New Brunswick has become the first Canadian province to introduce legislation regulating how apps, games, and other platforms treat their users under 16 – and the bill will likely lead to age verification across the board, because of how it is designed.
The proposed Young Consumers in Digital Markets Act, part of a broader An Act Respecting Young Persons, Digital Markets and Technology Use (Bill 12), was introduced on November 3 and is touted as pioneering in Canada. Justice Minister Robert McKee explained that the government has a responsibility to make sure children are safe online.
“We know kids are online, and it is our responsibility to make decisions that will help them be safe while they are online,” he said.
It sets out to ban a list of “unfair practices” by digital service providers, and breaking several of these rules is considered an offence that can be punished with a fine of up to $5 million or “imprisonment for a term of not more than five years less a day, or to both.”
The Young Consumers in Digital Markets Act does not order age verification, but it does not have to: it applies to any provider who knows, or “ought reasonably to know” that young consumers “are using, accessing or interacting with or are likely to be using” its services, or who targets them.
This puts a lot of pressure on companies to find out which of their users are under 16, and the most straightforward way to do that is to introduce age verification for everyone.
The bill is designed to complement the federal Bill C-34, which was introduced in June, and orders platforms to “implement adequate age-verification or age-estimation measures” for under-16s – which in reality means that users will have to hand over their ID or undergo a face scan.
According to New Brunswick, its proposed act will regulate digital products and services used by children, and the way they are marketed. The provincial Financial and Consumer Services Commission will be the enforcer, and will be able to impose fines, order records and documents, appoint investigators who can examine “any books, records, documents or communications” – and enter the premises of a provider – and remove material.
The commission’s investigators will also be able to compel witnesses to testify under oath, and will have “all the powers, authorities and immunities of a peace officer as defined in the Criminal Code (Canada).”
The tribunal that will be set up will be able to impose administrative penalties of up to $1 million, while the director of the commission can exempt any person or class from the law by order – and this order “may be retroactive in its operation.”
As for the rules that the bill introduces, they include a ban on default settings that are “misleading, deceptive or excessively one sided in favour of the provider” – as well as notifications that are sent “during prescribed hours in a manner that encourages continued engagement.”
It will be up to regulation to determine what those hours are. Designs that discourage a young user from stopping or pausing, as well as streaks, countdowns and scarcity messages that create “a false, misleading or unreasonable sense of urgency or scarcity” to push purchases, are also banned.
Another target is the use of “personal information, behavioural data or profiling” for ads that are false or “intended to improperly influence the young consumer’s purchasing decisions.”
Finally, the act adds, any other “practice prescribed by regulation” will also be considered an unfair one – which means the list can be expanded on without the need for a new vote in the legislature.
If a provider is accused of breaching these rules, “the onus is on the provider to prove that the provider has not engaged in the unfair practice” – and the “general impression” of a practice can count, not just its literal meaning.
In a press release, the province cited the head of the Financial and Consumer Services Commission, Kevin Hoyt, as saying that “the legislation will set clear expectations for how businesses design, market and deliver digital products and services to young consumers.”
The bill also writes into law a ban on phones in schools, from kindergarten to grade 12, during school hours, with the rule for grades nine to 12 set to start on February 1, 2027. School staff will be allowed to “temporarily confiscate” devices.
Licensed child care centers will not be allowed to let infants have any screen time, and older children will be limited to 30 minutes per day, with exceptions.
What is clear is that the bill is another in a series of legislative efforts around the world that will end up pushing more age verification onto more people, as companies look for ways to comply with laws that put the burden of proof on them.
While the bill is designed to protect children, it gives the authorities a lot of powers that are more commonly associated with fighting crime, not regulating consumer markets.
