A Facebook privacy case that could change the way Canadian law looks at how we provide consent online, and whether internet companies based elsewhere can be sued in Canada made its way to the Supreme Court last week.
The key issue is whether a class-action lawsuit against Facebook can be heard in B.C., where the case was filed. The terms of use people agree to when they use Facebook say any lawsuit against the company must be filed where it’s headquartered, in California.
“Anytime you make a contract with another province or another country, the contract will normally be drafted so as to say that the laws of this place or that place applies, and that’s because you need to make a choice as to whose laws apply, otherwise there’s chaos,” said Andrew Roman, a class action legal expert in Ontario. “A company like Facebook, because it’s on the internet, has no specific geographic location and would want all the cases against it in its own state, so that it doesn’t have to hire lawyers all over the world.”
Forum selection clauses in contracts, like the one in Facebook’s terms of use, have in the past been encouraged by courts, as they’re more convenient in our globalized world. Whether that remains the same in the digital world is part of what’s at stake.
The case dates back to 2011, when Facebook launched its “Sponsored Stories” advertising service. Advertisers would pay to feature a user’s name and photo next to their product or service. Those Sponsored Stories would be sent to the users’ friends, completely unknown to the person whose photo appears in the ad. That way, it would appear to the person’s contacts they liked a product, as though it were an endorsement. Facebook dropped the Sponsored Stories program in early 2014.
Deborah Douez, a Vancouver videographer, launched the lawsuit on behalf of other British Columbians who she claimed had their privacy violated by this practice. In 2014, the B.C. Supreme Court decided that Douez should be able to sue in B.C. as opposed to California, lest it weaken the province’s Privacy Act, and certified the case to proceed. The B.C. Court of Appeal overturned that decision the following year.
“The case obviously deals with online jurisdiction but also online consumer protection and privacy,” said Karen Eltis, a law professor at the University of Ottawa who specializes in privacy and internet law. “It goes to the heart of something that’s been gnawing at us for years, which is the meaning of consent in the digital age.”
Roman, meanwhile, suspects that the Supreme Court agreed to hear the case in order to support the Court of Appeal decision, and provide guidance to other courts across Canada that the forum selection clauses in terms of use like Facebook’s should be upheld.
Eltis is not so sure that’s the case.
“Very often online, we increasingly notice that true consent has lost its meaning to a significant degree,” Eltis said. “If we want to avail ourselves of these free services, for all intents and purposes, that have come to shape our daily existence, then we really have no other choice to but consent.”
To Eltis, that defies the traditional meaning of consent, and the case gives the Supreme Court the opportunity to review take-it-or-leave-it forum selection clauses. Eltis says that one of the key reasons of why the notion is changing is because of privacy is given a different legal weight in Canada and the U.S.
“In the United States more generally, you need a financial aspect to privacy harm in order to recover [damages],” said Eltis. “It’s a much more stringent understanding. In Canada we’re hybrid with regard to privacy — we stand somewhere between the United States and Europe. And in many cases, the Supreme Court has recognized that privacy harm in the digital age does not have to be of a financial nature. That is a significant departure.”
The conflict in forum selection clauses becomes apparent if a case must be heard in a jurisdiction where a different value on privacy is held. The Canadian Civil Liberties Association, intervening in the case, argued there needs to be a new test on the enforcement of forum selection clauses for the protection of constitutional and quasi-constitutional rights such as privacy. The CCLA said the previous test predates the creation of Facebook or social media in general.
“This case provides an opportunity to provide guidance to lower courts and the business community,” argued CCLA lawyer Cynthia Kuehl.
Douez’s lawyer, Christopher Rhone, stated that if the case were applied under California law that it wouldn’t succeed.
The Court reserved judgment, meaning a verdict could be months away.
