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World Facebook demanded hands-off data policy in early talks to build new centre in Canada, documents reveal

Dado Ruvic/Reuters

Facebook executives dangled the promise of building a massive data centre in Canada in exchange for guarantees that the federal government would not seek authority over data on non-Canadians, according to newly released documents detailing an extensive global lobbying effort by the social-media giant.

A 2013 memo details how chief operating officer Sheryl Sandberg pressed Christian Paradis, then-industry minister in Stephen Harper’s Conservative government, for a letter promising that the Canadian government would not seek legal jurisdiction over any non-Canadian data housed in a data centre that Facebook built in the country. Facebook ended up building the data centre in Iowa instead.

“Sheryl took a firm approach and outlined that a decision on the data center was imminent. She emphasized that if we could not get comfort from the Canadian government on the jurisdiction issue we had other options,” wrote the memo’s author, Marne Levine, then Facebook’s vice-president of global public policy. Mr. Paradis said he would send the letter later that day, according to British news reports.

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The memo is contained in a cache of previously unreleased internal Facebook documents seized as part of a British parliamentary investigation into Facebook. Their existence was first reported on by digital magazine Computer Weekly, British newspaper The Observer and freelance investigative journalist Duncan Campbell. The Globe and Mail was able to independently verify the contents of the memo.

Facebook denied in a statement that it had put pressure on the Canadian government to offer legal protections in exchange for business investment.

“Before we commit to opening a data centre anywhere in the world, we want to make sure we fully understand the country’s laws and privacy protections,” the company said in an e-mailed statement. “This is not a threat to withhold investment, but part of our duty to protect people's data.”

However, the documents show the lengths to which Facebook went to press Canadian officials for legal commitments, as well as the Canadian government’s willingness to offer legal protections in exchange for the prospect of new jobs.

Mr. Paradis did not respond to requests by the Globe and Mail for comment.

British lawmakers previously released hundreds of pages of the documents, which stem from a lawsuit between California app developer Six4Three and Facebook. The documents had been sealed by a California court, but Six4Three developer Ted Kramer gave them to Damian Collins, the chair of the British parliamentary committee that is investigating Facebook.

Ms. Levine goes on to complain that one of Mr. Paradis’s staff made up a “completely fictitious account” of a meeting with Facebook executives that “made us look like real jerks.”

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The meeting took place during the World Economic Forum in Davos that January.

Ms. Levine and her team then drove to a reception for other members of Mr. Harper’s cabinet, including ministers for trade, finance and foreign affairs “so that we could cut that awful staff person out of the way.”

Facebook employees distracted the staffer and other government officials so that Ms. Levine could get cellphone numbers for three government ministers. “We were out of there in 20 minutes,” Ms. Levine wrote.

Legal experts on cybersecurity say negotiations between companies and governments over who can access foreign data aren’t uncommon. It has become increasingly common for companies to be concerned about exposing themselves to the laws of foreign countries because they store data there, and to ask governments how they plan to enforce those laws.

Governments also often don’t seek to enforce their local laws over foreign data housed in their country. “It is challenging to do and is a bit of a legal quagmire,” said Kirsten Thompson, who leads the Transformative Technologies and Data Strategy group at Dentons in Toronto. Ms. Thompson said she was speaking generally and couldn’t comment on Facebook’s memo.

But by agreeing to waive its authority over non-Canadian data housed in Canada, the federal government also ran the risk that it would make it harder for successive governments to enforce data privacy and access laws passed in the future to address issues that haven’t yet come to the surface.

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“I’m sure it’s a little bit delicate for government to say: ‘We won’t touch this data, we promise,' ” said Éloïse Gratton, who co-leads the privacy and data protection practice group at Borden Ladner Gervais in Montreal. “Down the line the government can change. The views can change on certain issues and new laws can come around to make sure that the government can protect its territory, its citizens. And perhaps that means digging into data that’s stored locally.”

Facebook lobbied the Canadian government ahead of its plans to build a fourth data centre in North America, federal lobbyist registry records show.

During the period Mr. Paradis was industry minister, from May 18, 2011, to July 14, 2013, records show that Facebook registered four lobbyists to deal with the Canadian government.

One was Erin O’Toole, a Bay Street lawyer at the now-defunct Heenan Blaikie firm, who is now a Conservative MP and was veterans affairs minister in Mr. Harper’s government.

Mr. O’Toole was registered as a lobbyist for Facebook from Dec. 1, 2011, to Feb. 29, 2012, "to arrange meetings to discuss potential investment or trade opportunities within Canada,” records show.

According to the federal lobbying registry, Mr. O’Toole reported that he communicated with six Canadian officials on Dec. 6, 2011, including senior staff members to Mr. Paradis; Heritage Minister James Moore; Public Safety Minister Vic Toews; Citizenship Minister Jason Kenney; and officials from Finance Canada and the Prime Minister’s Office.

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Three members of the strategic consultancy firm Crestview were also registered as Facebook lobbyists during that period. They were to discuss "the Privacy Act and its rules and regulations concerning privacy of internet and social media users/consumers" and "Bill C-28 Fighting Internet and Wireless Spam Act (FISA) as it pertains to the requirements of the anti spam legislation for social media and internet."

However, the Crestview consultants didn’t meet officials or MPs during the time Mr. Paradis held the industry portfolio.

Facebook ultimately decided against building a data centre in Canada and instead constructed a sprawling US$1-billion facility spread out over nearly 78 hectares in Altoona, Iowa. The company cited the region’s “abundance of wind-generated power” and “a great talent pool that will help build and operate the facility.” The project included millions in tax credits from the state government and employs roughly 200 people, according to Data Centre Dynamics, a data industry publication.

With a report from Tu Thanh Ha

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