the order making power comes with the ability to recommend penalties that in some cases are the highest in the G7. The potential penalties for contravening the law “is the higher of $10,000,000 and 3% of the organization’s gross global revenue in its financial year before the one in which the penalty is imposed.” Moreover, there are even tougher penalties in cases of violations for failing to comply with some of the security breach disclosure rules, data retention requirements, identifying someone using de-identified data (except in limited circumstances), or sanctioning a whistleblower. In those circumstances, the penalties can reach $25,000,000 or 5% of the organization’s gross global revenue.”
What’s interesting here is that a fine of 5% of global revenue is even higher than the GDPR’s 4% figure. It’s a clear indication of how the EU has set a benchmark that Canada now evidently plans to surpass. It emphasizes once more the importance of the GDPR in providing a framework that others can draw on, and which legitimizes their proposals.
The bill includes a new privacy right for data portability, which allows individuals to ask organizations to transfer their personal information elsewhere. There is also an important access right with respect to algorithms. The draft text says:
Here are some key highlights about LGPD: General principles: The main principles that all private and public entities must take into account when processing personal data are purpose, adequacy, free access, data quality, security, prevention of damage, accountability, transparency, need limitation, and non-discrimination.
This goes beyond the corresponding part of the GDPR, Article 22, by requiring an explanation of how an algorithm arrived at its prediction, recommendation or decision. Given the increasing importance of algorithms, and the corresponding concern over their transparency – or lack of it – the Canadian approach could well form the basis of other privacy laws in the future. Another interesting element concerns de-identification of personal information, with strong penalties on those who violate the new standards. The proposed law says that an organization must not use de-identified information “alone or in combination with other information to identify an individual”, except for the purpose of carrying out testing of the effectiveness of security safeguards that have been put in place by the organization to protect the information. As Geist rightly points out, de-identification has been a particularly hot issue in Canada in part because of the public battle over Sidewalk Labs’ plans in Toronto , discussed several times on this blog, and now shut down.
If the organization has used an automated decision system to make a prediction, recommendation or decision about the individual, the organization must, on request by the individual, provide them with an explanation of the prediction, recommendation or decision and of how the personal information that was used to make the prediction, recommendation or decision was obtained.
A novel idea suggested in the draft text is that organizations may create a “code of practice”, which “provides for substantially the same or greater protection of personal information as some or all of the protection provided under this Act.” On the key matter of standards of consent, the bill establishes basic requirements for what must be included for consent to be valid. There is a prohibition on making consent a requirement for a product or service beyond what is strictly necessary.There are some other elements in the CPPA that Geist discusses, and he also promises more posts with analysis in the weeks to come – he’s already written one looking at what he calls “ten pressure points“. Even though the current text is likely to change in various ways, it is clear that Canada’s proposed privacy law will be one of the most important, alongside the GDPR, and a useful further example of how to draft legislation offering strong privacy protection in the digital world.
Featured image by Saffron Blaze.