The smart city data governance and intellectual property issues facing Waterfront Toronto and Sidewalk Labs are complex. Recently, I have been throwing out a few questions and thoughts about this project.
In this post, I’m offering two questions that Ontario’s Ford government might want to ask Waterfront Toronto.
Who is going to pay for civic data trust?
Sidewalk Labs (a Google-affiliate) proposes a civic data trust to govern the data generated by the smart city project. Somehow this so-called trust (it isn’t technically a trust for reasons I and others have explained) will manage open data for projects beneficial to the community. I still haven’t wrapped my head around how data can be both open and yet the purposes for which it will be used restricted – hopefully that will become clear.
However, the bigger picture for Premier Doug Ford should be who is going to be stuck with the long-terms costs of supporting the work of the civic data trust? The City of Toronto? The province? Ottawa? Is the civic data trust a method for Sidewalk Labs to avoid long-term costs of data governance by outsourcing it?
The civic data trust will presumably need to pay people. It will have board members and, if it is to do its work effectively, it will need staff, equipment and premises. It will also need access to experts and, yes, lawyers. The fact is that where there is data to be monetized and intellectual property to be commercialized, there are lawyers and litigation. And those lawyers and that litigation will not be confined to the geographic boundaries of Canada.
No one should expect that companies will simply comply with requests of the civic data trust when the civic data trust’s rules are inconvenient to the interests of multinational technology companies. Our case books are replete with examples of companies prioritizing their interest in freedom to operate and intellectual property rights over asserted civic interests. That is a perfectly legitimate feature of our legal system. It is also a hard reality.
Sidewalk Labs’ affiliate is proving to be an easy-to-digest example of what happens when a multi-national company’s freedom to operate comes up against Canadian laws and regulations. In Equustek v. Google, Google was ordered to remove search results relating to a company that was infringing the intellectual property rights and wrongfully using the confidential information of a small technology company in British Columbia. Google fought that order all the way to the Supreme Court of Canada. When it lost, it ran home to California and obtained an order of the California court telling it that it did not have to comply with an order confirmed by the highest court in Canada.
Right now, Google is also fighting the Office of the Privacy Commissioner of Canada’s jurisdiction over it. Google says that its search engine is not a commercial activity and, therefore, the Personal Information Protection and Electronic Documents Act does not apply to it. Google might well win that one.
The point is not that Google is bad or something nefarious is going on. Google might be right. The point is that the civic data trust is not going to get its way just because it says so. When it comes to intellectual property and the freedom to operate, everyone should expect that companies will resist restrictions and will litigate, unless those restrictions hurt their competitors more than they do their own business.
So, who is going to pay for the inevitable costs that the civic data trust will incur to do its work and enforce its rules for the use of the data in the public interest? Is the civic data trust going to be self-funded? Is this where any revenue or royalties will go? Is it enough that it might be revenue neutral. Or, will the protection of the public interest fall to the City’s budget, the Province’s or Ottawa’s. Premier Ford’s government should be asking that question.
Why does Waterfront Toronto think Canadian privacy laws are adequate to govern this project?
A related question that Premier Ford’s government should be asking Waterfront Toronto is why Waterfront Toronto is (or at least its advisor is) representing to the public that federal laws are up-to-the-task of protecting privacy in this project when Waterfront Toronto’s advisor and the Privacy Commissioner of Canada have said the opposite to Parliament.
In an op-ed for the Toronto Star, Chantal Bernier (a legal advisor to Waterfront Toronto – and a former colleague of mine when I practiced at the same law firm) claimed that we are protected by strong federal privacy laws and that there was meaningful recourse.
I don’t criticize Ms. Bernier for advocating for her client through any available medium. However, Ms. Bernier’s comments were strikingly different when she appeared before Parliament’s Standing Committee on Access to Information, Privacy and Ethics.
During her testimony on February 27, 2017, Ms. Bernier said that, in her experience as a lawyer at an international law firm, there was a “disparity” between the enforcement powers of the Privacy Commissioner of Canada and – indeed – referred to his powers as “actually absent”. She noted that the Privacy Commissioner must rely on moral suasion and the organization’s reluctance to take a reputational hit from not complying. As a result, she argued for providing the Commissioner with order-making powers that included administer administrative monetary penalties.
Indeed, Commissioner Therrien has also argued for order-making powers and the ability to administer monetary penalties, as well as a bigger budget. The Commissioner summed up the position bluntly in his 2017-2018:
Canadians cannot afford to wait several years until known deficiencies in privacy laws are fixed. Technology is evolving extremely rapidly and many new technologies disrupt not only business models but also social and legal norms. Legal protections must improve apace if consumer trust is to reach the level everyone desires. As ETHI commented in its June report, “the urgency of the matter cannot be overstated.”
I don’t agree with the Commissioner. I think Ms. Bernier was probably right in her Toronto Star article. However, Premier Ford should be asking Waterfront Toronto which is it? Is everything hunky-dory and Canadians will be protected, or is change required in order to deal with the new challenges of this project?