TORONTO-
Tim Hortons has reached a proposed settlement in multiple class action lawsuits alleging the restaurant’s mobile app violated customer privacy, which would cause the restaurant to offer a free coffee and donut to affected users.
The settlement, negotiated with the legal teams involved in the lawsuits, still requires court approval.
The coffee and donut chain would also permanently delete any geolocation information it may have collected between April 1, 2019 and September 30, 2020, and direct third-party service providers to do the same.
“We think it’s a favorable settlement because it offers compensation that has real value,” said Joey Zukran, an attorney with Montreal-based LPC Avocat Inc., which filed the Quebec class action.
“Privacy cases in Canada are never guaranteed to win,” he said. “Here we have some kind of guarantee, some kind of recovery … as opposed to the uncertainty that it might last.”
It’s unclear how many customers used the app during the 18-month period ending September 30, 2020 and would be eligible to receive a free hot beverage and baked goods.
Restaurant Brands International Inc., the parent company of Tim Hortons, said in an investor filing in May that it had four million active users for the three months ending March 31, 2022.
“I think the people who receive this will think it’s petty, but class action settlements are often petty to the end consumer,” said David Fraser, a privacy attorney at McInnes Cooper in Halifax.
While individual compensation may not sound like much, he said given the number of people potentially involved “it may be reasonable on the whole.”
Still, others may feel it’s not high enough to “deter further mischief,” Fraser said.
“Any time you settle, there will be a compromise,” he said, adding that the case “reflects how rare privacy harms are.”
“If you used that app and Tim Hortons collected your location information without your proper informed consent, but nothing happened to that information, you haven’t actually suffered what would be considered tangible harm,” Fraser said.
“You’re trying to offset the feeling of revulsion, the chill that someone might feel knowing that their information was collected without their knowledge or consent.”
The proposed settlement comes after an investigation by federal and provincial privacy watchdogs found that the mobile ordering app broke the law by collecting large amounts of location information from customers.
In a report published last month, the privacy commissioners said that people who downloaded the Tim Hortons app had their movements tracked and recorded every few minutes, even when the app was not open on their phones.
The investigation was launched after National Post reporter James McLeod obtained data showing his phone app had tracked his location more than 2,700 times in less than five months.
In a statement, Tim Hortons said it is pleased to have reached 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 await the Quebec Superior Court’s decision on the proposal,” the company said in a statement.
“We are confident that, pending the Quebec court’s approval of the settlement, the British Columbia and Ontario courts will recognize the settlement.”
The company said that the allegations raised in the class action lawsuits were not proven in court and that the settlement is not an admission of any wrongdoing.
Tim Hortons said it would email customers on Friday to let them know about the proposed deal.
Tim Hortons said the retail value of a free hot beverage is $6.19, while the value of a baked good is $2.39, plus tax, according to court documents.
Customers would receive a credit for the items with a coupon or through the Tim Hortons app, according to the documents.
Details about the distribution of free hot drinks and baked goods would be provided if the court approves the settlement, Tim Hortons said.
A hearing in a Quebec court is scheduled for September 6 to consider the proposed settlement.
This report from The Canadian Press was first published on July 28, 2022.