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The case involved Facebook’s “Sponsored Stories” advertising program that Ms. Douez, as class representative, claimed used users’ names and likeness without their consent. The Sponsored Stories program enabled advertisers registered with Facebook to associate their name and identifiable mark with users who performed certain social actions such as “Liking” the advertiser’s page, creating a new “Sponsored” version of the social action. The Sponsored Story benefitted from increased exposure, as Facebook’s algorithm subsequently increased the likelihood that users’ friends would see the Sponsored Story on their home page. Facebook did not inform users when their likeness was used in association with a Sponsored Story, nor did it provide users an opportunity to opt out of the program.
Key issues before the Court were whether and to what uses of personal information users had consented, as well as jurisdictional issues concerning the BC Courts’ authority to deal with statutory claims brought pursuant to the legislation of a different province.
The Jurisdictional Challenge
On the issue of jurisdictional competency, Facebook pointed to the fact that Manitoba’s and Newfoundland and Labrador’s privacy statutes expressly designate the respective superior courts of each province to adjudicate claims for breach of the relevant statute. Facebook argued that the BC Court lacked the requisite jurisdiction to deal with claims brought pursuant to those privacy statutes.
The BC Court held that the exclusive jurisdiction clauses in the legislation did not preclude it from deciding claims under the respective privacy statutes, finding that as a matter of constitutional law, the provincial legislatures “lack legislative competence to prohibit. [the] Court from adjudicating claims … “On this point, the BC Court departed from the approach used elsewhere in Canada.
One key issue for determination was whether Facebook’s method of use of its users’ information was expressly or impliedly consented to. In this case, the privacy statutes all provided that the unauthorized use of a person’s name or likeness for advertising or promotional purposes is a tort, actionable without proof of damage. Significantly, the Court found that under the privacy statutes, the defendant bears the onus of proving consent as a defense once a plaintiff has established a
prima facie breach of the relevant legislation.
The Court also held that since users were not informed if or when their information was used for a Sponsored Story, the evidence did not support an inference of implied consent.
The BC Court’s Conclusion
On the issue of liability, the Court concluded that Facebook’s failure to obtain either express or implied consent to use class members’ information in Sponsored Stories contravened the requirements of the provincial legislation, finding the company liable for statutory breach.
While the Court found that the common issues of liability were appropriately determined by way of summary judgment, it deferred issues relating to damages to determination by way of conventional trial.
While many privacy class actions have been certified, the class action in Douez v. Facebook reaching a trial decision (albeit a summary trial) is unusual. As an Ontario judge previously noted, class members have been “confronted with ultra-enormous difficulty in establishing specific causation” and have instead been forced to settle for “very modest” per capita recoveries for class members “.1 If it does not settle, the trial for damages in this case will be closely watched by many interested parties.
For further information about this decision or its potential impacts, please contact any member of our Privacy and Data Protection Group.
The author would like to thank Roy Friedman, Articling Student-At-Law, for his assistance in writing this Update.
1 Karasik v. Yahoo! Inc., 2021 ONSC 1063 at para. 139
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
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