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Consumer Protection in the Digital Marketplace

Consumer Protection in the Digital Marketplace2025-03-10T19:41:51+00:00

Project Purpose

The LCO’s Improving Consumer Protection in the Digital Marketplace: Final Report is the first comprehensive, independent review of Ontario’s Consumer Protection Act (CPA) in over 20 years. Our Final Report makes 32 recommendations to improve consumer protection in terms of service (ToS) contracts for digital products and services.

In broad terms, the LCO’s project considers if or how Ontario’s consumer protection legislation should be updated to better protect consumers in the digital marketplace. More specifically, the project considers how to update traditional consumer protections such as notice and disclosure requirements, deception and unconscionability rules, and consumer enforcement in light of the new, complex, and expansive range of consumer risks in the digital economy.

The LCO’s project coincides with the first significant consumer protection update in Ontario in the last twenty years. In December 2023, the provincial government passed Bill 142, the Better for Consumers, Better for Businesses Act, 2023 (Bill 142). Bill 142 enacted the Consumer Protection Act, 2023 (CPA 2023) which replaced the Consumer Protection Act, 2002 (CPA 2002).

The current Advisory Committee members are as follows:

  • Dan Edmondstone – McMillan LLP, and the Ontario Bar Association Business Law Section
  • Jack Enman-Beech – Faculty of Law, University of Toronto
  • David Fewer – General Counsel, CIPPIC
  • Florencia Marotta-Wurgler – New York University School of Law
  • Alexandra Mogyoros – Lincoln Alexander School of Law, Toronto Metropolitan University
  • Marina Pavlovic – Faculty of Law, University of Ottawa
  • Michael Tamblyn – CEO, Rakuten Kobo, and LCO Board Member

Key Areas for Reform

The provincial reforms were motivated by many issues above and beyond digital contracting. One of the province’s key objectives, however, was “to ensure that the laws governing the marketplace are in tune with our times” and to

…strengthen protection for consumers, adapt to changing technology and marketplace innovations, and streamline and clarify requirements to improve consumer and business understanding and compliance.

The LCO carefully analyzed CPA 2023 through the lens of the “new consumer agenda” adopted in many jurisdictions and our extensive research and consultations. The LCO believes that Ontarians can learn from these experiences and draw upon the broad range of law reform options that have been implemented elsewhere.

As currently enacted, the LCO believes CPA 2023 does not provide sufficient protections for Ontario’s online consumers. Most significantly, CPA 2023 does not establish a dedicated regulatory framework to govern online consumer transactions.

The LCO believes that CPA 2023 will fulfill its potential if the provincial government adopts a series of focused law and regulatory reforms. If adopted, these measures would improve the CPA 2023 for the benefit of all Ontarians.

LCO Recommendations

The LCO has made 32 recommendations that could be adopted into the new legislation or forthcoming regulations:

Recommendations 1 – 15 would update CPA 2023 to better protect consumer contracting rights in the digital marketplace by:

  • Establishing a dedicated legal framework to address practices specific to online consumer contracting.
  • Eliminating the minimum monetary threshold to protect consumers in all transactions.
  • Improving notice and disclosure with simpler and up-front “key information” that is explicit about consumer risks, consequences, and choices.
  • Prohibiting a range of practices in the digital marketplace that have been shown to be contractually deceptive, unfair, or unconscionable.
  • Prohibiting a range of specific online contracting and user interface practices that deceive, coerce or nudge consumers into unwanted choices (so called “dark patterns”).
  • Establishing a “good faith” duty and criteria for unilateral contract amendment in routine circumstances.

Recommendations 16 – 23 would update CPA 2023 to better protect vulnerable consumers by:

  • Establishing a plain language requirement and standard for consumer contracts.
  • Defining the failure to accommodate as an unconscionable contracting practice.
  • Protecting youth online by adopting an age-appropriate design code.
  • Protecting younger and older consumers by making it an unconscionable act to take advantage of a consumer as a result of their age.

Recommendations 24 – 32 would update CPA 2023 to improve enforcement and ensure effective access to justice by:

  • Increasing the use of investigations, systemic investigations, consent agreements (including fines), and interpretive guidance.
  • Establishing minimum standards for investigations of consumer complaints.
  • Establishing adaptable sliding-scale fines and penalties commensurate with the size of the business in breach of the CPA and increasing maximum fines and penalties.
  • Establishing damages for disgorgement and specifying statutory damages.
  • Consider establishing a consumer assistance organization.
  • Consider establishing a terms of service registry.

The complete list of LCO recommendations is available in Appendix A of the Final Report and Executive Summary.

Project Lead and Contacts

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

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

Project Documents

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