Consumer Protection in the Digital Marketplace

Project Overview

The LCO’s Consumer Protection in the Digital Marketplace project considers updates to Ontario’s Consumer Protection Act to improve notice, consent, terms of service, and access to justice in light of rapid changes in technology and the digital marketplace in Ontario.

Hardly a day goes by that consumers in Ontario are not asked to click, tap, scan, or otherwise confirm “I ACCEPT” when presented with a contract for an online product or service.

Yet consumers, businesses, and government alike express increasing concern that this framework no longer meets contemporary needs. Ontario’s Consumer Protection Act was enacted in 2002 and has not been substantially amended in 17 years. The project responds to the growing sense that the “fine print” in today’s digital marketplace may not be working as well as it could. More about the project is in Project Issues, below.

Project Status and Activities

The LCO’s Consumer Protection in the Digital Marketplace: Consultation Paper was released on June 22, 2023. Province-wide public consultations concluded in September 2023.

LCO Consumer Protection in the Digital Marketplace Consultation Paper (2023, PDF)

LCO Consumer Protection in the Digital Marketplace Consultation Paper (2023, DOC) – Accessible Word Version

In October 2023, the Government of Ontario introduced Bill 142, Consumer Protection Act, 2023. Several provisions in Bill 142 reflect proposals in LCO’s Consultation Paper, including:

Expanding the right to cancel contracts if notice/disclosure do not comply with the CPA.
Adding a “discoverability doctrine” for unfair terms and practices.
Limiting business’ ability to unilaterally amend, extend or renew contracts without express consumer consent.
Prohibiting contractual terms or punitive actions that limit online reviews.
Expanding some forms of consumer remedies.
Enacting more penalties and fines, including new administrative fines and court-ordered penalties.

In November 2023, the LCO appeared before the Standing Committee on Justice Policy. We discussed 18 recommendations to improve Bill 142 and to establish effective authority for necessary regulations to follow in 2024.

LCO Letter to Standing Committee on Justice Policy: Bill 142 (November 2023, PDF)

LCO Submission to Standing Committee on Justice Policy: Table of Proposed Recommendations (November 2023, PDF)

The LCO recommend several practical, targeted, and proven amendments to the current Bill:

Including more explicit recognition of online contracting and establish an explicit authority to prescribe regulations governing online consumer contracts.
Prohibiting the use of “dark pattern” software and design practices designed to deceive Ontario’s consumers.
Eliminating the CPA’s monetary threshold unless explicitly exempt by regulation to protect consumers who use low-cost and free online services.
Including stronger and clearer protections against unfair or unconscionable online practices.
Including stronger enforcement by government and remedies for consumers.
Improving consumer protections against unilateral contract changes.
Improving notice and disclosure for online consumers.

Project Issues

The LCO’s Consultation Paper was prepared following considerable research and informal consultations with our project Advisory Committee and many other individuals and groups representing a broad cross-section of perspectives.

Broadly speaking, the Consultation Paper asks two sets of questions.

First, the LCO considers if or how Ontario’s Consumer Protection Act should be updated to better protect consumers considering the new, complex, and expansive range of consumer risks in the digital economy. As such, the Consultation paper addresses what might be considered classic or traditional consumer protection issues and contracts principles, including:

Notice and disclosure
Deception and unconscionability (unfair practices)
Unilateral changes to contracts
Contracting with youth and vulnerable groups
Access to justice, dispute resolution, and systemic oversight.

Second, the Consultation Paper considers the effect and impact of important new technological and business practices that may be unfamiliar to many consumers. This includes deceptive “dark pattern” software and contract practices, network effects, platform lock-in, monetization practices, and algorithmic content shaping. These developments challenge many traditional principles of consumer protection law, often with inconsistent and unpredictable results.

The LCO’s research also suggests an emerging consensus around key law reform principles and proposals that form the basis of our Consultation Paper. These are sometimes described as being part of a “new consumer agenda” which has gained significant momentum in the United States, European Union, and UK.

The consultations were additionally supported with Background Brief documents.

Backgrounders – Consultation Issues in Brief (2023, PDF)

Backgrounders – Consultation Issues in Brief (2023, DOC) – Accessible Word Version

Summary Consultation Questions (2023, PDF)

Project Next Steps and Contacts

The LCO recognizes that effective consumer protection reform depends not just on legislative amendments but regulatory guidance and other initiatives.

The LCO understands there is likely to be an opportunity in 2024 to comment on potential regulatory reforms and other initiatives. The LCO’s Final Report on Consumer Protection in the Digital Marketplace will address these issues and will be available in 2024.

The LCO welcomes your feedback.

The LCO’s Project Lead is Ryan Fritsch. He can be contacted at rfritsch@lco-cdo.org.

The LCO can also be contacted at:

Email: LawCommission@lco-cdo.org

Web: www.lco-cdo.org
X (formerly Twitter): @LCO_CDO
LinkedIn: Law Commission of Ontario | Commission du droit de l’Ontario

Tel: (416) 650-8406
Toll-free: 1 (866) 950-8406

Law Commission of Ontario
2032 Ignat Kaneff Building
Osgoode Hall Law School, York University
4700 Keele Street Toronto, Ontario, Canada M3J 1P3