Category Archives: Technology

Québec Court Rejects Privacy-related Class Action Filed After Loss of Laptop

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The Québec Superior Court recently rendered judgment in the matter of Lamoureux c. Organisme canadien de réglementation du commerce des valeurs mobilières (2021 QCCS 1093), further to a class action resulting from the loss of a portable computer containing personal information.

Contrary to what often happens with such class actions, this one did make it through the whole process, up to and including an actual judgment on the merits of the case. In the end, the Québec Superior Court rejects the claims, including those for ordinary damages as well as the claim for punitive damages. In doing so, however, the court does provide us with some principles that seem worth remembering.

This case stems from the loss of a portable computer by an employee of the defendant, a non-encrypted device which contained sensitive information about certain individuals. Even though these individuals may have worried and have been somewhat anxious at the thought of having their identities stolen, the court held that this was, in and of itself, insufficient to qualify as a real prejudice at law. As often happens is such cases, the judge found that more was required before the legal system would be required to intervene, including by awarding monetary compensation.

The class representative in this case was also alleging that certain attempts had been made to steal his identity, something more likely to deserve redress by the court. However, the plaintiff was unable to demonstrate causation between the fault of the defendant (in handling his data and the incident at issue) and such attempted identity theft. Given this absence of a causal link between the fault and the alleged damages, the court also rejected this portion of the claim.

Interestingly enough, this case provides us with a good example of the steps taken by an organization faced with a loss of data and which the court validates as appropriate under the circumstances. The defendant organization here performed an adequate inquiry, hired a specialized consultant, notified the privacy authorities, and notified potential victims. The organization also paid for credit-report surveillance services for these individuals, all of which lead the Superior Court judge to also reject this final claim (for punitive damages), given that the steps taken were adequate under the circumstances.

Canadian Government Angling to Control Content Placed Online, including UGC and Even Apps

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As you may recall, since last fall, the Canadian government has been working toward getting its bill C-10 enacted. The bill aims to allow taxing streaming services such as Netflix. Though this may have been the initial impetus behind the introduction of the bill, we’re now seeing that C-10 may also go so far as to allow the regulation of content placed online, including user-generated content, computer games and apps of all kinds. Yes, Canada seems to have decided to shed its laissez-faire attitude toward what’s placed on the Internet.

Indeed, it would now seem that the Liberal government may be trying to broaden bill C-10 so as to grant the CRTC additional powers to regulate whatever is placed online, including (the latest twist in this little legislative soap opera), apps—yes, you read this right: apps. This story is being disseminated by Michael Geist, further to a statement seemingly made by mistake by an MP while commenting on an amendment that has yet to be formally introduced. Apparently, the government may be in the process of making changes to C-10 that would allow the CRTC to regulate not only streaming services, but also some content itself, such as apps made available on the Internet.

Though the government stated it did not intend to try and regulate computer games, it now appears C-10 may, on the contrary, end up allowing the CRTC to regulate software made available through the Internet, a prospect that has many cringing.

From a bill initially justified as a way to simply allow the taxation of streaming services (such as Netflix) in Canada (to level the playing field vs. other ways of making content available to Canadians), we’re now faced with a bill that seems to be transmogrifying into a bill meant to empower the government (through the CRTC) to control what is placed or made available by and to Canadians online. This may end up being extended and/or applied to computer games, content placed on social networks, blog posts, podcasts, etc. Hmm, so much for the CRTC’s 2000 position that it wouldn’t mess with the Internet.

Is it just me or are we faced with a slight drift in the federal government’s recent efforts to try and better control the Internet in Canada? Hmmm—to be continued, unfortunately.

Canada Opts for New Digital Services Tax

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The media is reporting that Canada’s 2021 budget which was recently made public includes the idea of implementing a digital services tax (“DST”) that will be imposed on foreign businesses providing digital services to Canadians. This tax will, of course, apply to companies and services such as Netflix, Spotify and Amazon Prime, but also to other businesses that generate revenues through matching sellers with buyers online, dealing with user-generated content, advertisements through online platforms, and selling or licensing user data.

The rate of this new tax would be set at 3% of the income these businesses generate from digital services provided to Canadians. This, the Canadian government believes, will allow Canada to obtain its fair share of the revenues being generated from streaming and online services, which are often provided to Canadians by foreign (usually American) companies.

This new tax will come into effect on January 1, 2022, and is expected to bring in about 500 million dollars per year for the Canadian government. With figures like these, one has to admit it may be hard to resist for a country like Canada.