic or international practices. It’s a move that could not only align Canadian privacy regulation closer to the regulatory framework set out in Europe’s GDPR, but render Canada's regime more unfriendly to business transfers of data.

OPC investigation

The OPC determined that the affected personal information of Canadians was collected by Equifax Inc. from Canadian consumers who purchased or received direct-to-consumer products or fraud alerts from Equifax Canada. Equifax Canada’s security infrastructure was highly integrated with that of Equifax Inc.

The investigation was broad: the OPC looked at the adequacy of safeguards by Equifax Inc. and Equifax Canada, whether Equifax Canada had adequate accountability for Canadian data processed by Equifax Inc., whether Equifax Canada had obtained valid consent for this processing, and the companies’ data destruction practices. The report concluded that both Equifax Inc. and Equifax Canada contravened PIPEDA in a number of respects and recommended improvements.

Importantly, the OPC found the transfer of data from Equifax Canada to Equifax Inc. to be inconsistent with the organizations’ obligation to obtain meaningful consent from individuals before disclosing their personal information to a third party. For consent to be valid, individuals must be given clear information about the disclosure, including when the third party is located in another country, and the associated risks.

Data handling

The OPC’s evolving position on data transfers shows it is interpreting Canada’s privacy law in a manner consistent with Europe’s privacy rules, despite no legislative amendments having been proposed to formally align Personal Information Protection and Electronic Documents Act (PIPEDA) with General Data Protection Regulation (GDPR).

The findings of the report will have a number of impacts on companies. It means companies now must obtain meaningful consent to disclose personal information to third parties. This includes clearly explaining the nature and purpose of the transfer, whether the recipient processor is located outside Canada, and any alternatives that would allow the customer to continue receiving services without transferring data internationally.

This doesn’t mean cross-border data transfers are necessarily prohibited. Rather, depending on the sensitivity of the information, the transparency of the transfer outside Canada, and the availability of domestic alternatives, companies may need to provide a higher level of disclosure to obtain valid consent.

There is now also a regulatory expectation that data transfers among corporate affiliates should be treated like third-party disclosures. Most significantly, this may involve more detailed data processing agreements that impose rigorous privacy and security obligations on the recipient organization—even when the entities are related and subject to comparable internal policies.

Cross-border transfers

While the OPC’s decision focused on the transfer of data from Canada to the United States, it will affect all cross-border transfers of information, whether to third parties or within the corporate organizational structure.

Organizations that process personal information about individuals in Canada in other countries have long been advised to include a notice of this practice in their privacy policies, and a statement that the privacy laws in those jurisdictions may differ from those in Canada. This decision indicates the standard will now be higher to obtain meaningful consent to process or store personal data outside Canada.

The existence of a cross-border transfer of information will be a factor the OPC now considers in assessing the validity of consent for the company’s handling of the personal information. This is because individuals may not reasonably expect their information to be transferred to another country to provide services they have purchased from a Canadian company. Where the information is sensitive, individuals may also have heightened concerns about the transfer and storage of their personal information in particular countries, such as the United States. Accordingly, organizations should ensure that cross-border transfers of data, risks associated with the transfer, and alternatives to such transfers are clearly communicated to individuals so they can provide valid consent.

This change in position on part of the OPC may have a significant impact on Canadian businesses’ data practices. Recognizing this, the OPC has launched a formal consultation process before issuing revised guidance on cross-border data transfers.

Intercompany transfers

Beyond cross-border issues, the OPC’s revised position will also impact companies’ domestic transfers of personal information for processing purposes. Although transfers of information to vendors (such as payment processors or marketing agencies) will be treated as disclosures rather than uses, the impact may be more significant in relation to intercompany transfers. A transfer of personal information to a corporate affiliate for processing purposes, for example, may have been less stringently documented than vendor arrangements under the previous view that this constitutes an internal use of data.

Even where all affiliates are located in Canada, where the services to be provided by a company will require data processing by a different legal entity, this transfer will be a factor in assessing the level of disclosure and consent required.

The OPC’s focus on intercompany transfers suggests another step toward interpreting PIPEDA in line with the GDPR. In particular, we may see data processing agreements reminiscent of EU standard contractual clauses become more routinely used for transfers between Canadian corporate affiliates in order to document the privacy and security obligations of the counterparties.

Canadian businesses will know more as the OPC releases more information about their evolving approach to interpreting Canadian privacy legislation; whether we will continue to see the influence of the GDPR reflected in our own regulatory framework remains to be seen. The OPC’s response to Equifax is one more reminder to Canadian businesses of how increasingly critical it is to develop, maintain and evolve privacy (and privacy breach) practices that are not only sound in regulatory compliance, but that are capable of being agile and responsive to changes from regulators or in best practices.

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
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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