The LCO’s Consumer Protection in the Digital Marketplace project considers legal strategies and law reform options to improve consumer protection in online terms of service (ToS) or “click consent” contracts. We’re considering updates to Ontario’s Consumer Protection Act that may improve online notice, consent, terms of service and access to justice in light of rapid changes in technology and the digital marketplace. In early 2023, the LCO will be releasing a Consultation Paper identifying key issues, summarizing law reform options, and asking for comments and advice from stakeholders across Ontario.
Catalyst for Reform
So-called “click to consent” or “terms of service” (ToS) contracts now largely define the relationship between consumers and the “digital marketplace” platforms and services they use. Digital services are now often the gateway to just about everything: shopping, searching for jobs and rental housing, watching movies, connecting with friends and family on social media, learning about election issues, and accessing government services from sensitive health records to paying parking fines.
While the scope of the “digital marketplace” has expanded dramatically, the law of consumer contracts has largely trailed in piecemeal fashion.
The LCO’s project responds to the growing sense that the “fine print” in today’s digital marketplace may not be working as well as it could.
Consumers, businesses and government alike are expressing increasing concern that this framework no longer meets contemporary needs.
- For consumers these contracts are nearly impossible to read, frequently change without notice, contain unknown terms with unclear risks and consequences, and undermine the informed consent and “buy in” they are intended to reflect.
- For businesses the lack of consumer notice or consent represents a risk to regulatory compliance, a risk to reputation, and can make it difficult to determine business point of practice or governance over data and content transmitted across borders.
- For governments there is an interest in maintaining consumer confidence in a robust digital marketplace and ensuring a fair playing field for businesses.
Federal and provincial governments share responsibility for consumer protection in Canada. But existing legislation struggles to provide clear guidance on newly emerging issues distinct to digital platforms and services. These can be concerns with:
- resolving jurisdiction for enforcement and dispute resolution
- the efficacy and applicability of existing consumer protection contract law in the digital realm
- defining what the “digital marketplace” is, and
- new forms of deception and unfairness made possible by technology.
It is also unclear how emerging issues in digital consumer protection are related to other existing federal and provincial legislation like data protection and privacy law, competition law, or product safety, and to voluntary codes of conduct or industry standards over issues like advertising and marketing standards, youth and parental consent, consumer profiling, and so forth.
Federal and provincial governments have begun talking about the need to address these gaps with modernized consumer protection law. Ontario’s 2019 Digital Strategy recommends that the time has come to “find new and agile ways to ensure consumer protections… [and] Help Ontario businesses protect and respect consumers’ rights when collecting their data; …Prevent discriminatory market practices enabled by data-driven practices; … [and] Ensure that strong measures are in place to protect Ontarians, promote public trust and confidence and mitigate risks.” Canada’s 2019 Federal Digital Charter and privacy law consultations similarly suggest that “reducing reliance on consent for common practices or trust environments could provide a balanced approach for individuals and businesses.”
Today, it is fair to say, click-consent and terms of service contracts represent an approach that is hugely variable between products and platforms, poorly understood, largely unexplored, and in need of reform.
What Issues Are Being Looked At?
Preliminary research has led the LCO to a set of issues core to ToS contracts in the digital marketplace. These include:
- Defining the digital marketplace
- Notice and consent
- Access to justice
In early 2023, the LCO will be releasing a Consultation Paper in early 2023. The Consultation Paper identifies and outlines key issues, summarizes law reform options, and asks for comments and advice from stakeholders across Ontario.
The LCO’s project will conclude with an independent, evidence-based, and comprehensive analysis of these issues. The LCO’s final report will recommend reforms to laws, policies, and/or practices where it is appropriate to do so.
Connect with the LCO
Should you have any questions contact Ryan Fritsch, Project Lead, at firstname.lastname@example.org.