Canada proposes to increase penalties for tech giants in its Digital Charter

May 27 2019

The Canadian federal government has proposed to introduce a combination of fines for companies that violate privacy laws, in order to rein in the growing power of Silicon Valley tech giants.

Canada’s Innovation Minister recently announced a 10-point Digital Charter that aims to provide more transparency into how companies collect and use personal information and stronger rights for consumers to consent to the use of their data. Key principles of the Charter include giving Canadians control over their data, promoting ethical use of data, ensuring that the online marketplace is competitive to facilitate growth of Canadian businesses, and implementing “meaningful penalties” for violations of privacy laws.

The Digital Charter does not provide specifics on what “meaningful penalties” for breaches of privacy laws would look like. The Innovation Minister has suggested a broad range of fines to tackle privacy violations by tech giants, including a percentage of a company’s revenue. This is similar to a recent proposal by the Australian federal government to increase penalties for privacy breaches, including a fine of up to 10 per cent of a company’s annual turnover. For more information on that proposal, check out our blog post “Proposal to increase penalties for privacy breaches”.

The Digital Charter is part of Canada’s broader national data strategy reforms, and is a step towards updating Canada’s decade-old privacy laws. These laws have lagged far behind other international developments in the privacy space such as the EU’s General Data Protection Regulation (and its eye watering potential penalties). The new privacy laws are likely to be introduced in parliament following Canada’s federal elections in October.

It seems the tide is rising on privacy laws and their potential penalties. Of course, some multi-national vendors could face fierce penalties in multiple jurisdictions if they misstep. That could get expensive.