Cost ruling hurts TekSavvy

Mar 24 • Business, Feature StoryNo Comments on Cost ruling hurts TekSavvy

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TekSavvy Solution’s efforts to protect the privacy of its customers proved costly recently, to the tune of about $325,000.

A federal court ordered Voltage Pictures to pay the Chatham company $21,500 in regards to its legal battle on behalf of “John and Jane Does.” TekSavvy spent $346,000 fighting to protect the privacy of more than 2,000 nameless clients, Bram Abramson, chief legal officer for the local company said.

In 2011 and 2012, Voltage, a U.S. film distribution company, filed in Canadian court to obtain personal information of certain customers of Canadian Internet Service Providers (ISPs), including TekSavvy, Bell Canada and Cogeco. Voltage alleged these people had used their Internet accounts to illegally download content.

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Abramson said the court is only ordering Voltage to pay back about 6% of what TekSavvy spent.

“We just thought it was a very narrow reading that doesn’t help customers who are worried about their privacy,” he said. “It doesn’t even cover our legal bills, never mind all the work we did internally. This was a very major undertaking for our company. The irony was taking steps to protect our users’ privacy rights was something the court said it did not feel up to being included in the cost order.”

Abramson said of the $346,000 TekSavvy spent in regards to the dispute, $178,000 was directly related to legal costs.

“It was a long-running saga,” he said. “A lot of that went into seeking advice and how to inform our users, and to ensure they get warned and have the time to be warned so they could take any action they deemed necessary.”

Another $108,000 came in the form of administration costs he said.

“Part of it was looking up information we were required to look up and potentially release. A larger piece was internal costs to send out the information to the customers,” he said. “We had a lot of worried folks. This had never happened in Canada before.”
Michael Geist, a University of Ottawa professor and a legal expert, wrote about the decision in his blog, www.michaelgeist.ca. He believes the court cost ruling should have other service providers concerned.

“The decision sends a warning signal to ISPs that getting involved in these cases can lead to significant costs that won’t be recouped. That is a bad message for privacy,” he said. “So is the likely outcome for future cases (should they arise) with subscribers left with fewer notices and information from their ISP given the costs involved and the court’s decision to not compensate for those costs.

Abramson said since the initial court filing by Voltage, Canadian laws have changed, and ISPs are now required to warn the users when such claims come forward.

“You can’t just respond to the court order without the users knowing about it,” he said.

Despite the decision, Abramson said it’s “business as usual” for TekSavvy today.

“We think it (the cost ruling) is the wrong signal, but this doesn’t dissuade us from working to protect our customers’ privacy rights. It’s the right thing to do.”

Abramson wonders what will happen in the future.

“As we depend more and ore on the Internet, more and more of our lives are happening on it. People want to trust their service providers,” he said. “We’ll continue to do whatever we can to uphold our consumers’ rights.”

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