Superior Court Refuses to Strike Adware Breach of Privacy Claims

Gilbertson Davis LLPCommercial, Commercial Litigation, Cyber Risks, Information Technology0 Comments

In Bennett v Lenovo, the plaintiff alleged breach of contract, breach of the implied condition of merchantability, the tort of intrusion upon seclusion, and breach of provincial privacy laws as a result of the factory installation of an alleged adware program “Virtual Discovery” on certain Lenovo laptops. The Court allowed the claim to proceed on three of the causes of action, dismissing only the breach of contract claim.

The plaintiff asserted that the Virtual Discovery program intercepted a user’s internet traffic to analyze it and display targeted advertising to the user based on that analysis. The plaintiff claimed that these actions were a breach of his privacy, was a vulnerability that exposed his information to third party hackers, and caused the laptop to be unfit for any online use, as well as negatively impacting performance and battery life.

The defendant asserted that the claims had no chance of success and should be struck out, on the basis that the plaintiff had asserted no actual privacy violations or harm, and that the laptop was still entirely usable even if the allegations were true.

In its decision, the Court noted that the tort of intrusion upon seclusion (often characterized as breach of privacy) does not require actual damages to sustain a claim, only that the defendant intentionally accessed the plaintiff’s private affairs without lawful justification, and that such access was highly offensive causing distress, humiliation, or anguish. The court held that the allegations made, if true, are not plainly and obviously doomed to fail.

Further, the court was not prepared to accept that such laptops were obviously of merchantable quality simply because they could still perform some functions even with the alleged defects. The court noted that virtually any defective product can still be sold for some use for some price, but that does not mean that no product could ever be found to be not of merchantable quality.

While there is no ruling on the merits of these allegations, the fact that they survived being struck out, and further may become certified as a class action, may give computer manufacturers and factory-installed software developers pause to consider whether the pre-installation of certain software complies with all applicable consumer protection and privacy legislation, or what notice users must be given about such pre-installed software.

If you have a privacy issue, consumer protection issue, or contract dispute, contact us for an initial consultation.

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