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Comments to CRTC on Affiliate Data Sharing – Reply Comments to CRTC on Affiliate Data Sharing

Comments of Action Réseau Consommateur, the Consumers’ Association of Canada, and Fédération des Associations Coopératifs d’économie familiale (“ARC et al”)

Canadian Radio-Television and Telecommunications Commission

Ottawa, Canada

K1A 0N2

Attention: Ms. Ursula Menke

Secretary General

Dear Ms. Menke:

Re: Public Notice CRTC 2001-60:

Confidentiality Provisions of Canadian Carriers
1. On behalf of ARC et al, we are in receipt of comments in this proceeding from The Companies, AT&T, Rogers, and Murray Long. The following are ARC et al’s reply comments. Failure to address any particular assertion or argument should not be taken as acceptance of that assertion or argument.

ARC et al do not oppose the concept of implied consent

2. In para.4 of their comments, The Companies state that ARC et al’s “opposition seems to be directed at the concept of implied consent”. Similarly, in para.10 and 11 of its comments, Rogers appears to have misinterpreted ARC et al’s position in this proceeding. ARC et al do not oppose the concept of implied consent (i.e., the fact that consent can sometimes be implied where it is not provided explicitly). What they do oppose is the stretching of this concept to infer consent where it does not exist and cannot reasonably be said to exist.

3. Whether or not consent can be implied in any given circumstance is a factual question, not a legal issue. It depends, in large part, on the reasonable expectations of the individual. The sensitivity of the information is relevant to these reasonable expectations, but it is not determinative. Consent can only be implied where the facts suggest that the individual would have provided explicit consent had it been requested.

4. It follows that, as ARC et al stated in response to ARCetal(CRTC)27Aug01-101, “consent should always be obtained in an express manner, except where there is no doubt that it is being implicitly provided (e.g., use of customer address for billing purposes)”. This principle applies generally, not just in the context of data sharing with affiliates.

5. Hence, ARC et al do not disagree with The Companies and others that consent can be inferred in some circumstances. Disagreement centers on the issue of when consent can be inferred – i.e., when it is reasonable for a company to assume that consent has been provided implicitly. The Companies clearly want to be able to deem customer consent to data sharing even where the customer is unaware of the data sharing. As they state in response to The Companies(ARCetal)27Aug01-2(a),

The Companies believe that consent for sharing of information for marketing or any other purpose may be assumed where (1) the customer is made aware, or may be deemed to be made aware, that when she receives a particular service, personal information will be shared with affiliates for that purpose, and (2) the customer uses that service; (emphasis added)

6. In The Companies(ARCetal)27Aug01-6(b), The Companies take the position that based on their various methods of notifying customers, “all customers are aware or may be deemed to be aware of the sharing and opt-out policies” (emphasis added). TELUS also relies upon deemed consent, as made clear in TELUS27Aug01-2. (ARC et al refer the Commission to paras.32-37 of their Dec.5th comments for a discussion of the adequacy of these methods.)

7. Yet, market research strongly suggests that most customers are in fact unaware of the companies’ sharing and opt-out policies. Of the app. 40 participants in Ekos’ focus groups conducted this past summer, not a single one was aware of the Bell Canada opt-out, and concern was expressed in all four groups about the fact that most customers would not be aware of it. Consent cannot properly be implied in such circumstances.

8. To be clear, ARC et al accept implied consent where there is no doubt that it actually exists. What they do not accept, and what the Companies and others are proposing, is the deeming of consent where none exists and where the company in question has failed to make an adequate effort to ensure that informed consent is actually obtained.

ARC et al’s proposal

9. ARC et al submit that the appropriate rule, supported by the PIPED Act, and applicable to both internal use and sharing with affiliates, is to require the customer’s explicit consent to such use or sharing of confidential personal information except where the use or disclosure is necessary to provide the product or service requested by the customer.

The Companies distort the results of the Ekos Survey

10. In paras.24 and 25, the Companies attempt to use the Ekos survey results to support their position that customers reasonably expect, and thus implicitly consent to, data sharing with affiliates. In reply, ARC et al refer the Commission to the survey report itself rather than the Companies’ distorted interpretation. The results speak for themselves. Nevertheless, the Companies’ comments on this point warrant a brief reply.

11. First, the Companies treat neutral responses (neither agree nor disagree) as supportive of their position. However, neutral responses say nothing about consumer expectations or desires; such consumers are as likely to disagree as to agree with the statement presented to them. Their expectations and desires are unclear. Hence, if neutral responses are to be given any weight, it is to show that assumptions about individual consumer expectations and desires cannot be made with any certainty; consumers themselves are not sure.

12. Second, in para.24 of their comments, the Companies misstate the Ekos survey statements in question. Respondents in fact were asked if they expect (and later, if they want) “the company selling the product or service to try to build an ongoing relationship with me….” The Companies, in their comments, ignore the material words “to try”. This is a significant omission, since attempts to build relationships need not involve the kind of data use that actually building relationships does.

13. ARC et al do not dispute that some consumers expect and indeed want the Companies to share their customer data with affiliates. This, however, is not the issue. The issue is whether the Companies can assume that all customers expect and want this kind of sharing to occur. The evidence is clear that a significant proportion of Canadians neither expect nor want such sharing of their data. The very survey questions to which the Companies refer generated the following results:

  • 21% did not expect that companies will try to build an ongoing relationship with them;
  • 25% do not want companies to try to build an ongoing relationship with them;
  • 24% expressed a low expectation that their telephone company, in particular, would keep track of the services they purchase or use;
  • 41% object to companies with whom they do business keeping track of their purchases;
  • 38% are not comfortable with a company with whom they do business using information about them to advise them of new products and services that may interest them; and
  • 48% are uncomfortable with such companies sharing their data with affiliates for the same purpose.

It is not surprising that most industry players support the deeming of consumer consent to sharing of data with affiliates
1. The Companies and Rogers suggest that the fact that most participants in the proceeding support amending Article 11 is “particularly significant” and that the views expressed by ARC et al are not widely held. First, ARC et al is a coalition of a number of consumer groups, each of which could have filed a separate submission. The fact that consumers are represented by only one intervenor surely does not diminish the overall weight to be accorded the consumer position.

2. Second, it is not at all surprising that on this, like many other issues before the Commission, industry players have a common interest which conflicts with that of consumers. This common interest is to be able to leverage customer information so as to maximize sales, and hence profits. Much more significant than the competitive implications of the Companies’ proposal (e.g., the competitive advantage that it would afford large corporate conglomerates over smaller niche players) is the extent to which it would allow widespread abuse of customer information by service providers.

Meaningful consent should be required for internal use as well as for sharing with affiliates

3. In para.20, the Companies argue that requiring anything more than mere “consent” in Article 11 would create a different standard of consent for internal use vs. affiliate sharing, and that there is no justification for such a differentiation.

4. ARC et al first note that Canadians do appear to distinguish between internal use and affiliate sharing, exhibiting somewhat greater concern with respect to the latter. However, concern is high with respect to both scenarios. In both cases, Canadians want their consent to be obtained before any secondary use of the data occurs. Hence, it is inappropriate to exempt internal use from a requirement for meaningful consent to secondary uses.

5. Indeed, the PIPED Act does not distinguish between internal use and disclosure to affiliates in this respect; the rule requiring individual knowledge and consent applies to both internal use and disclosure to affiliates.

6. For the Commission to clarify the PIPED Act consent requirements in respect of disclosure does not, in ARC et al’s submission, create a different standard of consent for internal use. If, however, there is any concern that it would, the Commission is free to apply the same rule to internal use of confidential customer information as it does to disclosure of such information to affiliates. This would, of course, require further modifications to Article 11.

The evidence is clear that the Companies do not adequately communicate their data sharing policies to consumers

7. The Companies argue that they “have made reasonable efforts to ensure that their customers are advised in clear terms of the purposes for which information will be used, as required by section 4.3.2.” (para.10)

8. ARC et al respectfully disagree. The evidence cannot be clearer that these efforts have been entirely inadequate. As noted above, not one participant in Ekos’s four focus groups (conducted in Ontario and Quebec) was aware of the notice and opt-out offered by Bell Canada. Upon review, the only forms of notice actually used (bill inserts/mailings to new customers, introductory pages of the directory, and website notices) are seriously deficient – see para.33-34, ARC et al Dec.5th Comments. It is therefore not surprising that so few customers are aware of purposes for which their information will be used.

9. Given how much more the Companies could be doing to bring such notices to their customers’ attention, and to make them clear, it cannot be said that these efforts are reasonable.

The Companies’ proposal is unnecessarily broad

10. The Companies are proposing very broad flexibility in terms of deemed consent in order to achieve a relatively narrow purpose. In particular, they are proposing that no restrictions be placed by the CRTC on their ability to deem consent from customers to data sharing with affiliates. Yet, they insist that their only desire is to share personal information “among common-branded companies that provide a range of related communications services” (para.10).

11. If the Companies are to be granted greater flexibility in respect of deeming consent, it should be no greater than necessary to achieve their legitimate purposes. In other words, the disclosures permitted without written consent should be limited not only to affiliates, but to common-branded affiliates providing communications services.

12. Even in that case, however, (as with internal company use) it is ARC et al’s position that explicit consent is required unless the use or sharing is necessary to provide the product or service requested.

The Ekos survey and focus groups were designed and conducted in a rigorous and fair manner, so as to minimize any bias in responses

13. The Companies allege in para.4 that “ARC et al’s position is based on selective extracts from what the Companies would submit is a flawed survey”. This allegation is completely unfounded. First, ARC et al has provided the entire survey to the Commission, the Companies, and all other parties. It is freely available on the PIAC website. In contrast to the Companies, ARC et al have provided empirical evidence directly on point for the benefit of the Commission and all parties, and have provided full transparency in terms of the complete survey. In no way have ARC et al been selective about the results of the survey – the results are there for all interested parties to review and analyse.

14. Second, it is unclear in what way the Ekos survey is “flawed”. ARC et al encourage the Commission to review and analyse this survey with rigour. The methodology, questionnaire, and focus group guide were carefully developed so as to minimize any bias toward the positions already taken by consumer groups on these issues. For example, Ekos chose to use the term “opt-out” rather than the more widely recognized “negative option”, so as avoid the negative connotation associated with the latter.

15. Indeed, recognizing that the issues being tested were highly controversial, and that the survey results would be therefore be subject to intense scrutiny from parties adverse in interest to PIAC, a deliberate attempt was made to err on the side of biasing the survey and focus groups toward the positions of business interest groups.

16. The Companies weak attempt to dismiss the Ekos survey as “flawed” is contradicted, in any case, by their attempt to use the survey results to bolster their position. Either the survey results can be relied upon or they can’t; the Companies can’t have it both ways. ARC et al submit that the Ekos survey is a strong, reliable indication of Canadian consumer expectations and desires on the issues in question here.

The quantity of consumer complaints on point provide little indication of consumer views on this issue

17. The Companies argue that because they receive very few complaints about so-called “secondary marketing”, the Ekos survey results must be flawed (para.28). The problem with this argument is that it ignores (a) the fact that most consumers don’t bother to complain about such practices, even though they don’t like them, (b) the fact that most consumers will simply request a stop to such practices rather than complaining about them, and© as the Ekos survey shows, most consumers do not appreciate the information collection, use and sharing that underlies the direct marketing with which they are bombarded on a daily basis.

18. This is an area in which consumer interests are not reflected in market forces because of the combined factors of lack of information and the cost of action. As the Ekos survey shows, consumers are seriously under-informed as to the extent of information collection, use and sharing that currently pervades the marketplace. Of the few that are aware, the cost of making their objections known is simply too high. Much more than is the case with other issues directly affecting consumers, those who complain represent a tiny fraction of those who object, or who would object were they aware of the practices in question.

Yours truly,

original signature

Philippa Lawson

Counsel for ARC et al

encl.

cc: Interested Parties, PN 2001-60

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