The Amazon Section 11 Order

In June 2024, in the context of an inquiry into whether Amazon may be engaging in reviewable deceptive marketing practices by permitting “fake reviews” on its website, the Commissioner applied to the Federal Court for a section 11 order requiring Amazon to produce extensive transaction data relating to products offered for sale on its online store. The Commissioner applied for the order more than two years after commencing the inquiry.

The Bureau provided Amazon’s counsel with a draft order that would require Amazon to produce, among other things, extensive transaction data across more than 30 data fields for products in four broad product categories – namely, “Health and Personal Care, Home and Kitchen, Tools and Home Improvement, and Electronics.” Amazon objected on the basis that this data production requirement was “exceedingly broad, excessive, and unnecessarily burdensome,” claiming that there were “billions of products offered in the four specified categories.” The Commissioner nevertheless applied for an order that included this data requirement. The judge hearing the application issued an order requiring Amazon to produce other documents and information sought by the Bureau, but asked the Commissioner to consult with Amazon to clarify the number of records that Amazon would have to produce under the requested data production order, and to address Amazon’s concerns. At a subsequent hearing, the application judge continued to express uncertainty about the reasonableness of seeking data fields potentially capturing billions of products. The judge dismissed the application for a further data production order because the Commissioner had failed to adequately consult with Amazon or otherwise sufficiently explain the scope of the data request. The Commissioner appealed that decision to the Federal Court of Appeal.

Prior case law, relying partly on the protection against unreasonable search and seizure in section 8 of the Canadian Charter of Rights and Freedoms, had established that, before issuing a section 11 order, an application judge must be satisfied of the following:

(1) An inquiry is in fact being made; this is normally an uncontentious question of fact.

(2) The Commissioner has provided full and frank disclosure to the court; in 2008, a judge quashed a section 11 order when the judge subsequently found that the Commissioner’s disclosure had been so misleading, inaccurate and incomplete that the judge would not have issued the order had adequate disclosure been made of (i) the degree of overlap between the requested order and information previously produced by the respondent or otherwise already in the possession of the Bureau, (ii) a prior Bureau representation that it believed earlier section 11 orders against the same respondent would likely be sufficient for its inquiry, and (iii) certain concerns articulated by the respondent.

(3) The information or records described in the order being sought are relevant to the inquiry in question.

(4) The scope of such information or records is not excessive, disproportionate or unnecessarily burdensome.

The last two criteria were the focus of the Court of Appeal’s decision in Amazon.

Initially, the Court recognized that, under the Charter, Amazon had an information privacy interest in its records, and an application judge has authority to ensure that the Commissioner’s investigative powers are exercised in compliance with the Charter. Notably, the Court observed the following

“[E]ven where the records are relevant to the Commissioner’s inquiry, the application judge retains a residual discretion to refuse the requested production order. The contours of this discretion are defined by section 8 [of the Charter]. Authorizing judges must evaluate the impact on the subject of the search or the seizure and determine whether ‘in a particular situation the public’s interest in being left alone by government must give way to the government’s interest in intruding on the [subject’s] privacy in order to advance its goals.’” [emphasis added]

The Court viewed the assessment to determine whether a requested order is “excessive, disproportionate or unduly burdensome” as involving an evaluation of “whether the information requested by the Commissioner exceeds what is reasonably required for purposes of the inquiry and is overbroad given the nature of the inquiry or unjustifiably intrudes on the privacy interests of the target.” The Court also said that (i) the reasonableness of a section 11 order is to be evaluated by reference to the respondent’s expectation of privacy and (ii) the potential intrusiveness of the order is a relevant factor for that assessment. Indeed, the Court recognized that the Charter meaningfully constrains the Commissioner’s ability to require the production of business records, even though the privacy interest in business records is “minimal” relative to the privacy interest in more intimate personal records.

The Court expressed some reservations that prior case law may have gone too far in holding that section 11 production orders should be limited by the efforts or costs imposed on the respondent, the difficulty of responding, or the respondent’s economic interests. However, in this case, the Commissioner had failed to demonstrate that the data request was reasonable, having regard to the nature of the inquiry because of the uncertain scope of the request – the application judge did not know the extent of what the Commissioner sought to have produced under the order. With the broad group of products and no estimate of the volume of data within the scope of the data request, the application judge could not meaningfully assess whether the data request was excessive relative to what the Commission reasonably needed for the inquiry. Implicitly, the Court recognized that, at some threshold, a large data request would constitute an unreasonable invasion of Amazon’s privacy – even if the requested information were relevant to the inquiry.

In reaching its decision, the Court was not swayed by the Commissioner’s assertions that “Section 8 of the Charter does not protect against intrusions into business interests” and the Commissioner is “entitled to receive “all materials which might shed light on the circumstances of an event” which the Commissioner has reason to believe is contrary to the Act.”

Court Clarifies Requirements for Production Orders Under Canada’s Competition Act

En cours de traduction