Teresa Scassa - Blog

 

This post is the third in a series that considers the extent to which the Digital Charter Implementation Act (Bill C-11) by overhauling Canada’s federal private sector data protection law, implements the principles contained in the government’s Digital Charter. This post addresses the fourth principle of the Charter: Transparency, Portability and Interoperability, which provides that “Canadians will have clear and manageable access to their personal data and should be free to share or transfer it without undue burden.”

Europe’s General Data Protection Regulation (GDPR) introduced the concept of data portability (data mobility) as part of an overall data protection framework. The essence of the data portability right in article 20 of the GDPR is:

(1) The data subject shall have the right to receive the personal data concerning him or her, which he or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller without hindrance from the controller to which the personal data have been provided [...]

In this version, the data flows from one controller to another via the data subject. There is no requirement for data to be in a standard, interoperable format – it need only be in a common, machine-readable format.

Data portability is not a traditional part of data protection; it largely serves consumer protection/competition law interest. Nevertheless, it is linked to data protection through the concept of individual control over personal information. For example, consider an individual who subscribes to a streaming service for audiovisual entertainment. The service provider acquires considerable data about that individual and their viewing preferences over a period of time. If a new company enters the market, they might offer a better price, but the consumer may be put off by the lack of accurate or helpful recommendations or special offers/promotions tailored to their tastes. The difference in the service offered lies in the fact that the incumbent has much more data about the consumer. A data mobility right, in theory, allows an individual to port their data to the new entrant. The more level playing field fosters competition that is in the individual’s interest, and serves the broader public interest by stimulating competition.

The fourth pillar of the Digital Charter clearly recognizes the idea of control that underlies data mobility, suggesting that individuals should be free to share or transfer their data “without undue burden.” Bill C-11 contains a data mobility provision that is meant to implement this pillar of the Charter. However, this provision is considerably different from what is found in the GDPR.

One of the challenges with the GDPR’s data portability right is that not all data will be seamlessly interoperable from one service provider to another. This could greatly limit the usefulness of the data portability right. It could also impose a significant burden on SMEs who might face demands for the production and transfer of data that they are not sufficiently resourced to meet. It might also place individuals’ privacy at greater risk, potentially spreading their data to multiple companies, some of which might be ill-equipped to provide the appropriate privacy protection.

These concerns may explain why Bill C-11 takes a relatively cautious approach to data mobility. Section 72 of the Consumer Privacy Protection Act portion of Bill C-11 provides:

72 Subject to the regulations, on the request of an individual, an organization must as soon as feasible disclose the personal information that it has collected from the individual to an organization designated by the individual, if both organizations are subject to a data mobility framework provided under the regulations. [My emphasis]

It is important to note that in this version of mobility, data flows from one organization to another rather than through the individual, as is the case under the GDPR. The highlighted portion of s. 72 makes it clear that data mobility will not be a universal right. It will be available only where a data mobility framework is in place. Such frameworks will be provided for in regulations. Section 120 of Bill C-11 states:

120 The Governor in Council may make regulations respecting the disclosure of personal information under section 72, including regulations

(a) respecting data mobility frameworks that provide for

(i) safeguards that must be put in place by organizations to enable the secure disclosure of personal information under section 72 and the collection of that information, and

(ii) parameters for the technical means for ensuring interoperability in respect of the disclosure and collection of that information;

(b) specifying organizations that are subject to a data mobility framework; and

(c) providing for exceptions to the requirement to disclose personal information under that section, including exceptions related to the protection of proprietary or confidential commercial information.

The regulations provide for frameworks that will impose security safeguards on participating organizations, and ensure data interoperability. Paragraph 120(b) also suggests that not all organizations within a sector will automatically be entitled to participate in a mobility framework; they may have to qualify by demonstrating that they meet certain security and technical requirements. A final (and interesting) limitation on the mobility framework relates to exceptions to disclosure where information that might otherwise be considered personal information is also proprietary or confidential commercial information. This gets at the distinction between raw and derived data – data collected directly from individuals might be subject to the mobility framework, but profiles or analytics based on that data might not – even if they pertain to the individual.

It is reasonable to expect that open banking (now renamed ‘consumer-directed finance’) will be the first experiment with data mobility. The federal Department of Finance released a report on open banking in January 2020, and has since been engaged in a second round of consultations. Consumer-directed finance is intended to address the burgeoning fintech industry which offers many new and attractive financial management digital services to consumers but which relies on access to consumer financial data. Currently (and alarmingly) this need for data is met by fintechs asking individuals to share account passwords so that they can regularly scrape financial data from multiple sources (accounts, credit cards, etc.) in order to offer their services. A regulated framework for data mobility is seen as much more secure, since safeguards can be built into the system, and participants can be vetted to ensure they meet security and privacy standards. Data interoperability between all participants will also enhance the quality of the services provided.

If financial services is the first area for development of data mobility in Canada, what other areas for data mobility might Canadians expect? The answer is: not many. The kind of scheme contemplated for open banking has already required a considerable investment of time and energy, and it is not yet ready to launch. Of course, financial data is among the most sensitive of personal data; other schemes might be simpler to design and create. But they will still take a great deal of time. One sector where some form of data mobility might eventually be contemplated is telecommunications. (Note that Australia’s comparable “consumer data right” is being unrolled first with open banking and will be followed by initiatives in the telecommunications and energy sectors).

Data mobility in the CPPA will also be limited by its stringency. It is no accident that banking and telecommunications fall within federal jurisdiction. The regulations contemplated by s. 120 go beyond simple data protection and impact how companies do business. The federal government will face serious challenges if it attempts to create data mobility frameworks within sectors or industries under provincial jurisdiction. Leadership on this front will have to come from the provinces. Those with their own private sector data protection laws could choose to address data mobility on their own terms. Quebec has already done this in Bill 64, which would amend its private sector data protection law to provide:

112 [. . .] Unless doing so raises serious practical difficulties, computerized personal information collected from the applicant must, at his request, be communicated to him in a structured, commonly used technological format. The information must also be communicated, at the applicant’s request, to any person or body authorized by law to collect such information.

It remains to be seen what Alberta and British Columbia might decide to do – along with Ontario, if in fact it decides to proceed with its own private sector data protection law. As a result, while there might be a couple of important experiments with data mobility under the CPPA, the data mobility right within that framework is likely to remain relatively constrained.

Published in Privacy
Friday, 19 July 2019 09:15

Open Banking in Canada - A Primer

I wrote a short paper on Open Banking in Canada for a presentation I gave to the Digital Strategy Committee of the Board of Directors of Vancity, a Vancouver-based credit union.  The text of this paper is available by clicking on "read more" and/or downloading the PDF attachment below.

Thursday, 04 April 2019 12:54

Open Banking & Data Ownership

On April 4, 2019 I appeared before the Senate Standing Committee on Banking, Trade and Commerce (BANC) which has been holding hearings on Open Banking, following the launch of a public consultation on Open Banking by the federal government. Open banking is an interesting digital innovation initiative with both potential and risks. I wrote earlier about open banking and some of the privacy issues it raises here. I was invited by the BANC Committee to discuss ‘data ownership’ in relation to open banking. The text of my open remarks to the committee is below. My longer paper on Data Ownership is here.

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Thank you for this invitation and opportunity to meet with you on the very interesting subject of Open Banking, and in particular on data ownership questions in relation to open banking.

I think it is important to think about open banking as the tip of a data iceberg. In other words, if Canada moves forward with open banking, this will become a test case for rendering standardized data portable in the hands of consumers with the goal of providing them with more opportunities and choices while at the same time stimulating innovation.

The question of data ownership is an interesting one, and it is one that has become of growing importance in an economy that is increasingly dependent upon vast quantities of data. However, the legal concept of ‘ownership’ is not a good fit with data. There is no data ownership right per se in Canadian law (or in law elsewhere in comparable jurisdictions, although in the EU the idea has recently been mooted). Instead, we have a patchwork of laws that protect certain interests in data. I will give you a very brief overview before circling back to data portability and open banking.

The law of confidential information exists to protect interests in information/data that is kept confidential. Individuals or corporations are often said to ‘own’ confidential information. But the value of this information lies in its confidentiality, and this is what the law protects. Once confidentiality is lost, so is exclusivity – the information is in the public domain.

The Supreme Court of Canada in 1988 also weighed in on the issue of data ownership – albeit in the criminal law context. They ruled in R. v. Stewart that information could not be stolen for the purposes of the crime of theft, largely because of its intangible nature. Someone could memorize a confidential list of names without removing the list from the possession of its ‘owner’. The owner would be deprived of nothing but the confidentiality of and control over the information.

It is a basic principle of copyright law that facts are in the public domain. There is good reason for this. Facts are seen as the building blocks of expression, and no one should have a monopoly over them. Copyright protects only the original expression of facts. Under copyright law, it is possible to have protection for a compilation of facts – the original expression will lie in the way in which the facts are selected or arranged. It is only that selection or arrangement that is protected – not the underlying facts. This means that those who create compilations of fact may face some uncertainty as to their existence and scope of any copyright. The Federal Court of Appeal, for example, recently ruled that there was no copyright in the Ontario Real Estate Board’s real estate listing data.

Of course, the growing value of data is driving some interesting arguments – and decisions – in copyright law. A recent Canadian case raises the possibility that facts are not the same as data under copyright law. This issue has also arisen in the US. Some data are arguably ‘authored’, in the sense that they would not exist without efforts to create them. Predictive data generated by algorithms are an example, or data that require skill, judgment and interpretation to generate. Not that many years ago, Canada Post advanced the argument that they had copyright in a postal code. In the US, a handful of cases have recognized certain data as being ‘authored’, but even in those cases, copyright protection has been denied on other grounds. According ownership rights over data – and copyright law provides a very extended period of protection – would create significant issues for expression, creation and innovation.

The other context in which the concept of data ownership arises is in relation to personal information. Increasingly we hear broad statements about how individuals ‘own’ their personal information. These are not statements grounded in law. There is no legal basis for individuals to be owners of their personal information. Individuals do have interests in their personal information. These interests are defined and protected by privacy and data protection laws (as well as by other laws relating to confidentiality, fiduciary duties, and so on). The GDPR in Europe was a significant expansion/enhancement of these interests, and reform of PIPEDA in Canada – if it ever happens – could similarly enhance the interests that individuals have in their personal data.

Before I speak more directly of these interests – and in particular of data portability – I want to just mention why it is that it is difficult to conceive of interests in personal data in terms of ownership.

What personal data could you be said to own, and what would it mean? Some personal data is observable in public contexts. Do you own your name and address? Can you prevent someone from observing you at work every day and deciding you are regularly late and have no dress sense? Is that conclusion your personal information or their opinion? Or both? If your parents’ DNA might reveal your own susceptibility to particular diseases, is their DNA your personal information? If an online bookstore profiles you as someone who likes to read Young Adult Literature – particularly vampire themed – is that your personal information or is it the bookstore’s? Or is it both? Data is complex and there may be multiple interests implicated in the creation, retention and use of various types of data – whether it is personal or otherwise. Ownership – a right to exclusive possession – is a poor fit in this context. And the determination of ownership on the basis of the ‘personal’ nature of the data will overlook the fact that there may be multiple interests entangled in any single datum.

What data protection laws do is define the nature and scope of a person’s interest in their personal information in particular contexts. In Canada, we have data protection laws that apply with respect to the public sector, the private sector, and the health sector. In all cases, individuals have an interest in their personal information which is accompanied by a number of rights. One of these is consent – individuals generally have a right to consent to the collection, use or disclosure of their personal information. But consent for collection is not required in the public sector context. And PIPEDA has an ever-growing list of exceptions to the requirements for consent to collection, use or disclosure. This shows how the interest is a qualified one. Fair information principles reflected in our data protection laws place a limit on the retention of personal information – when an organization that has collected personal information that is now no longer required for the purpose for which it is collected, their obligation is to securely dispose of it – not to return it to the individual. The individual has an interest in their personal information, but they do not own it. And, as data protection laws make clear, the organizations that collect, use and disclose personal information also have an interest in it – and they may also assert some form of ownership rights over their stores of personal information.

As I mentioned earlier, the GDPR has raised the bar for data protection world-wide. One of the features of the GDPR is that it greatly enhances the nature and quality of the data subject’s interest in their personal information. The right to erasure, for example, limited though it might be, gives individuals control over personal information that they may have, at one time, shared publicly. The right of data portability – a right that is reflected to some degree in the concept of open banking – is another enhancement of the control exercised by individuals over their personal information.

What portability means in the open banking context is that individuals will have the right to provide access to their personal financial data to a third party of their choice (presumably from an approved list). While technically they can do that now, it is complicated and not without risk. In open banking, the standard data formats will make portability simple, and will enhance the ability to bring the data together for analysis and to provide new tools and services. Although individuals will still not own their data, they will have a further degree of control over it. Thus, open banking will enhance the interest that individuals have in their personal financial information. This is not to say that it is not without risks or challenges.

 

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