Teresa Scassa - Blog

Tuesday, 24 September 2019 07:19

Tussle over scraped corporate registry data exposes tensions between transparency and privacy

Written by  Teresa Scassa
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An interesting case from Quebec demonstrates the tension between privacy and transparency when it comes to public registers that include personal information. It also raises issues around ownership and control of data, including the measures used to prevent data scraping. The way the litigation was framed means that not all of these questions are answered in the decision, leaving some lingering public policy questions.

Quebec’s Enterprise Registrar oversees a registry, in the form of a database, of all businesses in Quebec, including corporations, sole corporations and partnerships. The Registrar is empowered to do so under the Act respecting the legal publicity of enterprises (ALPE), which also establishes the database. The Registrar is obliged to make this register publicly accessible, including remotely by technological means, and basic use of the database is free of charge.

The applicant in this case is OpenCorporates, a U.K.-based organization dedicated to ensuring total corporate transparency. According to its website, OpenCorporates has created and maintains “the largest open database of companies in the world”. It currently has data on companies located in over 130 jurisdictions. Most of this data is drawn from reliable public registries. In addition to providing a free, searchable public resource, OpenCorporates also sells structured data to financial institutions, government agencies, journalists and other businesses. The money raised from these sales finances its operations.

OpenCorporates gathers its data using a variety of means. In 2012, it began to scrape data from Quebec’s Enterprise Register. Data scraping involves the use of ‘bots’ to visit and automatically harvest data from targeted web pages. It is a common data-harvesting practice, widely used by journalists, civil society actors and researchers, as well as companies large and small. As common as it may be, it is not always welcome, and there has been litigation in Canada and around the world about the legality of data scraping practices, chiefly in contexts where the defendant is attempting to commercialize data scraped from a business rival.

In 2016 the Registrar changed the terms of service for the Enterprise Register. These changes essentially prohibited web scraping activities, as well as the commercialization of data extracted from the site. The new terms also prohibit certain types of information analyses; for example, they bar searches for data according to the name and address of a particular person. All visitors to the site must agree to the Terms of Service. The Registrar also introduced technological measures to make it more difficult for bots to scrape its data.

Opencorporates Ltd. C. Registraire des entreprises du Québec is not a challenge to the Register’s new, restrictive terms and conditions. Instead, because the Registrar also sent OpenCorporates a cease and desist letter demanding that it stop using the data it had collected prior to the change in Terms of Service, OpenCorporates sought a declaration from the Quebec Superior Court that it was entitled to continue to use this earlier data.

The Registrar acknowledged that nothing in the ALPE authorizes it to control uses made of any data obtained from its site. Further, until it posted the new terms and conditions for the site, nothing limited what users could do with the data. The Registrar argued that it had the right to control the pre-2016 data because of the purpose of the Register. It argued that the ALPE established the Register as the sole source of public data on Quebec businesses, and that the database was designed to protect the personal information that it contained (i.e. the names and addresses of directors of corporations). For example, it does not permit extensive searches by name or address. OpenCorporates, by contrast, permits the searching of all of its data, including by name and address.

The court characterized the purpose of the Register as being to protect individuals and corporations that interact with other corporations by assuring them easy access to identity information, including the names of those persons associated with a corporation. An electronic database gives users the ability to make quick searches and from a distance. Quebec’s Act to Establish a Legal Framework for Information Technology provides that where a document contains personal information and is made public for particular purposes, any extensive searches of the document must be limited to those purposes. This law places the onus on the person responsible for providing access to the document to put in place appropriate technological protection measures. Under the ALPE, the Registrar can carry out more comprehensive searches of the database on behalf of users who must make their request to the Registrar. Even then, the ALPE prohibits the Registrar from using the name or address of an individual as a basis for a search. According to the Registrar, a member of the public has right to know, once one they have the name of a company, with whom they are dealing; they do not have the right to determine the number of companies to which a physical person is linked. By contrast, this latter type of search is one that could be carried out using the OpenCorporates database.

The court noted that it was not its role to consider the legality of OpenCorporates’ database, nor to consider the use made by others of that database. It also observed that individuals concerned about potential privacy breaches facilitated by OpenCorporates might have recourse under Quebec privacy law. Justice Rogers’ focus was on the specific question of whether the Registrar could prevent OpenCorporates from using the data it gathered prior to the change of terms of service in 2016. On this point, the judge ruled in favour of OpenCorporates. In her view, OpenCorporates’ gathering of this data was not in breach of any law that the Registrar could rely upon (leaving aside any potential privacy claims by individuals whose data was scraped). Further, she found that nothing in the ALPE gave the Registrar a monopoly on the creation and maintenance of a database of corporate data. She observed that the use made by OpenCorporates of the data was not contrary to the purpose of the ALPE, which was to create greater corporate transparency and to protect those who interacted with corporations. She ruled that nothing in the ALPE obligated the Registrar to eliminate all privacy risks. The names and addresses of those involved with corporations are public information; the goal of the legislation is to facilitate digital access to the data while at the same time placing limits on bulk searches. Nothing in the ALPE prevented another organization from creating its own database of Quebec businesses. Since OpenCorporates did not breach any laws or terms of service in collecting the information between 2012 and 2016, nothing prevented it from continuing to use that information in its own databases. Justice Rogers issued a declaration to the effect that the Registrar was not permitted to prevent OpenCorporates from publishing and distributing the data it collected from the Register prior to 2016.

While this was a victory for OpenCorporates, it did not do much more than ensure its right to continue to use data that will become increasingly dated. There is perhaps some value in the Court’s finding that the existence of a public database does not, on its own, preclude the creation of derivative databases. However, the decision leaves some important questions unanswered. In the first place, it alludes to but offers no opinion on the ability to challenge the inclusion of the data in the OpenCorporates database on privacy grounds. While a breach of privacy argument might be difficult to maintain in the case of public data regarding corporate ownership, it is still unpredictable how it might play out in court. This is far less sensitive data that that involved in the scraping of court decisions litigated before the Federal Court in A.T. v. Globe24hr.com; there is a public interest in making the specific personal information available in the Registry; and the use made by OpenCorporates is far less exploitative than in Globe24hr. Nevertheless, the privacy issues remain a latent difficulty. Overall, the decision tells us little about how to strike an appropriate balance between the values of transparency and privacy. The legislation and the Registrar’s approach are designed to make it difficult to track corporate ownership or involvement across multiple corporations. There is rigorous protection of information with low privacy value and with a strong public dimension; with transparency being weakened as a result. It is worth noting that another lawsuit against the Register may be in the works. It is reported that the CBC is challenging the decision of the Registrar to prohibit searches by names of directors and managers of companies as a breach of the right to freedom of expression.

Because the terms of service were not directly at issue in the case, there is also little to go on with respect to the impact of such terms. To what extent can terms of service limit what can be done with publicly accessible data made available over the Internet? The recent U.S. case of hiQ Labs Inc. v. LinkedIn Corp. raises interesting questions about freedom of expression and the right to harvest publicly accessible data. This and other important issues remain unaddressed in what is ultimately an interesting but unsatisfying court decision.

 

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