Canadian COMPETITION LAW

In a curious pleading filed in the British Columbia Supreme Court, a Sunshine Coast British Columbia plaintiff has commenced a punitive damages class action against Google for allegedly violating Canadian privacy, misleading advertising, criminal, intellectual property and tort laws in relation to its Gmail webmail service.  The thrust of the dispute appears to be centered around allegations that Google intercepted and used information from e-mails sent from non-Gmail users to Gmail accounts for advertising.

With respect to privacy, the plaintiff alleges that Google intercepted, copied, scanned, retained and used private communications sent from non-Gmail users to Gmail accounts to generate free information used for advertising services, committing the tort of invasion of privacy under the British Columbia Privacy Act and at common law.

As for competition law, the plaintiff also argues that Google violated the criminal misleading advertising provision (section 52) of the federal Competition Act (misleading advertising under the Competition Act can be enforced as either a criminal or civil matter under sections 52 or 74.01).  The plaintiff’s misleading advertising claim is slightly unclear, but he appears to allege that Google failed to disclose its data collection activities (i.e., interception, copying, scanning and use of private communications), its false or misleading representations were made intentionally (i.e., knowingly or recklessly), they were made to advance its business interests and caused the plaintiff (and other class members) damages.

Under the Competition Act, civil actions may be commenced under any of the Part VI offences of the Act, including criminal conspiracy agreements, bid-rigging and criminal misleading advertising, although misleading advertising based civil claims are much less common under the Act than section 45 (conspiracy) based claims.  In addition, the misleading advertising provisions of the Act may be violated where a false or misleading claim is made to promote a product or service or “any business interest”, which allows them to be broadly applied to a variety of false or misleading product or business related claims.  Both the criminal and civil misleading advertising provisions of the Act can also be violated both with false or misleading claims or in some cases omissions – for example, the omission of material information, such as additional price information, important terms or conditions, etc.

Plaintiffs are, however, required to demonstrate actual loss or damage as a result of conduct challenged in civil actions under the Competition Act (one obvious potential obstacle in this case) and section 36 of the Act, the provision under which civil actions are commenced under the Competition Act, does not allow punitive damages (which are available under other causes of action) based on the language of the provision which allows plaintiffs to recover amounts “equal to the loss or damage proved to have been suffered” (see e.g., Wong v. Sony Canada Ltd).

Another potential frailty of this claim, at least from a competition law perspective, is potentially the risk of being struck as exceeding the relevant limitation period under the Competition Act, given that the claim appears to attack conduct dating back to 2004.   In this regard, the Competition Act has an express, and rather short, limitation period which runs from the later of two years from the day on which the alleged conduct was engaged in or when criminal proceedings are disposed of.  Some Canadian jurisprudence has also circumscribed plaintiffs’ efforts to extend this limitation period, based on effects or discoverability principles – for example, Garford Pty Ltd. v. Dywidag Systems International Canada, Ltd. and Fairview Donut Inc. v. The TDL Group Corp.  Of course, continuing conduct may still potentially be subject to challenge.

The plaintiff also claims that Google has violated the Criminal Code (by unlawfully intercepting e-mails without judicial authorization under Part VI of the Code, which governs wiretaps and interception of private communications) and federal Copyright law (by infringing the economic and moral rights of class members’ in their e-mails).  The plaintiff also makes additional claims in the torts of conversion and detinue, alleging that Google has intercepted and taken e-mails from senders which are not its property.

All in all a most curious and unusual claim, with some commentators referring to it as a “you must be kidding” case.  It will be interesting to watch whether the case settles or how Google responds.

For a copy of the plaintiff’s Notice of Civil Claim see: Wayne Plimmer v. Google, Inc.

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For more information about Canada’s misleading advertising laws see: misleading advertising

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