Canada Has Legal Precedents to Regulate Surveillance Pricing

Canada possesses a legal precedent in the Telecommunications Act of 1993 that prohibits unjust discriminatory pricing, which policymakers can leverage to regulate surveillance pricing practices. Although Bill C-36, the recently introduced federal privacy legislation, aims to modernize privacy protections, it does not explicitly address surveillance pricing, leaving regulatory gaps in this emerging area.

What Happened

Canada’s Telecommunications Act sets a longstanding legal framework that requires telecommunication carriers to charge just and reasonable rates and forbids unjust discrimination. This includes subsection 27(2), which prohibits any rate causing undue or unreasonable disadvantage. Canada’s federal privacy reform initiative introduced via Bill C-36 in 2023 enhances transparency standards for automated decision-making but does not specifically prohibit or clarify regulation on surveillance pricing, the practice of using personal data to set individualized prices.

Key Facts

• The Telecommunications Act of 1993 mandates just and reasonable pricing for telecommunication services and bans unjust discrimination under subsection 27(2).
• The Canadian Radio and Telecommunications Commission (CRTC) has exercised broad discretionary powers under this Act, including a 2015 ruling against Bell for discriminatory pricing favoring its own services.
• Bill C-36, the federal privacy reform bill, requires organizations to disclose automated decision-making impacts but lacks explicit prohibitions on surveillance pricing practices.
• Quebec’s Law-25 restricts profiling using personal and de-identified data, representing a provincial precedent addressing data-driven pricing discrimination.
• Currently, the Personal Information Protection and Electronic Documents Act (PIPEDA) permits personal information use for “appropriate purposes,” which excludes only discriminatory practices based on human rights grounds.

Why It Matters

The existing legal frameworks in telecommunications and privacy reflect that unfair discriminatory pricing based on consumer profiling is neither novel nor acceptable. Surveillance pricing can result in some consumers facing arbitrarily higher costs with little transparency or recourse, undermining fairness and consumer rights. Expanding the principle of just and reasonable pricing beyond telecommunications to general data use practices offers a path to protect Canadians from exploitative data-driven pricing.

Background

The Telecommunications Act has long prohibited unjust discrimination in pricing, exemplified by the 2015 CRTC decision against Bell’s self-preferencing practices. The Broadcasting Act also includes similar provisions addressing undue preference or disadvantage. Canada’s federal privacy framework under PIPEDA currently imposes a high threshold for identifying inappropriate data uses, and the Privacy Commissioner issues guidance against unethical profiling. However, Bill C-36, while advancing transparency for automated decisions, stops short of explicitly regulating surveillance pricing.

Analysis

Experts suggest that subsection 27(2) of the Telecommunications Act offers a tested, broad discretionary authority suitable for addressing surveillance pricing discrimination. Applying this legal principle more broadly could fill the gaps left by Bill C-36. Privacy law reform should incorporate clear definitions of unfair discrimination in data use for pricing to ensure effective enforcement. The current emphasis on transparency alone is insufficient to prevent discriminatory pricing, as disclosure without substantive prohibitions allows the practice to persist unchecked.

Who Is Affected

• Consumers across Canada, particularly vulnerable segments who may be targeted with higher, data-driven prices without knowledge.
• Telecommunication service providers, subject to existing just and reasonable pricing rules.
• Businesses employing algorithmic pricing strategies leveraging detailed consumer personal information.
• Regulatory bodies such as the Canadian Radio and Telecommunications Commission (CRTC) and the Privacy Commissioner.

What Remains Unclear

• Whether Bill C-36’s provisions can be interpreted or supplemented by regulations to explicitly ban surveillance pricing.
• The precise threshold for what constitutes a “significant impact” requiring disclosure under Bill C-36.
• How Quebec’s Law-25 will be enforced concerning surveillance pricing, given the lack of court precedents.
• Potential legislative or regulatory amendments to extend the Telecommunications Act’s principles beyond telecommunications services.

What Comes Next

Bill C-36 is currently under parliamentary review, with anticipated regulatory guidance expected to clarify automated decision-making transparency requirements. The possibility of amendments to explicitly regulate surveillance pricing remains open. Meanwhile, regulatory bodies like the CRTC and the Privacy Commissioner may increasingly apply their discretionary authorities within existing frameworks to address unfair data-driven pricing practices.

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