IT.CAN Newsletter/Bulletin
September 22, 2016/22 septembre 2016

ISP’s Misleading Advertising Curtailed by Competition Commissioner

Comwave enters into consent agreement regarding internet service ads

Comwave Networks Inc. is a Toronto-based ISP, “that provides a range of communications services to consumers, including internet and home phone services.” It attracted the attention of—and eventually an investigation by—the Competition Commission because of several marketing techniques it began using in 2011. On 19 September 2016 Comwave entered into a Consent Agreement with the Commission which stipulated certain findings. Comwave’s advertising made statements about the prices for its telecommunications services, but in fact it also charged consumers “Non-Optional Fees” which were disclosed in fine print disclaimers. Its telephone intake staff were required to review these various Non-Optional Fees with consumers prior to sale and installation with the services, but the Commission nonetheless concluded that this was not enough to displace the misleading advertising about prices. Similarly, Comwave’s advertising about home phone service offered unlimited local calling, using language such as “The Lowest Price Home Phone line with Unlimited Calling,” but had disclaimers which actually limited home phone service to 3000 minutes per month. It also offered the public special price offerings, such as “6 months free home phone service,” but with terms and conditions attached that would only be explained by the telephone intake staff. Further, Comwave offered unlimited internet services, using phrases like “No caps on downloads,” “Limit free,” and “Now enjoy watching all the movies you want,” but in fact there were disclaimers that imposed a monthly limit on downloads, beyond which the customer’s download speeds would be reduced.

The Consent Agreement notes that Comwave did not admit to the Commissioner’s conclusions but that it did not contest them, and that the Commissioner agreed to more favourable terms “than would otherwise be the case” because of Comwave’s “full and timely cooperation with the Commission’s inquiry.” It is also noted that Comwave had taken various steps to remediate the problematic advertising, such as removing the limiting disclaimers, download limits, etc. In the result, Comwave agreed to post a “Corrective Notice” on its customer portal for three months, in which it outlined that the advertising described above “raised concerns under s. 74.01 of the Competition Act,” and that it had entered into the Consent Agreement. Comwave also agreed to pay $300,000.00 as an administrative monetary penalty and $60,000.00 to defray the Commissioner’s costs; and to establish and maintain a Corporate Compliance Program, which would be monitored by the Commission.

Court (Micro?) Manages Electronic Communications in Family Cases

Orders specifying terms of electronic communication sometimes become quite detailed

As all readers of this newsletter who are family law practitioners will know, custody arrangements between parents usually contain terms regarding how parents (whether non-custodial or those sharing custody) will communicate with their children when they are not with them. Of late, virtually any custody agreement approved by (or custody arrangement imposed by) a court will contain terms about electronic communication, detailing for example the use of email or Skype. A recent Ontario case, Douglas v. Moyer, is typical. A fractious custody dispute ended up with the child, William, being permitted to remain in New Brunswick with his mother rather than returning to Ontario with his father. The court specified:

The Applicant and William shall have unrestricted phone or email or other electronic access to each other provided that the Applicant may arrange to give William a cell phone at the expense of the Applicant.

Interestingly, the court also ordered that William would have telephone or electronic access to his own lawyer (who had been appointed to represent him personally by the Office Children’s Lawyers of Ontario), whenever he wanted it or whenever the lawyer wanted to contact him.

In another recent case, Alhashimi v. Alhashimi, the court dipped even further into regulating the nature of electronic communication, this time between the parents involved in a fairly heated marriage breakup. The parties had a history of very rude and disrespectful communications, and the evidence included the contents of numerous text messages between them, including some from the father which the judge described as “offensive and abusive…appalling.” For his part, the father claimed that the insulting and condescending tone of texts from the mother often upset him and were a major cause of conflict between them.

In varying the court’s order as to parenting arrangements, Justice Saunders of the Supreme Court of British Columbia included a fairly specific term that limited the parties to electronic communication only, and even then in a limited fashion:

The parties’ direct communications with each other will be limited to matters concerning their son and will be by email only, with text messaging to be used as an alternative only in case of urgency or extremely time-sensitive issues. Messages are to be short and their content is to be respectful. All other direct communication is prohibited, in accordance with ss. 222 and 225 of the Family Law Act. Each party will refrain absolutely from commenting on the personal, private lives of the other, and in particular the respondent will refrain absolutely in such direct communications from allegations or insinuations of past or current drug or alcohol use by the claimant.

Contact by Email is Contact

Accused violating no-contact order in harassment case

The Newfoundland and Labrador Provincial Court has noted the way in which electronic communication is simply a part of everyday life with its decision in R v Gill, [2016] NJ No 303 (no hyperlink available). The accused was charged with criminally harassing his ex-girlfriend, and had been released on a recognizance which contained the condition that he not contact her directly or indirectly, in any manner. He breached this order, and over a period of about 6 months sent her 57 emails and left her two voice mails, resulting in him also being charged with breaching his recognizance. The trial judge sentenced him to thirty days imprisonment (to be served intermittently) and two years’ probation. In the course of sentencing the judge noted:

37 Mr. Gill breached his recognizance by repeatedly contacting Ms. B. This did not occur as result of a chance encounter nor was it an isolated mistake. This was continuous and constant contact despite the court's order.

38 The fact that the contact was by e-mail does not lessen the seriousness of the offence. Electronic communication is now the norm for large segments of our society. Contacting a complainant or victim is the most serious form of breach of a court order. It offends the essential role and purpose of the judicial process: protection of the public. As pointed out by the Supreme Court of Canada in R. v. K.R.J., 2016 SCC 31: "It is clear from the plain language of s. 718 that public protection is part of the very essence of the purpose and principles governing the sentencing process" (at paragraph 33). Thus, when such an offence occurs, significant periods of imprisonment should be imposed.

Free Wifi Providers Required to Prevent Misuse of Service in Europe

European Court of Justice provides preliminary ruling on balancing provision of service with preventing copyright infringement.

The Court of Justice of the European Union recently delivered an opinion discussing the balance of interests between those who provide free wifi services and those whose rights might be affected by the use of that service with its decision in Tobias McFadden v Sony Music Entertainment Germany GmbH. This is a particularly timely case given that the European Commission recently announced that it would like to see free wifi implemented across Europe.

Mr McFadden ran a business selling and leasing lighting and sound systems. He operated a wireless local area network free of charge in the vicinity of his business which was intentionally not protected, in order to draw the attention of customers of near-by shops, of passers-by and of neighbours to his company. That network was used to share copyrighted musical works owned by Sony, and Sony sued McFadden for infringement of their copyright. McFadden denied that he himself was responsible for the infringement, but acknowledged that one of the anonymous users of his network could have been responsible. The issue was whether that could be sufficient to make McFadden liable: the Court of Justice was giving preliminary rulings about some aspects of Directives of the European Parliament.

An initial issue for the Court of Justice was whether the service was provided by McFadden “for remuneration”, as was required. That condition was satisfied, however, “where the performance of a service free of charge is provided by a service provider for the purposes of advertising the goods sold and services provided by that service provider, since the cost of that activity is incorporated into the price of those goods or services” (para 42).

The issue therefore was finding measures which balanced the competing fundamental rights of those whose copyright claims were infringed and those who provided free wifi services. The Court of Justice considered three options. First, they rejected requiring monitoring of all information transmitted on the network. Second, they rejected requiring the termination of the internet service completely, on the basis that that was too intrusive on the rights of those who provided such services as an incentive. However, they concluded that requiring password protection for such free services could be a reasonable measure. This approach would allow the service to be provided, would target third party infringement of copyright, but would affect affecting other users from lawfully accessing information using the provider’s services. The Court of Justice concluded

that a measure consisting in password-protecting an internet connection may dissuade the users of that connection from infringing copyright or related rights, provided that those users are required to reveal their identity in order to obtain the required password and may not therefore act anonymously, a matter which it is for the referring court to ascertain. (para 96)

Yelp! Not Liable for Negative Reviews

Having a rating system not the equivalent of creating content

The Ninth Circuit Court of Appeals in the United States has dismissed an attempt to get around prior decisions of the court with its decision in Kimzey v Yelp!. Kimzey operated a locksmith company, and a negative review and one-star rating had appeared on Yelp! Prior decisions had made clear that the passive host of a forum for user reviews could not be liable under the Communications Decency Act (CDA). and so Kimzey was trying to avoid this result.

His first allegation was that Yelp! took the reviews from another site and posted them, thereby in effect becoming the author. The Appeal Court never reached the question of whether, as a matter of law, this could render an otherwise passive host into an author, since in this case there was only a “threadbare allegation”, which was not sufficient: “Were it otherwise, CDA immunity could be avoided simply by reciting a common line that user-generated statements are not what they say they are.”

Second, Kimzey argued in effect that creating a star rating system turned Yelp! Into the creator of the content. The Appeal Court also rejected this argument at p 12 of the decision:

It is clear here, however, that neither of the allegedly creative actions taken by Yelp falls within our interpretation of the terms “creation” or “development” of information. Even were we convinced that a one-star rating could be understood as defamatory—a premise we do not embrace, see Aviation Charter, Inc. v. Aviation Research Grp./US, 416 F.3d 864, 870–72 (8th Cir. 2005) (finding ratings inactionable opinion statements), abrogated on other grounds by Syngenta Seeds, Inc. v. Bunge N. Am., Inc., 773 F.3d 58 (8th Cir. 2014)—the rating system does “absolutely nothing to enhance the defamatory sting of the message” beyond the words offered by the user. Roommates.Com, 521 F.3d at 1172.

Concerns Raised About Hacking of Biometric Data Gathered at the Border

CBSA briefs Public Safety Minister about potential for hacking & misuse

The Toronto Star recently reported that it obtained, via an access to information request, documents prepared by the Canadian Border Services Agency (CBSA) in which the agency urges the Minister to allow them to “keep pace with emerging security vulnerabilities” as regards their computer systems. They cited the fact that CBSA gathers biometric data from approximately 355,000 people who enter Canada from approximately 30 countries, and noted the dangers that malicious hacking could create:

A malicious cyberattack, for example, could infiltrate the back-end of a biometric identification system and produce false acceptances and/or rejections… Such attacks could disrupt border traffic flows and compromise the integrity of border controls. CBSA must protect Canadians from increasingly complex safety and security threats and continue to advance security monitoring in all technologies.

Given that CBSA is seeking to gather more data on a larger number of individuals entering Canada (though apparently not Canadians, as yet), and that the public is demanding greater privacy controls on such information where it is gathered, the agency noted that “it is essential that these information systems be designed for robust operability and resilience to cyber-attacks.”