The Canadian government is proposing stricter privacy rules that would limit businesses from using personal data to charge consumers higher prices, while giving individuals more power over their own information.
Prime Minister Mark Carney’s government released legislation on Monday, June 15, to update the country’s privacy laws. Artificial Intelligence Minister Evan Solomon said the changes would restrict so-called surveillance pricing but stop short of banning it.
“Companies should not have the ability to use your behavior, your location, your profile, your vulnerabilities, or your personal information to charge unfair prices. Your personal information should not be used against you for price gouging,” Solomon told reporters.
The minister said the legislation aims to bar the use of data to target consumers with individualized prices when the harms outweigh the benefits. But the government doesn’t want to ban companies from rewarding consumers with better prices — through loyalty reward programs, for example.
Some jurisdictions in Canada and the US have already moved to address the use of artificial intelligence and algorithms to charge consumers more for products and services. Manitoba’s provincial government has brought forward legislation to outlaw surveillance pricing, while a new law in Maryland will make it illegal for grocers and third-party delivery services to use personal data to charge higher prices.
The practice is also known as algorithmic pricing. A poll conducted by Abacus Data earlier this year found that about half of Canadians said it should be banned, while almost a third said it should be allowed but more strictly regulated.
If passed, the new law would also require organizations to disclose more information about automated decisions, give Canadians the right to have their information deleted under certain circumstances and force businesses to treat children’s data as sensitive.
The government is also planning to create a new regulator to oversee compliance with privacy laws in the private sector, as well as the proposed Digital Safety Act, which aims to safeguard children online. The Office of the Privacy Commissioner of Canada would still be responsible for overseeing government compliance with federal privacy laws.
The regulator would be able to administer penalties as much as C$10 million ($7.1 million) or 3% of global revenue, whichever is greater, for non-compliance with the rules, the government said. But the most serious offenses could face fines of as much as C$25 million or 5% of global revenue.
