Category: Data Protection
5. July 2021
On June 28, 2021, the European Commission adopted two adequacy decisions for the United Kingdom, one under the General Data Protection Regulation (GDPR) and another under the Law Enforcement Directive.
This means that organizations in the EU can continue to transfer personal data to organizations in the UK without restriction and fear of repercussions. Thus, there is no need to rely upon data transfer mechanisms, such as the EU Standard Contractual Clauses, to ensure an adequate level of protection while transferring personal data, which represents a relief as the bridging mechanism of the interim period decided on after Brexit set out to expire by the end of June 2021.
The European Commission found the U.K.’s data protection system has continued to incorporate to the same rules that were applicable when it was an EU member state, as it had “fully incorporated” the principles, rights and obligations of the GDPR and Law Enforcement Directive into its post-Brexit legal system.
The Commission also noted the U.K. system provides strong safeguards in regards to how it handles personal data access by public authorities, particularly for issues of national security.
In regards to criticism of potential changes in the UK’s legal system concerning personal data, Věra Jourová, Vice-President for Values and Transparency stated that: „We have listened very carefully to the concerns expressed by the Parliament, the Members States and the European Data Protection Board, in particular on the possibility of future divergence from our standards in the UK’s privacy framework. We are talking here about a fundamental right of EU citizens that we have a duty to protect. This is why we have significant safeguards and if anything changes on the UK side, we will intervene.“
The Commission highlighted that the collection of data by UK intelligence authorities is legally subject to prior authorization by an independent judicial body and that any access to data needs to be necessary and proportionate to the purpose pursued. Individuals also have the ability to seek redress in the UK Investigatory Powers Tribunal.
1. July 2021
The German Federal Criminal Police Office regularly records so-called PNR (Passenger Name Records) on flights. This includes, among other information, date of birth, names, e-mail addresses, possible frequent flyer numbers or the means of payment used. The aim of the screening is to help track and prevent terrorist offences and serious crime.
Last year, the quantity of these passenger data collected increased significantly. A total of 105 million data records were collected by the Federal Criminal Police Office (BKA) on passengers taking off or landing in Germany. Approximately 31 million passengers are affected by this, including those who have flown more than once. It is to be highlighted here that the number of passengers has fallen by 75 % compared to 2019 due to the corona pandemic.
In 2019, however, around 78 million passenger records of almost 24 million passengers were processed. Subsequently, 111,588 persons were checked with the police’s wanted persons database. The number of “technically positive” search hits was 1960, which corresponds to 0.082 per thousand.
In 2020, after a comparison with the police wanted persons database, 78,179 person transactions remained in the network. The number of positive search hits increased to 5347, which, nevertheless, still only corresponds to 0.2 per thousand. This number is again largely a matter of errors.
Various lawsuits against this dragnet investigation are already before the European Court of Justice. In particular, it is accused that the dragnet investigation is not proportionate. In particular, it affects uninvolved persons. The state should rather take a targeted approach in these cases and not a generalised one.
28. June 2021
Ransomware attacks are on a steep rise as the global pandemic continues. According to the cybersecurity firm SonicWall, there were more than 304 million attempted ransomware attacks tracked by them in 2020, which was a 62 percent increase over 2019. During the first five months of 2021, the firm detected another 116 percent increase in ransomware attempts compared to the same period in 2020. Another cybersecurity firm called Cybereason found in a recent study interviewing nearly 1,300 security professionals from all around the world that more than half of organisations have been the victim of a ransomware attack, and that 80 percent of businesses that decided to pay a ransom fee suffered a second ransomware attack, often times by the same cybercriminals.
Ransomware is a type of malicious software, which encrypts files, databases, or applications on a computer or network and perpetually holds them hostage or even threatens to publish data until the owner pays the attacker the requested fee. Captivated data may include Personal Data, business data and intellectual property. While Phishing attacks are the most common gateway for ransomware, there are also highly targeted attacks on financially strong companies and institutions (“Big game hunting”).
Alluding to the industry term Software-as-a-Service (SaaS), a new unlawful industry sub-branch has emerged in recent years, which according to security experts lowered the entrance barriers to this industry immensely: Ransomware-as-a-Service (RaaS). With RaaS, a typical monthly subscription could cost around 50 US-Dollars and the purchaser receives the ransomware code and decryption key. Sophisticated RaaS offerings even include customer service and dashboards that allow hackers to track the status of infections and the status of ransomware payments. Thus, cybercriminals do not necessarily have to have the technical skills themselves to create corresponding malware.
Experts point to various factors that are contributing to the recent increase in Ransomeware attacks. One factor is a consequence of the pandemic: the worldwide trend to work from home. Many companies and institutions were abruptly forced to introduce remote working and let employees use their own private equipment. Furthermore, many companies were not prepared to face the rising threats with respect to their cybersecurity management. Another reported factor has been the latest increase in value of the cryptocurrency Bitcoin which is the preferred currency by criminals for ransom payments.
Successful Ransomware attacks can lead to personal data breaches pursuant to Art. 4 No. 12 GDPR and can also lead to the subsequent obligation to report the data breach to the supervisory authorities (Art. 33 GDPR) and to the data subjects (Art. 34 GDPR) for the affected company. Businesses are called to implement appropriate technical and organisational measures based on the risk-based approach, Art. 32 GDPR.
Earlier this month, the Danish Data Protection Authority provided companies with practical guidance on how to mitigate the risk of ransomware attacks. Measures to ensure the ongoing confidentiality, integrity, availability and resilience of processing systems when faced with ransomware may include providing regular trainings for employees, having a high level of technical protection of systems and networks in place, patching programs in a timely manner, and storing backups in an environment other than the normal network.
22. June 2021
On June 21st, 2021 during its 50th plenary session, the European Data Protection Board (EDPB) adopted a final version of its recommendations on the supplementary measures for data transfers.
In its recent judgment C-311/18 (Schrems II) the Court of Justice of the European Union (CJEU) has decided that, while the Standard Contractual Clauses (SCCs) are still a valid data transfer mechanism, controllers or processors, acting as exporters, are responsible for verifying, on a case-by-case basis and where appropriate, in collaboration with the importer in the third country, if the law or practice of the third country impinges on the effectiveness of the appropriate safeguards contained in the Article 46 GDPR transfer tools. In the cases where the effectiveness of appropriate safeguards is reduced due to the legal situation in the third country, exporters may need to implement additional measures that fill the gaps.
To help exporters with the complex task of assessing third countries and identifying appropriate supplementary measures where needed, the EDPB has adopted this recommendation. They highlight steps to follow, potential information sources as well as non-exhaustive examples of supplementary measures that are meant to help exporters make the right decisions for data transfers to third countries.
The recommendations advise exporters to follow the following steps in order to have a good overview of data transfers and potential supplementary measures necessary:
1. Know the data transfers that take place in your organization – being aware of where data flows is essential to identify potentially necessary supplementary measures;
2. Verify the transfer tool that each transfer relies on and its validity as well as application to the transfer;
3. Assess if a law or a practice in the third country impinges on the effectiveness of the transfer tool;
4. Identify and adopt supplementary measures that are necessary to bring the level of protection of the data transferred up to the EU standard;
5. Take formal procedural steps that may be required by the adoption of your supplementary measure, depending on the transfer tool you are relying on;
6. Re-evaluate the level of protection of the data you transfer at appropriate intervals and monitor any potential changes that may affect the transfer.
The EDPB Chair, Andrea Jelinek, stated that “the effects of Schrems II cannot be underestimated”, and that the “EDPB will continue considering the effects of the Schrems II ruling and the comments received from stakeholders in its future guidance”.
The recommendations clearly highlight the importance of exporters to understand and keep an eye on their data transfers to third countries. In Germany, the Supervisory Authorities have already started (in German) to send out questionnaires to controllers regarding their data transfers to third countries and the tools used to safeguard the transfers. Controllers in the EU should be very aware of the subject of data transfers in their companies, and prepare accordingly.
21. June 2021
On May 20th, 2021, the Belgian Data Protection Authority (Belgian DPA) announced that it had approved the EU Data Protection Code of Conduct for Cloud Service Providers (EU Cloud CoC). The EU Cloud CoC is the first transnational EU code of conduct since the entry into force of the EU General Data Protection Regulation in May 2018.
The EU Cloud CoC represents a sufficient guarantee pursuant to Article 28 (1) and 28 (5) of the GDPR, as well as Recital 81 of the GDPR, which makes the adherence to the code by cloud service providers a valid way to secure potential data transfers.
In particular, the EU Cloud CoC aims to establish good data protection practices for cloud service providers, giving data subjects more security in terms of the handling of their personal data by cloud service providers. In addition, the Belgian DPA accredited SCOPE Europe as the monitoring body for the code of conduct, which will ensure that code members comply with the requirements set out by the code.
It further offers cloud service providers with practical guidance and a set of specific binding requirements (such as requirements regarding the use of sub-processors, audits, compliance with data subject rights requests, transparency, etc.), as well as objectives to help cloud service providers demonstrate compliance with Article 28 of the GDPR.
In the press release, the Chairman of the Belgian DPA stated that „the approval of the EU Cloud CoC was achieved through narrow collaboration within the European Data Protection Board and is an important step towards a harmonised interpretation and application of the GDPR in a crucial sector for the digital economy“.
18. June 2021
Luxembourg’s National Commission for Data Protection, the CNPD, has proposed a $ 425 million (€ 348.7 million) fine against Amazon.com Inc. for alleged GDPR violations, the Wall Street Journal reports. It would be the highest penalty to date under EU data protection law, exceeding the current record penalty of € 50 million against Google LLC.
It is not yet clear to the public what exactly the allegations are since the statements are based on a confidential source. Amazon also declined to comment on the case. The charges are apparently related to Amazon’s data collection and usage practices, but do not involve the Amazon Web Services cloud computing business.
The CNPD is Amazon’s competent data protection authority as the international retail company has its regional headquarters in the Grand Duchy of Luxembourg. According to the Article 64 GDPR procedure, the CNPD submitted its draft decision to data protection authorities of the other EU member states, which will have to approve the sanction before it can be officially imposed. Based on comparable cases in the past, the process could take months and lead to substantive changes, including an increased or reduced fine.
Though the proposed amount would set a record, it is far below the maximum of 4 % of the total worldwide annual turnover of the preceding financial year allowed by Article 83 (5) GDPR. It amounts to only about 0.1 % of Amazon’s annual revenue. As some critics say, this illustrates a pattern of data protection authorities favoring big-tech companies and often reducing large initial proposals after a long deliberation period. Given the companies’ massive incomes, such penalties are easy to recover from and ultimately, they run counter to the preventive purpose of the punishment.
As a result, these companies could soon fall under the terms of the Digital Services Act and the Digital Markets Act, which were proposed by the European Commission at the end of 2020 to upgrade rules governing digital services in the EU. This new set of regulations, which specifically targets tech companies, increases potential fines to 10 % of the global turnover.
15. June 2021
China’s “National People’s Congress”, the Chinese legislative body, approved the new “Data Security Law 2021” on June 10th, 2021 (unofficial English translation here). The new law gives President Xi Jinping the power to shut down or fine tech companies. The law will go into effect on September 1st, 2021.
The law applies to data processing activities and security surveillance within China’s territory. Data processing activities outside China’s territory that threaten China’s national security and public interests are also covered by the law. For international companies, the law means they must localize data in China. For example, data generated in factories in China must be kept in China and be subject to cyber data oversight.
Companies that leak sensitive data abroad or are found “mishandling core state data” can be forced to cease operations, have their licenses revoked, or fined up to 1.6 million US$, and companies who provide electronic information to foreign law enforcement authorities can be fined up to approx. 150.000 US$ or forced to suspend their business.
While the Chinese government is increasing its financial involvement in tech companies it is also producing new legislations to tighten its grip on such companies. The new data law is expected to provide a wide outline for future rules for Internet services and to ease the tracking of valuable data in the interest of national security. This may include directives that certain types of data must be stored and handled locally, as well as requirements for companies to track and report the information they hold.
A personal information protection law is still under review in China.
10. June 2021
On June 4th 2021, the EU Commission adopted new standard contractual clauses (SCC) for international data transfers. The SCCs are model contracts that can constitute a suitable guarantee under Art. 46 of the General Data Protection Regulation (GDPR) for the transfer of personal data to third countries. Third countries are those outside the EU/European Economic Area (EEA), e.g. the USA.
The new clauses were long awaited, as the current standard contractual clauses are more than 10 years old and thus could neither take into account the requirements regarding third country transfers of the GDPR nor the significant Schrems II ruling of July 16th, 2020. Thus, third country transfers had become problematic and had not only recently been targeted by investigations by supervisory authorities, inter alia in Germany.
What is new about the SCCs now presented is above all their structure. The different types of data transfers are no longer spread over two different SCC models, but are found in one document. In this respect, they are divided into four different “modules”. This should allow for a flexible contract design. For this purpose, the appropriate module is to be selected according to the relationship of the parties. The following modules are included in the new SCCs:
Module 1: Transfer of personal data between two controllers.
Module 2: Transfer of personal data from the controller to the processor
Module 3: Transfer of personal data between two processors
Module 4: Transfer of personal data from the processor to the controller
The content of the new provisions also includes an obligation to carry out a data transfer impact assessment, i.e. the obligation to satisfy oneself that the contractual partner from the third country is in a position to fulfil its obligations under the current SCCs. Also newly included are the duty to defend against government requests that contradict the requirements of the standard protection clauses and to inform the competent supervisory authorities about the requests. The data transfer impact assessment must be documented and submitted to the supervisory authorities upon request.
The documents are the final working documents. The official publication of the SCCs in the Official Journal of the European Union took place on June 7th, 2021. From then on and within a period of 18 months until December 27th, 2022, the existing contracts with partners from third countries, in particular Microsoft or Amazon, must be supplemented with the new SCCs.
However, even if the new SCCs are used, a case-by-case assessment of the level of data protection remains unavoidable because the new clauses alone will generally not be sufficient to meet the requirements of the ECJ in the above-mentioned ruling. In such a case-by-case examination, the text of the contract and the actual level of data protection must be examined. The latter should be done by means of a questionnaire to the processor in the third country.
Accordingly, it is not enough to simply sign the new SCC, but the controller must take further action to enable secure data transfer to third countries.
Ecuador’s National Assembly unanimously approved a new data protection law on May 10, 2021. The new data protection law was already countersigned by the now former President Moreno on May 21, 2021.
The EU’s General Data Protection Regulation (GDPR) has served as the model for enacting the law. For example, it has imposed obligations on the controller to implement appropriate technical and organizational security measures in the company. Further, it has to appoint a data protection officer and inform individuals before processing certain personal data. Accordingly, the law not only contains obligations for the relevant processors, but also endows the data subjects with their own protection rights. Thus, data subjects have the right to request access to, modification and deletion of their personal data.
The Data Protection Law also provides for the establishment of a national data protection authority. It also contains regulations for international and cross-border data exchange.
In contrast to the GDPR, however, the Data Protection Act provides lower fines for violations. The level of penalties here has been set between 0.1% and 1% of a company’s annual turnover. The specific amount is also made dependent on the severity of the violation, among other factors. The GDPR’s catalog of fines, on the other hand, provides fines of up to 20 million euros. Fines of up to four percent of the annual turnover achieved worldwide in the last financial year are also possible.
The reason for passing the new law was a massive data breach that resulted in the personal data of up to 20 million people being made available online.
Company fails to appoint an EU representative. Dutch data protection authority imposes fine of €525,000.
The Dutch Data Protection Authority (Autoriteit Persoonsgegevens) imposed a fine of €525,000 on Locatefamily.com on May 12, 2021. The company failed to comply with its obligation under Article 27 of the EU General Data Protection Regulation, which required the company to appoint a representative in the EU.
The online platform caught the attention of the authorities because it published the contact details (including telephone numbers and addresses) of individuals. In this regard, the Dutch data protection authority stated that data subjects had often not registered for the online platform. In particular, the data subjects did not know how the company had obtained their data.
After numerous complaints from individuals, the data protection authority determined that the online platform had not complied with requests to delete data. It further came to light that the company had no branches in the EU and had not appointed a representative accordingly. This made it almost impossible for data subjects to assert their rights against the company.
Article 27(2)(a) of the GDPR provides that companies not established in the EU that offer goods or services to persons in the EU or monitor the conduct of persons in the EU must designate a representative in the EU. Although exceptions to this are possible, they are narrowly defined.
An exemption may be considered if the processing of personal data is occasional and does not involve the extensive processing of sensitive personal data or the processing of personal data in connection with criminal convictions and offenses. The processing must also not, taking into account the nature, context, scope and purposes of the processing, result in a risk to the rights and freedoms of natural persons.
As no exceptional case existed in the assessment of the Dutch data protection authority, the company imposed a fine in the amount of €525,000 on Locatefamily.com. To avoid further penalties, the company was to appoint an EU representative by a certain deadline.
