Has Canada Title IX

E-Commerce and Consumer Law in Canada

In Germany and the EU there is quite extensive consumer protection as well as a large number of regulations on e-commerce. But how does this look in other countries? Are there any effective online contracts, cancellation rights and information obligations for web shop operators outside of the EU? The IT law firm dares to look across the Atlantic and provides an overview of Canadian consumer protection and e-commerce law.

I. Canada is currently expanding consumer protection in e-commerce

Regulations on e-commerce, as they exist in Europe in particular under EU law, do not exist in Canada to the same extent and the same density of regulations. However, many aspects of e-commerce are regulated - often not at the federal level, but at least in the individual states of Canada, called the provinces.

After a lengthy legislative process called "Canada's new anti-spam legislation" (CASL for short), new regulations for commercial electronic communications will come into effect on July 1, 2014 across Canada Force. Above all, it regulates the situations in which senders are allowed to contact certain recipients electronically; this applies in particular to the relationship between entrepreneurs and consumers. As a rule of thumb, as in Germany, contact can usually only be made electronically if the recipient has given his consent in advance. However, there are also some exceptions.

Canadian e-commerce law covers a variety of legal topics. In e-commerce, for example, it is about online contracting (= conclusion of contracts on the Internet), internet sales contracts (= purchase contracts on the Internet), protection of personal information (= data protection), consumer protection online (= consumer protection on the Internet), web-based -competition (= competition on the Internet), digital signatures (= digital signatures), deceptive advertising (= misleading advertising), specific disclosure requirements (= special information requirements) and the already mentioned canada's new anti-spam legislation (= Canada's new anti-spam Legislation).

II. Canadian Common Law

In Canada, as in Great Britain and the USA, the so-called common law (= customary law) or case law (= case law or precedent law) applies. This right is based in principle on precedent decisions made by the courts. In contrast to continental European law, the law in common law is not regularly set out in the abstract on a large scale in law books, but only develops through the individual cases that the courts have to decide.

Nevertheless, of course, common law also has laws that are enacted by a parliament in order to regulate certain areas in a meaningful and uniform manner as a whole. In this way, Canada and its individual provinces have enacted regulations in the areas of e-commerce, consumer protection and fair trading.

III. The division into Federal and Provincial Law

Canada is provincial - it consists of ten provinces and three so-called territories. The individual provinces such as British Columbia, Ontario or Quebec have a large number of their own legislative powers, which they have extensively exercised in the area of ​​e-commerce and consumer protection.

The legislative autonomy of the individual provinces is significantly higher than that of the individual German federal states. This means that in the field of e-commerce in the individual provinces of Canada different regulations apply, even if there is a common line and content-related agreements. In any case, a complete picture of Canadian consumer protection and e-commerce law can only be obtained by looking at the different legal bases from the various provinces.

The point of contact for the application of consumer protection law in a Canadian province is usually the place of residence of the consumer concerned: for example, if a consumer lives in the province of Ontario, which with twelve million inhabitants is the most populous and therefore the most attractive and interesting province in Canada in terms of sales of goods Consumers rely on Ontario consumer protection laws.

IV. Internet contracts under Canadian law

The so-called Personal Information Protection and Electronic Documents Act (= law for the protection of personal data and electronic documents) applies in Canada as federal law. The core message of the law is that contracts can in principle also be concluded using electronic media - for example by e-mail or on the Internet. However, the written form has not been abolished in Canada either: in many situations, documents must continue to be available in paper and written form.

The Electronic Commerce Act, 2000 (= law on electronic commerce) also applies in the province of Ontario. It also stipulates that the electronic form can generally replace other forms such as the written form requirement. It also stipulates the conditions under which the written form requirement remains.

In addition, the law deals with the requirements for the storage, reliability and integrity of electronic documents as well as other aspects of handling electronic documents.

V. Consumer Protection Regulations

Consumer protection in Canada is generally not uniform for the entire country at the federal level, but rather in the individual provinces and territories.

At the federal level there are therefore only very few regulations. The following is a brief overview of the consumer protection regulations of the individual provinces. Consumer protection is often independent of the question of whether the consumer has concluded the contract on the Internet or in a shop - both here and there, the consumer can invoke the consumer protection regulations.

1. Consumer Protection in the Province of Ontario

In Ontario, the most populous province of Canada, the Consumer Protection Act, 2002 (= Consumer Protection Act) applies, which contains consumer protection regulations for those consumers who are in Ontario at the time of the conclusion of the contract (Article 2) - for example because they do something there Buy from a retail store or order from a webshop on the Internet.

Furthermore, it is stipulated that the delivery of goods that have not been ordered does not give rise to any claims (Article 13); In addition, there are regulations on credit transactions (Article 21 ff.), information requirements for internet agreements (= transactions on the Internet) between a consumer and an entrepreneur (Article 37 ff.) as well as procedural rules for legal remedies by consumers.

In summary, consumers from Ontario have the following (not exhaustive) rights in the context of consumer contracts:

a. In the case of consumer agreements, the entrepreneur must always disclose all information relevant to the consumer. If he does not do this, the consumer has a right of withdrawal for 30 days, with which he can withdraw from the contract.

b. For door-to-door sales (but not for contracts concluded on the Internet) there is a so-called cooling-off period (= withdrawal period) of 10 days if the purchase price is more than 50 CAD (= Canadian dollars).

c. The consumer is also entitled to a right of withdrawal if the delivery of a purchased product has still not taken place more than 30 days after the agreed delivery date, unless the consumer has accepted the delay in delivery.

d. So-called future contracts (= futures contracts) for an equivalent value of more than CAD 50 must be in writing to be effective; the electronic form is therefore not sufficient here.

e. Contractual clauses must be clear and understandable - their interpretation is always in favor of the respective consumer, i.e. to the disadvantage of the entrepreneur, similar to how this is also regulated in German general terms and conditions law.

f. If an entrepreneur withholds certain information from a consumer when concluding a contract, which he should have given the consumer (“unfair practice”), the consumer has a kind of right of avoidance which he can exercise within a period of one year.

Examples of unfair practice are the promotion of alleged properties of a product that this product actually does not have, deception about the availability of a product, the use of contract terms that are inadequate for the consumer and the unlawful threat to induce the consumer to conclude a contract.

G. It is also interesting that legal violations of consumer protection norms can result not only in civil law, but also, above all, criminal law consequences such as fines or even imprisonment - there is therefore very strict consumer protection under criminal law.

2. Consumer protection in the province of Saskatchewan

Similar consumer protection regulations for internet sales contracts as in Ontario can also be found in the significantly less populous province of Saskatchewan.

  • The scope of Saskatchewan's consumer protection regulations includes Saskatchewan residents and anyone else who purchases more than $ 50 worth of goods or services online from Saskatchewan-based companies.
  • Entrepreneurs must inform consumers about certain information when concluding a contract on the Internet, in particular about possible additional fees and their amount.
  • The consumer has a right of withdrawal from the time the contract is concluded on the Internet up to seven days after receipt of the written or electronic copy of the contract text if the entrepreneur has violated the information obligations or did not give the consumer the opportunity to reject the contract when concluding the contract on the Internet accept or correct input errors.
  • The consumer is also entitled to such a right of withdrawal up to 30 days after the conclusion of the contract on the Internet if the entrepreneur has not provided the consumer with a written or electronic copy of the contract text no later than 15 days after the conclusion of the contract.
  • In addition, the consumer has a right of withdrawal if the delivery of a purchased product has still not taken place more than 30 days after the agreed delivery date, unless the consumer has accepted the delay in delivery.
  • In addition, consumers in Saskatchewan have so-called statutory warranties (= statutory warranty rights) that the seller must grant them when the contract is concluded. This includes: the purchased product must have been the property of the seller, (at least) be of average quality, match the stored product description, be durable and be suitable for the intended use; spare parts must also be available for a reasonable period of time.

3. Consumer Protection in the Province of Alberta

The province of Alberta also has special consumer protection regulations that apply to internet sales contracts.

a. Entrepreneurs have to make certain information available to consumers. This concerns:

  • the company's contact details such as its business name (company), business address, telephone number and email address
  • a truthful description of the goods and services to be purchased
  • the indication of costs such as shipping costs, taxes, commissions, customs fees, etc.
  • the terms and conditions (= general terms and conditions) and payment methods
  • the delivery date and the supplier with whom the delivery is expected to take place, including the relevant delivery conditions
  • the cancellation and return conditions, if the entrepreneur grants the consumer corresponding rights

b. The entrepreneur must present this information in a clear and understandable way as well as clearly and easily findable in the web shop.

  • In Saskatchewan, too, the entrepreneur must provide the consumer with a written or electronic copy of the contract text on the Internet within 15 days of the conclusion of the contract.
  • The Alberta consumer also has the same right of withdrawal as the Saskatchewan consumer.

In the event of cancellation, the entrepreneur has to refund the purchase price to the consumer within 15 days. If the entrepreneur does not do this, the consumer can instruct his own credit card company to cancel the corresponding payment and to book it back.

VI. Canadian Regulations Against Unfair Competition in E-Commerce

Canadian law also contains provisions against unfair competition - comparable to the provisions of the German UWG (= law against unfair competition).

- At the federal level in Canada, the Competition Act (= Competition Act) applies, which contains in particular provisions against misleading advertising and deceptive business practices.
Partly comparable to the German UWG (= law against unfair competition), this is intended to encourage web shop operators not to provide any false information about the goods or services offered for sale on the Internet. Violations of competition law can then have consequences under both civil and criminal law.
- In addition, the so-called anti-spam law passed in December 2013 contains, among other things, Regulations regarding false or misleading advertising.
- There are also competition law regulations in the various provinces of Canada. For example, the Consumer Protection Act, 2002 (= Consumer Protection Act) of the province of Ontario also contains a ban on misleading (Article 14) or otherwise unlawful advertising (Article 15).

VII. Data protection law

Canada's data protection law is quite fragmented - parts of it can be found in provincial law, other parts are regulated at the federal level. Whether provincial or federal law is applied to a particular issue is often decided on the basis of whether the company concerned is licensed under provincial or federal law. However, this delimitation is not particularly clear, the areas of application partially overlap.

  • Federal law applies across Canada to the Personal Information Protection and Electronic Documents Act, 2000 (PIPEDA for short). The law contains some provisions relating to the storage, processing and other use and handling of personal data.
  • The new anti-spam law, which was recently passed in December 2013, also contains further data protection regulations.

VIII. Canada's New Anti-Spam Act

As federal law in December 2013, the new Canadian anti-spam law is part of Canada's new anti-spam legislation (CASL for short), the first parts of which are to come into force on July 1, 2014. It took several years, almost decades, to come to an agreement on this nationwide regulation after much back and forth between the various interest groups.

The Anti-Spam Act contains, in particular, regulations on making contact electronically - regardless of whether it is about the C2B or B2B area. The following applies in principle: Senders of business electronic messages may only contact other people in Canada by email, instant message, etc. if the recipient has expressly consented to being contacted in advance (opt-in procedure). There are exceptions, however, among others. when a business relationship has already existed between the entrepreneur and the consumer.

Violations of the new law can have both civil and criminal penalties, with the result that the authorities can impose fines of up to Canadian $ 10 million for violations. On the other hand, consumers are also able to take civil law measures in the form of private actions.

An overview of the core provisions of the new anti-spam law, which will apply across Canada from mid-2014:

  • The law covers commercial electronic messages (CEM for short) such as e-mails or instant messages if they have been sent in Canada. It is still unclear whether this includes data and information in social media networks or blogs.
  • Internal company communication, such as e-mails from an employer to its employees or e-mails between colleagues, is excluded from the scope of the anti-spam law. Responses to inquiries or complaints from customers are also not covered by the strict provisions of the law. Also not affected by the law are electronic messages for which the sender could legitimately expect that the message would not be read in Canada (for example if a US citizen is in Canada while reading an email on his smartphone stops).
  • The sender may only contact the recipient via CEM if the recipient has given the sender express or tacit permission to do so in advance. The sender must clearly state the purpose of the communication to the recipient in advance.The sender must also disclose their own contact details, such as their name and address. In addition, he must give the recipient the opportunity to revoke his consent later and inform the recipient of this possibility.
  • For an express consent it is necessary that the recipient gives his consent actively and consciously. So-called pre-checked boxes, e.g. B. in the context of an Internet order process, are therefore not compliant with the law.
  • It should be possible to assume tacit consent from the recipient if there is already business or non-business contact between the sender and the recipient and there is no indication that the recipient is rejecting unsolicited CEM. The sender can also assume that the recipient agrees if the recipient has given the sender their own electronic address (e.g. e-mail address) without making it clear that the recipient does not wish to be contacted about this.
  • For the admissibility of so-called refer-a-friend promotions (= recommendations for friends), a special (business, family or personal) relationship is required between the person making the recommendation and the company that sends the commercial electronic message, as well as between the company and the recipient of the message.
  • The new anti-spam law also contains regulations for apps and computer programs. For example, a company may not transfer or install any apps or computer programs on their device without the consent of the device user.

IX. Conclusion

Canadian e-commerce and consumer protection law for contracts on the Internet is a big patchwork quilt. On the one hand, this is due to the fact that the relevant legislative powers are confused and distributed among the federal government and the individual provinces. On the other hand, there is no uniform code of law, but rather individual laws for certain areas, some of which complement each other, but also overlap.

However, the core of consumer protection in Canada is ultimately not that fundamentally different from that in Germany.

  • According to Canadian law, contracts concluded on the Internet are basically just as valid as in the real world, even if the written form continues to apply for certain contracts.
  • Commercial electronic messages such as advertising e-mails etc. may not be sent to the recipient without the recipient's express consent.
  • In the case of contracts on the Internet, entrepreneurs have to comply with information obligations towards consumers. In addition, the consumer has a kind of right of withdrawal if the entrepreneur delivers too late or has not complied with his information obligations.
  • To protect consumers and competitors, misleading advertising is also prohibited in Canada.
  • Interestingly, many violations of consumer protection or fair trading regulations not only offer civil protection in such a way that those affected can file private lawsuits, but also criminal protection: authorities can impose fines of up to ten million Canadian dollars.

In the event of problems, queries and other questions on this topic, the team at the IT law firm will of course be happy to help you personally and in individual cases.

tip: Do you have any questions about the contribution? Feel free to discuss this with us in the entrepreneurial group of the IT law firm on Facebook.

Daniel Huber
(freelance legal employee of the IT law firm)