3. March 2023
The lack of comprehensive federal privacy legislation in the United States continues to be a cause of concern for many, as consumers and industry struggle with the growing patchwork of state laws. With the rise of data breaches, hacking, and other cyber threats, individuals are rightly concerned about the security and privacy of their personal information. As a result, lawmakers in the United States have introduced several data protection bills that could get a second look in Congress.
Several data protection bills
The “Health Data Use and Privacy Commission Act”, sponsored by Senator Bill Cassidy, aims to establish a blue-ribbon panel to recommend changes to health privacy laws. This bill seeks to address the growing concerns about the collection, use, and dissemination of personal health data. The panel would be tasked with evaluating current laws and regulations, identifying gaps and weaknesses, and recommending changes to ensure that individuals’ health data is adequately protected.
The “My Body, My Data Act” would create a new national standard to protect personal reproductive health data. By minimizing the personal reproductive health data that is collected and retained, the bill would prevent this information from being disclosed or misused.
The “Data Care Act” would require websites, apps, and other online providers to take responsible steps to safeguard personal information and stop the misuse of users’ data. This bill seeks to hold companies accountable for their data practices and prevent them from using personal data in ways that could lead to harm. It would require companies to take reasonable steps to safeguard personal data and to disclose how they use and share consumer data.
A national data protection framework remains the main goal
The “American Data Privacy and Protection Act” (ADPPA) was proposed last year, and while it failed to make it to the House floor, it remains the preferred framework for addressing current regulatory shortcomings. The latest Congressional hearing dedicated to privacy, hosted by the House Committee on Energy and Commerce’s new Subcommittee on Innovation, Data and Commerce, discussed the need for comprehensive federal legislation and confirmed that the ADPPA is the only framework being considered at this time.
The hearing also highlighted the industry benefits of a national standard, particularly for small and medium-sized businesses, who are struggling to keep up with the growing state privacy law patchwork. Federal preemption remains a point of contention in ADPPA talks, with several states rejecting proposed preemption last year, most notably California.
The subcommittee also focused on the need to regulate the growing data broker industry, which was characterized as a “multibillion-dollar economy selling consumers’ data with virtually no restrictions or oversight.” The ADPPA carries important provisions on broker disclosure and user opt-out obligations, which are designed to increase transparency and give consumers greater control over their data.
Outlook
The lack of comprehensive federal privacy legislation in the United States continues to be a concern for consumers and industry. As technology continues to advance and new threats emerge, it is essential that lawmakers in the United States take proactive steps to ensure that individuals’ rights to privacy are protected. By passing these bills, Congress can help to establish a framework for data protection that will safeguard individuals’ personal information and prevent abuses of data use. Until now, data protection in the United States has primarily been at the top of the agenda at the state level. California, Colorado, Connecticut, Virginia, and Utah have recently enacted comprehensive data privacy laws. The ADPPA remains the preferred framework for addressing current regulatory incompletion, and there are growing calls for a national standard to avoid the problems that arise with a growing state privacy law patchwork. While federal preemption remains a point of contention, there are hopes that new Republican leadership could bring better odds of the ADPPA making it to the floor in 2023.
17. January 2023
On January 12th, 2023, the European Data Protection Board (EDPB) issued a decision criticizing the Irish Data Protection Commissioner’s attempt to narrow the scope of an investigation in Facebook’s (a part of American tech giant Meta Inc.).
Furthermore, the EDPB found that the Commissioner had ignored a key element arising from a complaint filed in Austria in 2018: Meta Inc. had adapted its terms and conditions to the new GDPR rules in order to be compliant with the European regulation. This resulted in user consent becoming a requirement for continued use of the service.
The complaint argued that this could amount to forced consent. However, the Data Protection Commissioner disagreed and stated that the tech company can rely on the argument that it is fulfilling a contract with its users to provide personalized ads, although breaching transparency obligations.
The EDPB ordered the Commission to reverse its legal position on Meta Inc.’s data collection and processing as its contractual basis for data collection breached EU law.
Furthermore, the EDPB stated that the Irish Data Protection Commission failed to clearly establish the legal basis of data collection generally, and also failed to investigate specific concerns in the matter of sensitive information.
On January 6th, 2023, the Finnish Supervising Authority (SA) imposed an administrative fine on the passenger traffic company Viking Line. Following a complaint, the Authority began an investigation that quickly found out that the company was unlawfully processing the employees’ health data.
In particular, Viking Line stored employees’ diagnosis in an HR system in order to handle absences. The Authority found that several of these diagnosis were stored for over 20 years, and in some cases were also inaccurate.
The inaccuracy of health data poses a clear risk for the legal protection of an individual. Furthermore, it was highlighted in the Authority’s decision that health data should be stored only as long as strictly necessary.
Moreover, the complainant had requested access to his personal data. This was granted, but only after a long and difficult iter, with the company bringing forward several different arguments to justify the delay.
In addition to these findings, the SA also stated that Viking Line had not appropriately informed its employees about the processing of their personal data, thus resulting in a clear breach of the GDPR.
Besides the administrative fine of 230.000 Euros, the SA ordered Viking Line to correct their practices and inform their employees about the processing of their personal data according to the GDPR.
10. January 2023
In the first week of January 2023, the Federal Communications Commission voted on a Proposed Rulemaking, which was passed with 4 votes in favour against none opposed, in order to strengthen the Commission’s rules for notifying customers and federal law enforcement agencies of breaches of customary proprietary network information.
The proposition was made after the wave of new legislations regarding the right to privacy and personal data protection both on a State and a federal level across the U.S.
One of the most relevant proposals contained in the document is to eliminate the current mandatory seven day waiting period for notifying customers of a data breach.
The FCCs Chairman, Jessica Rosenworcel, stated that the rules which were applied until now need to be updated. The FCC will open a formal phase in order to gather more information on how to implement the proposed changes and will also take into account comments made by the FCC Board.
After receiving several complaints , in November 2022, the French Data Protection Authority (CNIL) decided to impose a fine of 300.000 Euros upon the French phone operator FREE for several violations of the rules contained in the GDPR.
In particular, findings included violations of:
- Article 12 and 21 GDPR, regarding transparent communication on how the data subjects can exercise their rights, in particular the right of erasure.
- Article 15 GDPR, regarding the right of access by the data subject.
- Article 32 GDPR, regarding the security of personal data.
- Article 33 GDPR, as FREE did not comply with the obligation to document a personal data breach.
As a consequence of these findings, CNIL decided to impose a fine upon FREE, with an order to comply with the GDPR’s rules regarding the management of access and erasure requests and to justify this compliance within three months from the decision, with an additional fine of 500 Euros for each day overdue.
29. November 2022
The Irish Data Protection Commission (DPC) imposed an administrative fine of 265 million euros on Facebook-mother Meta as a result of the unlawful publication of personal data.
Investigation proceedings
Following the availability online of personal data of up to 533 million Facebook and Instagram users from over 100 countries in April 2021, the DPC had launched investigations. As part of the investigation process, it cooperated with the other European data protection authorities and examined the Facebook Search, Facebook Messenger Contact Importer and Instagram Contact Importer tools. With the help of these tools, contacts stored in the smartphone can be imported into the Instagram or Facebook app in order to find friends or acquaintances.
Lack of technical and organisational measures to protect data
As part of its investigation, the DPC dealt with the so-called technical and organisational measures according to Article 25 GDPR. According to data protection law, data controllers must use such measures to ensure that the rights of data subjects are extensively protected. These include, for example, pseudonymisation and encryption of personal data, but also physical protection measures or the existence of reliable backups.
The DPC did not consider Meta’s technical and organisational measures to be sufficient. Therefore, in addition to the aforementioned fine of 265 million euros, it issued a reprimand as well as an order to bring the processing operations into compliance with data protection law within a certain period of time and to implement a number of specific remedial measures to this end.
Not the first fine for Meta
Meta is by now familiar with fines from European data protection authorities. In total, the company has already been fined almost one billion euros, most recently in September in the amount of 405 million euros for serious data protection violations involving underage Instagram users. The reason for the considerable amount of the individual sanctions is Article 83 GDPR, according to which fines can amount to up to four percent of a company’s total worldwide annual turnover. Meta has appealed against each of the previous decisions, so it can also be assumed in this case that Meta will not accept the fine without a judicial review, either.
2. November 2022
A few days ago the Spanish Data Protection Authority launched a new tool called “Asesora Brecha” in order to simplify the notifiaibility of data breaches. This was deemed necessary due to the large number of reported data breaches in the country.
This tool helps data controllers as well as data protection officers to decide whether they should notify a personal data breach to the supervisory authority and how the breach itself can be avoided. Specifically, the functions include:
- Who has to notify the supervisory authority
- Which situations correspond to a data breach and which not
- Which is the competent authority
The tool was described as free and easy to use. It was also added to the Decalogue of AEPD help resources in order to promote and facilitate compliance with the GDPR. In regard to the principle of storage limitation, the tool itself is GDPR compliant. Once the procedure is complete, all the provided data are automatically deleted.
However, the Spanish DPA clearly stated that the use of “Asesora Brecha” does not automatically imply that the obligations imposed by the GDPR are fulfilled. The responsible figure needs to fill out the relevant documentation and, if needed, report the data breach to the authorities.
28. October 2022
We are very pleased about our renewed top placement in this year’s ranking of the Kanzleimonitor* study 2022-23 and would like to thank all clients who recommended us!
In the field of Data Protection Law, we achieved 5th place with numerous direct recommendations. Our firm can thus once again hold its own in a strong field of competitors alongside various large law firms (including Taylor Wessing, Osborne Clarke) in the absolute top group in Data Protection Law.
Three of our Attorneys are also mentioned by name in the current ranking of personal recommendations: Kristin Bauer, Dr. Karsten Kinast and Benjamin Schuh.
We are particularly pleased with this study result, as it is a transparent, direct evaluation from our clients and is carried out by our own professional group of lawyers.
Many thanks again to all clients who have recommended us (again)!
*The German Kanzleimonitor study (law firm monitor) (“kanzleimonitor.de – recommendation is the best reference”) provides an annual comprehensive ranking of the 100 most recommended lawyers and law firms in each legal field in Germany. This overview is intended to serve corporate lawyers in all industries as a selection criterion for mandating commercial law firms.
The French data protection authority CNIL imposed a fine of 20 million Euros on Clearview AI, being the latest in a line of authorities deeming the processing activities of the biometrics company unlawful under data protection law.
Clearview AI is a US company that extracts photographs and videos that are directly accessible online, including social media, in order to feed its biometric image database, which it prides itself to be the biggest in the world. Access to the search engine based on this database is offered to law enforcement authorities.
The case
The decision followed several complaints from data subjects in 2020, which led to the CNIL’s investigations and a formal notice to Clearview AI in November 2021 to “cease the collection and use of data of persons on French territory in the absence of a legal basis” and “facilitate the exercise of individuals’ rights and to comply with requests for erasure.” However, the company did not react to this notice within the two-month deadline imposed by the CNIL. Therefore, the authority imposed not only the fine but also an order to Clearview AI “to stop collecting and processing data of individuals residing in France without a legal basis and to delete the data of these persons that it had already collected, within a period of two months.” In addition, it set a “penalty of 100,000 euros per day of delay beyond these two months.”
CNIL based its decision on three breaches. First, Clearview AI had processed the data without a legal basis. Given the “intrusive and massive nature of the process which makes it possible to retrieve the images present on Internet of the millions of internet users in France”, Clearview AI had no legitimate interest in the data processing. Second, the CNIL sanctioned Clearview AI’s inadequate handling of data subjects’ requests. Lastly, it penalized the company’s failure to cooperate with the CNIL.
The impact of the decision
For over two years, Clearview AI has been under the scrutiny of data protection authorities (“DPA”s) all over the world. So far, it has been fined more than 68 million Euros in total. Apart from CNIL’s fine, there have been fines of 20 million Euros by Greece’s Hellenic DPA in July 2022, over 7.5 million pounds by the UK Information Commissioner’s Office in May 2022 and 20 million Euros by the Italian Garante in March 2022.
CNIL’s decision was likely not the last one, considering that the all-encompassing nature of Clearview AI’s collection of personal data that – given the company’s business model – inevitably concerns EU data subjects. Whether the company will comply within the two-month period is yet to be seen.
UN Special Rapporteur on the right to privacy Ana Brian Nougrères published a report in which she laid out ten guiding principles “as a key structural part of every national legal system that regulate the actions of controllers and processors in the processing of personal data”.
According to the Special Rapporteur, “privacy is a human right that enables the free development of personality and the exercise of rights in accordance with the dignity of the human being […]. But today, we live in a world where participating in public and private activity at the national and international level requires more and more personal data to be processed”. Her goal is to achieve “cooperation and regulatory harmonization at the international level”. While many States regulate data protection and privacy issues nationally, international law enshrines the right to privacy in Article 12 of the Universal Declaration of Human Rights. The Special Rapporteur indicated that national legislation already has much in common regarding the principles of privacy and data protection which can “serve as a basis for progressing towards a global consensus that will make it possible to address various challenges that arise in the processing and international transfer of data concerning individuals to ensure that their right to privacy is safeguarded in both virtual and face-to-face environments”.
The ten key principles analyzed are legality, consent, transparency, purpose, loyalty, proportionality, minimization, quality, responsibility, and security – hardly news from an EU perspective. This is not a coincidence, as the Special Rapporteur used several supranational legal frameworks, including the GDPR, as a base for her analysis. This shows once more that a solely Eurocentric view on privacy and data protection is ill-advised, as other parts of the world may not find the principles quite as self-evident. With her report, the Special Rapporteur wishes to encourage and guide States “to strike a balance between the different conflicting interests in the processing of personal data and the right to privacy in the global and digital era”.
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