TORONTO –
Tim Hortons has reached a proposed settlement in multiple class-action lawsuits alleging the restaurant’s mobile app violated customer privacy, which would have prompted the restaurant to offer free coffee and a donut to affected users.
The settlement negotiated with the legal teams involved in the cases still requires court approval.
The coffee and donut chain will also permanently delete any geolocation information it may have collected between April 1, 2019 and September 30, 2020, and will have its third-party service providers do the same.
“We think this is a favorable settlement because it offers compensation that has real value,” said Joey Zukran, a lawyer with the Montreal-based law firm LPC Avocat Inc., which filed the Quebec class action.
“Privacy cases in Canada are never guaranteed to be won,” he said. “Here we have some form of guarantee, some form of recovery … as opposed to the uncertainty that could continue.”
It is unclear how many customers used the app in the 18-month period ending September 30, 2020, and would have been eligible for a free hot drink and baked goods.
Restaurant Brands International Inc., the parent company of Tim Hortons, said in an investor presentation in May that it had four million active users in the three months ended March 31, 2022.
“I think people who get this will think it’s void, but class action settlements are often void to the end user,” said David Fraser, a privacy attorney at McInnes Cooper in Halifax.
While an individual award might not seem like much, he said given the number of people potentially involved, “it might be reasonable in the aggregate.”
However, others may feel it is not high enough to “act as a deterrent to further mischief,” Fraser said.
“Every time you settle, there’s going to be a trade-off,” he said, adding that the case “reflects how strange privacy injuries are.”
“If you used this app and Tim Hortons collected your location information without your adequate, informed consent, but nothing happened to that information, you didn’t actually suffer what would be considered tangible harm,” Fraser said.
“You’re trying to compensate for the feeling of discomfort, the eerie feeling that someone might have knowing that their information has been collected without their knowledge or consent.”
The proposed settlement comes after an investigation by federal and provincial privacy watchdogs found the mobile ordering app broke the law by collecting vast amounts of location information from customers.
In a report published last month, privacy commissioners said people who downloaded the Tim Hortons app had their movements tracked and recorded every few minutes – even when the app wasn’t open on their phones.
The investigation began after National Post reporter James McLeod obtained data showing that the app on his phone had tracked his location more than 2,700 times in less than five months.
In a statement, Tim Hortons said it was pleased to reach a proposed settlement in the four class action lawsuits filed in Quebec, British Columbia and Ontario.
“All parties agree that this is a fair settlement and we look forward to the Quebec Superior Court’s decision on the proposal,” the company said in a statement.
“We are confident that pending Quebec court approval of the settlement, British Columbia and Ontario courts will recognize the settlement.”
The company said the allegations made in the class actions have not been proven in court and the settlement is not an admission of any wrongdoing.
Tim Hortons said it would email customers Friday to inform them of the proposed settlement.
Tim Hortons said the retail value of a free hot drink is $6.19, while the value of a baked good is $2.39 plus tax, according to court documents.
Customers will receive credit for the items with a coupon or through the Tim Hortons app, the documents said.
Details on how the free hot drinks and baked goods will be distributed will be made available if the court approves the settlement, Tim Hortons said.
A Quebec court hearing is scheduled for Sept. 6 to consider the proposed settlement.
This report by The Canadian Press was first published on July 28, 2022.
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