So Bill c-27, also known as the digital charter implementation act of 2022 has been before Canada's Parliament for consideration for quite some time. Even before this parliamentary session, a bill substantially similar to the present one was tabled and then died on the order paper in the previous parliamentary session. After more than 20 years of the personal information protection electronic documents act, people have had a long time to think about improvements that perhaps could or should be made to our national privacy regime .
One thing that I've heard over and over again, particularly from privacy activists since 2018 is the suggestion that Canada should simply follow Europe's lead and implement a form of its general data protection directive. Privacy activists and others hail it as the “gold standard”.
Sometimes when I hear more from these folks, I realize that for some of them, it appears that all they know about the GDPR is the possibility of massive, company-ruining penalties. What they don't seem to understand is that it is relatively rare in Europe for a business to use consent as the basis for the collection, use or disclosure of personal information. This is in stark contrast to the current law, PIPEDA, where consent really is the only lawful basis for collecting, using and disclosing personal information.
Here is a case in point. It is an op-ed to the globe and mail written by the former co-CEO of research in motion, also known as blackberry, and more recently, the philanthropist behind Canada center for digital rights and the Centre for International Governance Innovation, Jim Balsillie.
In this op-ed, Balsillie “the EU's landmark general data protection regulation, a law that sets the baseline for modern protections around the world…”
He then goes on to viciously attack a portion of Bill c27 in the CPPA that is modeled directly on a provision from the GDPR: The ability for an organization to collect, use or disclose personal information without consent on the basis of legitimate interests .
Here is what Jim has to say in his op-ed. “ For example, the proposed new law creates a broad car vote for surveillance without knowledge or consent based on legitimate interests… there's worse, it's the businesses themselves that determine what constitutes legitimate interest for surveillance and they are under no obligation to tell the individual they are tracking and profiling them”
Look, either it is the gold standard or it is not.
And I really shouldn't have to tell a business leader that every one of us gets to decide how we comply with the law and if that assessment is incorrect, that is where enforcement comes in. The bill contains detailed information about what can be a legitimate interest in what cannot be a legitimate interest. Frankly, I am getting a little tired of this breathless hyperbole and want to set the record straight on what legitimate interests is and what it is not.
First, we'll look at the GDPR, then we will look at Bill c27.
Article 6 of the GDPR outlines the lawful bases for processing personal data. These include consent, contract, legal obligation, vital interests, public task, and legitimate interests. We’re going to zoom in on the last one – legitimate interests.
Legitimate interests are one of the more flexible lawful bases and probably the most-used. It is also the most open to interpretation. It allows data processing on the basis of the legitimate interests pursued by a data controller or a third party, unless such interests are overridden by the interests or fundamental rights and freedoms of the data subject.
This requires the data controller to carry out an analysis to see if “legitimate interests” can be used instead of another basis, such as consent.
To rely on legitimate interests, you must:
1. Identify a legitimate interest (be it commercial, individual, or societal benefits).
2. Show that the processing is necessary to achieve it.
3. Balance it against the individual’s interests, rights, and freedoms. This involves conducting a Legitimate Interests Assessment (LIA).
Legitimate interests can include network and information security, preventing fraud, direct marketing, and the like.
Using “legitimate interests” is not just carte blanche to do whatever you want. When invoking legitimate interests, the controller has to ensure transparency, adhere to data minimization principles, and implement safeguards to protect the rights of individuals.
The proposed Consumer Privacy Protection Act in Canada has a similar framework. Personally, I think it should be replaced with an almost word for word copy from the GDPR in order to remove – or at least reduce – unnecessary barriers for organizations that operate internationally.
But let's focus on what is in fact written in the bill as it currently exists.
In section 18(3), it says an organization may collect or use an individual's personal information without their knowledge or consent if the collection of 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 reasonable person would expect the collection of use for such an activity. And the personal information is not collected or used for the purpose of influencing the individual’s behavior or decisions.
So like in Europe, it requires balancing that organization's interest against the interest of the individual. Unlike in Europe, it requires that the collection or use be for purposes that would essentially be obvious or expected by the individual. It is unclear what is the intended scope of that paragraph (b) there, since there are so many things that happen in the world that would reasonably be expected to alter somebody's behavior.
Subsection (4) sets a requirement that must be met prior to an organization relying on this legitimate interest for the collection or use of personal information. It says prior to collecting using personal information under subsection (3), the organization must identify any potential adverse effect on the individual that is likely to result from the collection or use, then identify and take reasonable measures to reduce the likelihood that the effects will occur or to mitigate or eliminate them, and comply with any prescribed requirements. That means that additional requirements could be set out in regulations to come.
Then it says in subsection (5) that the organization must record its assessment of how it meets the condition set out in subsection (4) and must, on request, provide a copy of the assessment to the Privacy Commissioner.
This doesn't, to me, sound like a completely arbitrary mechanism where organizations get to draw the line wherever they want. They have to document that decision-making and have to make it available to the privacy commissioner on request.
But that is not the end of it. Section 62 talks about what an organization has to include in its privacy statement to the public, and this says that they have to provide a general account of how the organization uses the personal information and how it applies the exceptions to the requirement to obtain an individual consent under this act, including a description of any activities referred to in subsection 18(3) in which it has a legitimate interest.
So this means that every organization that determines that it is appropriate to use legitimate interests for the collection or use of personal information has to document their decision making in a defensible manner, knowing that it could be presented to the Privacy Commissioner. And they don't get to do it sneakily as the breathless critics would have you think, because they have to publish it in black and white, plain language in their public facing privacy statement.
In addition to the legitimate interests basis for the collection or use of personal information, the proposed CPPA also includes certain categories of business activities for which personal information can be collected or used without an individual's knowledge or consent. This is in section 18, sub 1.
This says 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 a business activity described in subsection (2). And a reasonable person would expect the collection or use for such an activity. And the personal information is not collected to use for the purpose of influencing the individual’s behavior or decisions. Does that sound familiar? This is a similar framework to what is in 18 sub 3.
This provision sets out what are the permissible business activities that fit within this exception. The first one is an activity that is necessary to provide a product or service that the individual has requested from the organization. It has to be necessary. Or it can be an activity that is necessary for the organization's information, system or network security. Or an activity that is necessary for the safety of a product or service that the organization provides. Or any other prescribed activity that could be set out in future regulations.
While I would like Canada’s version of “legitimate interests” to more closely parallel the one in the European General Data Protection Regulation, I think it is a completely reasonable addition to Canada’s privacy law. It requires a deliberate analysis and determination of whether it can be used and requires the organization to be transparent with its customers about the practice.
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