The Supreme Court of Canada issued a landmark decision this morning on the enforceability of forum selection clauses in online contracts, rejecting Facebook’s effort to block a privacy class action lawsuit in British Columbia on the grounds that its own contract specified that legal actions be brought in California. A divided court ruled that the unequal bargaining power between consumers and companies such as Facebook – combined with the importance of privacy rights – meant that the clause should not be enforced and that the lawsuit should proceed in Canada.
The decision represents a clear recognition that courts should not be quick to allow companies to contract out of important rights by ousting local laws through forum selection clauses. More broadly, the terms found within non-negotiated take-it-or-leave it clickwrap contracts should not always be enforced by the courts, particularly where important rights or remedies might be lost by doing so. While forum selection clauses are an obvious mechanism for restricting rights, the reasoning might also be applied to other online contractual terms that seek to override important laws and protections. These could include contractual terms that seek to override copyright user rights such as fair dealing or local consumer safeguards.
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One week after the B.C. Court of Appeal ruled that it could order Google to remove websites from its global index, the same court (but different judges) ruled that a privacy class action lawsuit against Facebook could not proceed in the province because the Facebook terms and conditions provide that all disputes must be resolved in a court in Santa Clara, California. The decision should provide a wake-up call to users and policy makers because an absolute approach to terms and conditions not only means that Canadian courts may be unable resolve consumer disputes involving companies like Facebook, but that Canadian law will not apply either.
The current Facebook terms and conditions state:
You will resolve any claim, cause of action or dispute (claim) you have with us arising out of or relating to this Statement or Facebook exclusively in the U.S. District Court for the Northern District of California or a state court located in San Mateo County, and you agree to submit to the personal jurisdiction of such courts for the purpose of litigating all such claims. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions.
While this appears to be slightly different from the terms that governed the dispute before the B.C. courts (it referenced courts in Santa Clara county), the key takeaway from the decision goes well beyond a proposed class action lawsuit over a Facebook “sponsored stories” program that no longer exists. The trial judge rightly noted that the heart of the case is whether online terms and conditions override domestic legal protections (in this case, the B.C. Privacy Act).
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Over the past couple of days, there has been mounting attention on the application of Quebec language laws to a Facebook page. The issue arose when the OQLF advised a Chelsea boutique that they had received a complaint about its English-only Facebook page. While many are reacting with alarm, the reality is that Quebec’s language enforcement body has applied the law to websites for many years.
Complaints about the issue date back at least 15 years, when a complaint was filed against an English-only photography website. While a Montreal lawyer claims the issue has not been challenged in court, the issue was in fact litigated in Reid v. Court of Quebec, a case involving the online sale of maple syrup. The Quebec Superior Court upheld the application of the language laws to the Internet ruling that the law applied to commercial publications and that included websites. Further complaints seem to pop up every few years (presumably because the system is complaints-based), but the legal analysis is pretty straightforward. The law applies to all commercial publications – including websites – involving a business with a Quebec location or address that is selling goods or services. The location of the server or even the intended audience is irrelevant – what matters is the real-space location of the business.
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A story on Facebook and its efforts to counter child pornography reveals that the social network scans all uploaded photos. According to the article, “every picture uploaded by Facebook users is run through a program called â€œPhoto DNA,â€ he said, to look for possible matches with offenders. The company saves […]
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SOCAN has filed an application with the Copyright Board of Canada for interim tariff to cover royalties for the communication to the public by telecommunication of musical works in connection with movie/tv streaming and user generated content sites. The obvious targets of the interim tariff are some of the biggest […]
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