SCC sets Canadian jurisdiction in Facebook privacy case

OTTAWA — Canada’s Supreme Court has ruled that British Columbia has jurisdiction over a privacy case involving Facebook Inc.’s sponsored stories, a decision that experts say could have wider implications for online contracts between consumers and large companies. Independent Internet lawyer Allen Mendelsohn said “this really throws into question a lot of things about online contracts” and means we could see more such lawsuits in Canadian courts. “Bring on the class-action lawsuits against Facebook, against Google, against any giant corporation with a lot of money where someone was forced to accept the terms and conditions without any power whatsoever. That’s the price we’re going to pay, I think, for this decision,” he predicted in a phone interview. “It’s a big one,” he said. The Supreme Court was considering a case Deborah Douez brought against Facebook in British Columbia over the company’s use of her name and picture in one of its “sponsored stories” without her consent. She argued that using her name and likeness without her agreement for advertising violated B.C.’s Privacy Act, the court decision outlined. She also asked for the case to be certified as a class action, involving all B.C. residents who had their name and picture used in sponsored stories, a total of an estimated 1.8 million people. The provincial Privacy Act stipulates that actions involving the legislation be heard in B.C.’s Supreme Court, but Facebook’s terms of use include a clause that requires disputes be heard in California. While a B.C. judge initially certified the class action, the British Columbia Court of Appeal disagreed, ruling that Facebook’s clause was enforceable. On Friday, the Supreme Court of Canada said that when it comes to interpreting the validity of forum selection clauses, “courts should take account of all the circumstances of the particular case, including public policy considerations relating to the gross inequality of bargaining power between the parties and nature of the rights at stake.” The decision said that in this case, there was such a gross inequality between the two parties. “Individual consumers in this context are faced with little choice but to accept Facebook’s terms of use. Additionally, Canadian courts have a greater interest in adjudicating cases impinging on constitutional and quasi-constitutional rights because these rights play an essential role in a free and democratic society and embody key Canadian values,” the decision said. It added that “only a local court’s interpretation of privacy rights under the Privacy Act will provide clarity and certainty about the scope of the rights to others in the province.” The judges also noted the “expense and inconvenience of requiring British Columbian individuals to litigate in California, compared to the comparative expense and inconvenience to Facebook,” where Douez would have to travel to California while Facebook would need to have its books and records made available for inspection in B.C. It said that when “online consumer contracts of adhesion contain terms that unduly impede the ability of consumers to vindicate their rights in domestic courts, particularly their quasi-constitutional or constitutional rights, public policy concerns outweigh those favouring enforceability of a forum selection clause.” The court was split on the issue, with three members of the seven-person court disagreeing with the majority decision. In a blog post, law professor Michael Geist said that the court “demonstrated their discomfort with non-negotiated online terms that place consumers at a significant disadvantage and may result in a loss of rights,” and that the reasoning behind their decision could also be applied to other terms of online contracts that “seek to override important laws and protections.” That could include terms in contracts that “seek to override copyright user rights or local consumer safeguards,” he said. “The decision will undoubtedly have a significant impact on online contracting in Canada, forcing many online companies to reconsider whether their agreements are fully enforceable and emboldening consumers to stand up for their rights.” Mendelsohn noted that “companies count on a choice of forum and choice of law clause, and if a lot of those get thrown out now, or are held to be unenforceable, that becomes quite problematic for the company.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Charelle Evelyn at cevelyn@thewirereport.ca

SCC sets Canadian jurisdiction in Facebook privacy case

Broadcast | June 23, 2017

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SCC sets Canadian jurisdiction in Facebook privacy case

Broadcast | June 23, 2017

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