[Ecommerce] Story on Privacy, Terms of Services, and other e-consumer issues

[Manon Anne Ress]

Nancy Carter, a Toronto-based freelance TV producer has been battling 
U.S.-based Inter.net Group for the past 16 months over a billing dispute 
she says may have cost her a lucrative job opportunity. Now she wants to 
sue for damages over a policy that led Inter.net's Canadian subsidiary 
to keep her ISP account open for incoming e-mail even while denying her 
access to the account...

The story best told by Nancy Carter herself is about privacy, contract 
of adhesion, and many other e-consumer issues that are becoming frequent.

Nancy's lawsuit has had media attention in Canada (including two 
national newspapers, and both national television and radio interviews). 
  Her case has also been the subject of news, legal and information 
technology discussion groups on the internet as far away as New Zealand, 
Russia, Eastern Europe, and South America.  The industry is very alert 
to the facts of the case and this has already changed the ways they do 
business in fundamental ways.  All ISPs in Canada have already changed 
their Terms of Service to make this practice explicit (in Canada, it is 
illegal for the ISPs to keep the email messages unless it's in the terms 
of services).  More importantly, one of the largest ISPs has recently 
abandoned the practice altogether.

A summary of her story is available in this news article:
http://news.com.com/2100-1023-963631.html?tag=fd_lede2_hed

Nancy Carter wrote:

"By taking my case into court I want to send the message to the ISP 
industry worldwide that they must stop seizing customer's email in order 
to use it to leverage payment.  While our Privacy Commissioner, in his 
Report of Finding on my complaint, has recommended that all ISP's cease 
doing this immediately, the industry has not complied.  It's clear to me 
that I must continue pursuing this issue through the courts where I will 
address a raft of interpretive arguments about the legal status of email.

My court documents, including my affidavit and exhibits are posted on 
the website: http://www.lexinformatica.org/liability/carter/.  This link 
has a copy of the letter stating the company will take legal action 
against me for going public with my story.

Here are the key points I will be focusing on in court:

Who owns my email?

If the ISP industry wants to take the position that email is personal 
property, they are saying they have the ability to declare an interest 
in that piece of property, and to seize it.  As a business you might do 
this when you have a billing dispute with a consumer.   However, these 
liens tend to be circumscribed in legislative structures: the business 
that is exercising the lien has a responsibility to take good care of 
goods in the meantime to ensure that they aren't damaged, that they 
don't depreciate in value.

The problem with this is that email is person-to-person communication. 
It is in the nature of a communication that you can't put it 'on the 
shelf' without depreciating its value.  As is the legal requirement for 
a car mechanic's lien, the mechanic can hang on to your car but must 
keep it well stored during that time to ensure that the loss in value to 
your car is negligible.  When you do get your car back, you may have 
been deprived by not having use of it, but you do get the value that was 
stored.

Communications are a very different creature: what is the value of an 
invitation to contact a producer about a job opening?  Communication is 
very time-sensitive in its value, whether it's a bill, or a notice that 
your favourite store has a sale on, or an invitation to a party.  The 
value of a communication lies, not in themselves, but in the actions 
that arise from them.  It's like a five cent bolt that in itself is just 
worth a nickel, but if it's being couriered somewhere because you need 
to put it into the plane before the plane can fly, the actual 
consequences of it not arriving are much more than five cents.

Communications do, much more often than goods, fall into under the 
circumstance where the value at stake to the parties goes beyond the 
apparent value of what the ISP is actually holding onto.  What is the 
value of a piece of email vs. what is the value that might flow to the 
sender or the recipient?  This is why the application of the rules 
around property is questionable.  They may be useful to examine how 
repairers and storers and others are required to carry on their 
activities when they try to assert these sorts of liens.  But you must 
come back to the question of is it even proper to treat a communication 
under this kind of model?

Conceptually, what the ISPs want to do is similar to a 'carrier's lien': 
a trucking company says 'you haven't paid me for what I'm shipping'. 
The Uniform Liens Act contains a well accepted doctrine that there are 
services that you provide in respect of goods that add value to the 
goods - and in this way become part of the good.  This includes 
repairing a good, storing it, and transporting it.  That's why it may be 
reasonable in those instances for this kind of business to use 
possession of the good to try to enforce payment.  Generally speaking, 
if you have a dispute with a business and they want payment from you, 
then off to collection agencies and/or court they go.  Ordinarily they 
can't just hold on to your property.  What makes it special in certain 
cases is that a business can hold on to your property it's because they 
provided a service that you requested with respect to that specific 
piece of property and the service is now bound up in the value of that 
property.

What's interesting is that all of these regimes for goods that recognize 
liens of this kind are that the liens are not created by contracts, 
they're created by statutes.  The liens and their statutory regimes 
include dispute settlement processes.  For example: you have a dispute 
with your repairer about a $500.00 car repair bill. However, your car is 
worth $12,000.00.  The repairer hangs on to your car in your dispute 
over the payment which means you're subjected to $12,000 worth of 
pressure over $500.  The safety valve that legislative regimes offer for 
liens in this case is called 'payment into court': you pay the $500 into 
court, so the issue is no longer that you are not willing to pay the 
bill, the issue is reduced back down to $500, not $12,000.  You have 
your car back and you and your repairer continue to argue, but now it's 
clear you’re arguing about the $500.  Plus you’re not just stuck dealing 
with the repairer, there's a process for getting to a third party to 
examine and assist with the dispute.

This is the Australian Telecom Industry Ombudsman model: in a payment 
dispute with your ISP, the customer pays the disputed amount to the TIO 
to get their email back then argues the dispute through that office. 
This model of how goods are handled is a very widespread and 
longstanding system for how to resolve disputes of this kind over goods. 
  This is why there is Uniform Legislation outlining how it should be 
done.  Still, this doesn't address the issue of whether you think, as a 
communication, email should be subject to seizure at all.

We should always wary in the internet realm of overworking analogies to 
the material world.  People always want to say 'well, it’s just like 
this', but the truth is it's never just like that, every analogy falls 
down somewhere.  However, at the higher level of principal, the model 
that's evolved for disputes around goods is put in place to protect both 
parties.  I can see the ISPs position that, like a carrier of goods, 
they have provided value that's intrinsically bound up in the email in 
transporting it from A to B.  There's a certain logic here.  But if you 
follow that logic through to the end of the road, you get to the core 
issue; should the customer be left arguing a bill that may be worth less 
in value than the value of the email, and its consequences, without 
resort to a third party?  More importantly, if generally it's the 
responsibility of the party that's holding on to something to ensure 
that it doesn't degrade in value, can you meet that responsibility with 
respect to a communication?  If you can't, then the whole application of 
this model starts to fall down.

My lawsuit:

The time has come for these and other interpretive arguments to be 
addressed by the courts.  From a business perspective, we are seeing 
legislation passed across Canada that advances the use of email further. 
  One example is the business community wanting to push the adoption of 
electronic billing.  They wish to be able to rely upon the fact that 
'you're now 30 days past due on your last bill' and that infrastructure 
requires that the business community be able to rely that courts will 
accept that when you have emailed things to people they have been 
received.  It's ironic that it would be a consumer that was getting 
behind in their bills who would be the consumer who was having their 
email account suspended.

Throughout common law courts there is a willingness to look into the 
propriety and conscionability of terms that are in contracts of 
adhesion.  They're more willing to look at the question of 'is that just 
a fundamentally unfair term?'  By contrast, if the two parties actually 
were dickering back and forth and the contract were written by the two 
of them together, the court would be less willing to look into the terms 
of the contract.

With the way email has entered our lives we need to think more about 
this routine policy and practice of ISPs collecting and withholding 
email and ask what the right principals to apply to it are.   There are 
some 10 billion person-to-person emails sent every day worldwide.  I 
think it's time for the law to catch up with this reality and to 
determine, secure and protect the legal status of email communication.

In my situation the critical information about account suspension, that 
the email address would stand open without my having access to it, 
wasn't disclosed to customers of Inter.net Canada Ltd in their Terms of 
Service.  It wasn’t available until after I filed my complaint with the 
Privacy Commissioner and the company changed their ToS.  If customers 
don't know it's happening, they can't ask the questions.  My 
understanding, from the limited amount of direct research I have done, 
and from the Canadian Association of Internet Providers (CAIP), is that 
this is standard practice in the industry.  When I called ISP's to ask 
about their policy and practice with regard to this, it was very 
difficult to get a clear answer.  Often sales reps and their supervisors 
seemed to genuinely not know about their policy in this and I was often 
given incorrect information.  In a number of cases I had to contact the 
regulatory law department and speak to their lawyers.  So, unless you 
spent hours and days trying to get answers to questions that only 
lawyers at many ISPs can answer, you don't have much of an option for 
taking your business elsewhere.  Though this seems to be changing: one 
of the largest ISPs in Canada, Sympatico, has recently discontinued this 
policy.  I also understand that you can access your rogers@home email 
from a remote computer if they cut you off.

In the weeks after it happened, I received an email response to my 
complaint from the Chairman of the Board of Directors of CAIP.  He 
stated that his own ISP company did this routinely, though they would 
give the email back if the customer asked for it.  He described it as a 
way to 'nudge' the customer for payment.  I was also told the following 
by a VP of Marketing at a large ISP:  'Nancy, you have to understand the 
business perspective in this situation.  When an account goes into 
arrears we want two things: 1) to collect our overdue money, and 2) to 
keep the customer who has great value to us.  If we shut down their 
account and bounced all their email, what is the incentive on the 
customer to pay us?  They won't, they'll simply not pay their bill and 
go down the street to the next ISP for their service.'  I understand the 
industry refers to this problem as 'churn'.  Despite the usefulness of 
this policy as an account resolution tool, I would suggest a ‘nudge’ 
might be when you can no longer send email or surf the net – but taking 
customer’s email is a great big whack on the head.

The ISP industry argues hard against any Government rules and 
regulation, insisting that market forces make everyone behave well. 
However, five months after I filed my complaint with the Federal Privacy 
Commissioner, Inter.net Canada Ltd. had their lawyer, Karl Delwaide of 
Fasken Martineau DuMoulin, email me a letter stating that because I had 
brought my complaint "to the attention of various associations or 
governmental bodies such as the Canadian Association of Internet 
Providers, Industrie Canada, the federal Privacy Commissioner and the 
federal Department of Justice" and that these actions are "clearly 
abusive and constitute harassment of our client".  He goes on to tell me 
that Inter.net Canada Ltd. "will take action against you to recover any 
and all damages that it will suffer as a result of your actions".

This letter threatens me with what is known as a SLAPP (Strategic 
Lawsuit Against Public Participation).  Fifteen US States have 
anti-SLAPP legislation because this tactic is recognized as an abuse of 
libel law and an abuse of the courts.  While I certainly understand why 
Inter.net Canada Ltd. would want to have the circumstances of my dispute 
withheld from the public eye, nevertheless it is my right to bring this 
issue to both government and public attention (through media).  This is 
one of the key ways effective marketplace discipline is achieved: by 
informing other consumers of my experience and by bringing gaps in 
legislation to the attention of appropriate branches of government. 
Defamation and libel laws prohibit us from harming another by lying, not 
from bringing forward facts.

This letter also captures the problems inherent in this issue remarkably 
well: it was sent to me *via email* and the firm's own disclaimer on the 
message states ...'the use of e-mail is considered by the firm as an 
adequate means of communication, equivalent to regular mail'.

I don't think that there is a single democracy in the world that allows 
for the interception of personal communication without a warrant.  This 
principal is deeply ingrained in our social consciousness; not only do 
the customs of society enforce our expectation that private 
communication will not be intercepted, statute laws are in place to 
guarantee it.  As a senior official at Industry Canada put it: "Laws 
regarding interference with the mails were put into place to ensure 
confidence in a system which is fundamentally important to the pursuit 
of commerce and to limit the potential collateral damage from 
non-delivery of important messages"

It's on these well established principals that we have built many of the 
fundamental elements of our social, economic and cultural 
infrastructure.  That the majority of ISPs are acting in contradiction 
of these basic principals when they deliberately intercept and withhold 
communication is a serious concern.  The claim by ISPs that this 
practice is a 'service' that benefits the majority of their customers 
whose accounts they have suspended seems to me, at best, disingenuous.

I don't, and nor will the courts, expect ISPs to provide service to 
accounts that are in default.  Taking my case against Inter.net Canada 
Ltd. to Federal Court is to address the *purposeful* collection and 
retention of customer’s email after they are shut out of their account. 
  It focuses on two goals: 1) I believe I was harmed by Inter.net's 
action and am asking the court for damages that I have mitigated 
appropriately, and 2) In the face of overwhelming societal norms, 
existing statute law, and the Privacy Commissioner's Report of Finding 
recommending this practice be immediately ceased , ISPs continue to 
intercept communication on a daily basis saying it is their right. 
Asking the court for punitive damages is an appropriate and effective 
way to establish and convey ISPs liability in the use of this policy - 
even in punitive-reticent Canada.  Nothing says I'll get them, but it is 
important to ask and argue for them.

In conclusion, this policy of seizing customer's email and using it to 
leverage payment from customers is standard practice in the ISP industry 
throughout the world.  The fact that the largest ISP in Canada, 
Sympatico, has discontinued the practice since I began my pursuit of 
this issue indicates that change can be made by bringing this issue to 
public attention through media and the courts."

Nancy Carter
Phone: 416-653-8862
Fax: 416-653-8406
E-mail: nancar@sympatico.ca



-- 
Manon Anne Ress
Consumer Project on Technology
www.cptech.org
PO Box 19367, Washington, DC 20036
manon.ress@cptech.org, voice: 1.202.387.8030, fax: 1.202.234.5176