Category: EU Commission

European Commission and United States agree in principle on Trans-Atlantic Data Privacy Framework

29. March 2022

On March 25th, 2022, the United States and the European Commission have committed to a new Trans-Atlantic Data Privacy Framework that aims at taking the place of the previous Privacy Shield framework.

The White House stated that the Trans-Atlantic Data Privacy Framework “will foster trans-Atlantic data flows and address the concerns raised by the Court of Justice of the European Union when it struck down in 2020 the Commission’s adequacy decision underlying the EU-US Privacy Shield framework”.

According to the joint statement of the US and the European Commission, “under the Trans-Atlantic Data Privacy Framework, the United States is to put in place new safeguards to ensure that signals surveillance activities are necessary and proportionate in the pursuit of defined national security objectives, establish a two-level independent redress mechanism with binding authority to direct remedial measures, and enhance rigorous and layered oversight of signals intelligence activities to ensure compliance with limitations on surveillance activities”.

This new Trans-Atlantic Data Privacy Framework has been a strenuous work in the making and reflects more than a year of detailed negotiations between the US and EU led by Secretary of Commerce Gina Raimondo and Commissioner for Justice Didier Reynders.

It is hoped that this new framework will provide a durable basis for the data flows between the EU and the US, and underscores the shared commitment to privacy, data protection, the rule of law, and the collective security.

Like the Privacy Shield before, this new framework will represent a self-certification with the US Department of Commerce. Therefore, it will be crucial for data exporters in the EU to ensure that their data importers are certified under the new framework.

The establishment of a new “Data Protection Review Court” will be the responsible department in cases of the new two-tier redress system that will allow EU citizens to raise complaints in cases of access of their data by US intelligence authorities, aiming at investigating and resolving the complaints.

The US’ commitments will be concluded by an Executive Order, which will form the basis of the adequacy decision by the European Commission to put the new framework in place. While this represents a quicker solution to reach the goal, it also means that Executive Orders can be easily repealed by the next government of the US. Therefore, it remains to be seen if this new framework, so far only agreed upon in principle, will bring the much hoped closure on the topic of trans-Atlantic data flows that is intended to bring.

European Commission adopts South Korea Adequacy Decision

30. December 2021

On December 17th, 2021, the European Commission (Commission) announced in a statement it had adopted an adequacy decision for the transfer of personal data from the European Union (EU) to the Republic of Korea (South Korea) under the General Data Protection Regulation (GDPR).

An adequacy decision is one of the instruments available under the GDPR to transfer personal data from the EU to third countries that ensure a comparable level of protection for personal data as the EU. It is a Commission decision under which personal data can flow freely and securely from the EU to the third country in question without any further conditions or authorizations being required. In other words, the transfer of data to the third country in question can be handled in the same way as the transfer of data within the EU.

This adequacy decision allows for the free flow of personal data between the EU and South Korea without the need for any further authorization or transfer instrument, and it also applies to the transfer of personal data between public sector bodies. It complements the Free Trade Agreement (FTA) between the EU and South Korea, which entered into force in July 2011. The trade agreement has led to a significant increase in bilateral trade in goods and services and, inevitably, in the exchange of personal data.

Unlike the adequacy decision regarding the United Kingdom, this adequacy decision is not time-limited.

The Commission’s statement reads:

The adequacy decision will complement the EU – Republic of Korea Free Trade Agreement with respect to personal data flows. As such, it shows that, in the digital era, promoting high privacy and personal data protection standards and facilitating international trade can go hand in hand.

In South Korea, the processing of personal data is governed by the Personal Information Portection Act (PIPA), which provides similar principles, safeguards, individual rights and obligations as the ones under EU law.

An important step in the adequacy talks was the reform of PIPA, which took effect in August 2020 and strengthened the investigative and enforcement powers of the Personal Information Protection Commission (PIPC), the independent data protection authority of South Korea. As part of the adequacy talks, both sides also agreed on several additional safeguards that will improve the protection of personal data processed in South Korea, such as transparency and onward transfers.

These safeguards provide stronger protections, for example, South Korean data importers will be required to inform Europeans about the processing of their data, and onward transfers to third countries must ensure that the data continue to enjoy the same level of protection. These regulations are binding and can be enforced by the PIPC and South Korean courts.

The Commission has also published a Q&A on the adequacy decision.

EU commission working on allowing automated searches of the content of private and encrypted communications

25. November 2021

The EU Commission is working on a legislative package to combat child abuse, which will also regulate the exchange of child pornography on the internet. The scope of these regulations is expected to include automated searches for private encrypted communications via messaging apps.

When questioned, Olivier Onidi, Deputy Director General of the Directorate-General Migration and Home Affairs at the European Commission, said the proposal aims to “cover all forms of communication, including private communication”.

The EU Commissioner of Home Affairs, Ylva Johansson, declared the fight against child sexual abuse to be her top priority. The current Slovenian EU Council Presidency has also declared the fight against child abuse to be one of its main priorities and intends to focus on the “digital dimension”.

In May 2021, the EU Commission, the Council and the European Parliament reached a provisional agreement on an exemption to the ePrivacy Directive that would allow web-based email and messaging services to detect, remove, and report child sexual abuse material. Previously, the European Electronic Communications Code (EECC) had extended the legal protection of the ePrivacy Directive to private communications related to electronic messaging services. Unlike the General Data Protection Regulation, the ePrivacy Directive does not contain a legal basis for the voluntary processing of content or traffic data for the purpose of detecting child sexual abuse. For this reason, such an exception was necessary.

Critics see this form of preventive mass surveillance as a threat to privacy, IT security, freedom of expression and democracy. A critic to the agreement states:

This unprecedented deal means all of our private e-mails and messages will be subjected to privatized real-time mass surveillance using error-prone incrimination machines inflicting devastating collateral damage on users, children and victims alike.

However, the new legislative initiative goes even further. Instead of allowing providers of such services to search for such content on a voluntary basis, all providers would be required to search the services they offer for such content.

How exactly such a law would be implemented from a technical perspective will probably not be clear from the text of the law and is likely to be left up to the providers.
One possibility would be that software checks the hash of an attachment before it is sent and compares it with a database of hashes that have already been identified as illegal once. Such software is offered by Microsoft, for example, and such a database is operated by the National Center of Missing and Exploited Children in the United States. A hash is a kind of digital fingerprint of a file.
Another possibility would be the monitoring technology “client-side scanning”. This involves scanning messages before they are encrypted on the user’s device. However, this technology has been heavily criticized by numerous IT security researchers and encryption software manufacturers in a joint study. They describe CSS as a threat to privacy, IT security, freedom of expression and democracy, among other things because the technology creates security loopholes and thus opens up gateways for state actors and hackers.

The consequence of this law would be a significant intrusion into the privacy of all EU citizens, as every message would be checked automatically and without suspicion. The introduction of such a law would also have massive consequences for the providers of encrypted messaging services, as they would have to change their software fundamentally and introduce corresponding control mechanisms, but without jeopardizing the security of users, e.g., from criminal hackers.

There is another danger that must be considered: The introduction of such legally mandated automated control of systems for one area of application can always lead to a lowering of the inhibition threshold to use such systems for other purposes as well. This is because the same powers that are introduced in the name of combating child abuse could, of course, also be introduced for investigations in other areas.

It remains to be seen when the relevant legislation will be introduced and when and how it will be implemented. Originally, the bill was scheduled to be presented on December 1st, 2021, but this item has since been removed from the Commission’s calendar.

European Commission pursues legal action against Belgium over independence of Data Protection Autority

16. November 2021

In its October Infringements Package, the European Commission has stated it is pursuing legal actions against Belgium over concerns its Data Protection Authority (DPA) is not operating independently, as it should under the General Data Protection Regulation (GDPR).

The Commission stated that it “considers that Belgium violates Article 52 of the GDPR, which states that the data protection supervisory authority shall perform its tasks and exercise its powers independently. The independence of data protection authorities requires that their members are free from any external influence or incompatible occupation.”

According to the European Commission, however, some members of the Belgian DPA cannot be regarded as free from external influence, as they either report to a management committee depending on the Belgian government, they have taken part in governmental projects on COVID-19 contact tracing, or they are members of the Information Security Committee.

On June 9th, 2021, the Commission sent a letter of formal notice to Belgium, giving the member state two months to take corrective measures. Belgium’s response to the Commission’s letter did not address the issues raised and the members concerned have so far remained in their posts. The European Commission is now giving Belgium two months to take relevant action. If this fails, the Commission may decide to refer the case to the Court of Justice of the European Union.

US court unsuccessfully demanded extensive information about user of the messenger app Signal

On October 27th, 2021 Signal published a search warrant for user data issued by a court in Santa Clara, California. The court ordered Signal to provide a variety of information, including a user’s name, address, correspondence, contacts, groups, and call records from the years 2019 and 2020. Signal was only able to provide two sets of data: the timestamp of when the account was created and the date of the last connection to the Signal server, as Signal does not store any other information about its users.

The warrant also included a confidentiality order that was extended four times. Signal stated:

Though the judge approved four consecutive non-disclosure orders, the court never acknowledged receipt of our motion to partially unseal, nor scheduled a hearing, and would not return counsel’s phone calls seeking to schedule a hearing.

A similar case was made public by Signal in 2016, when a court in Virginia requested the release of user data and ordered that the request not be made public. Signal fought the non-publication order in court and eventually won.

Signal is a messenger app that is highly regarded among privacy experts like Edward Snowden. That’s because Signal has used end-to-end encryption by default from the start, doesn’t ask its users for personal information or store personal data on its servers and is open source. The messenger is therefore considered particularly secure and trustworthy. Moreover, no security vulnerabilities have become known so far, which is definitely the case with numerous competing products.

Since 2018, Signal is beeing operated by the non-profit organization Signal Technology Foundation and the Signal Messenger LLC. At that time, WhatsApp co-founder Brian Acton, among others, joined the company and invested $50 million. Signal founder Moxie Marlinspike is also still on board.

The EU commission is planning a legislative package to fight the spread of child abuse on the Internet. The law will also include automated searches of the content of private and encrypted communications, for example via messenger apps. This would undermine the core functions of Signal in Europe. Critics call this form of preventive mass surveillance a threat to privacy, IT security, freedom of expression and democracy.

New EU SCC must be used as of now

29. September 2021

In June 2021, the European Commission published the long-awaited new Standard Contractual Clauses (SCC) for the transfers of personal data to so-called third countries under the General Data Protection Regulation (GDPR) (please see our blog post). These new SCC modules replace the three 10-year-old SCC sets that were adopted under the EU Data Protection Directive 95/46/EC and thus could not meet the requirements of the GDPR for data transfers to third countries, nor the significant Schrems II ruling of July 16th, 2020 (please see our blog post). The transfer of data to third countries has not only recently become problematic and a focus of supervisory authorities.

As of Monday, September 27th, 2021, these new SCC must be used for new contracts entered into after September 26th, 2021, and for new processing activities that begin after September 26th, if the contract or processing activity involves the transfer of personal data to so-called inadequate third countries. These are countries outside of the European Economic Area (EEA) not deemed to have an adequate level of data protection by an adequacy decision of the European Commission.

Contracts signed before September 27th, 2021, based on the old SCC will still be considered adequate until December 27th, 2022. For these contracts, the old SCCs already signed can be maintained in the meantime as long as the processing of personal data that is the subject of the contract in question does not change. The SCC used for these contracts must be updated to the new SCC, or other data transfer mechanisms in accordance with the GDPR, by December 27th, 2022. As of that date, all SCC used as safeguards for data transfers to inadequate third countries must be the new SCC.

European Commission Adopts UK Adequacy Decisions

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.

EU Commission publishes Draft Adequacy Decision for South Korea

25. June 2021

On 16 June 2021, the European Commission published the draft adequacy decision for South Korea and transmitted it to the European Data Protection Board (EDPB) for consultation. Thus, the Commission launched the formal procedure towards the adoption of the adequacy decision. In 2017, the Commission announced to prioritise discussions on possible adequacy decisions with important trading partners in East and South-East Asia, starting with Japan and South Korea. The adequacy decision for Japan was already adopted in 2019.

In the past, the Commission diligently reviewed South Korea’s law and practices with regards to data protection. In the course of ongoing negotiations with South Korea, the investigative and enforcement powers of the Korean data protection supervisory authority “PIPC” were strengthened, among other things. After the EDPB has given its opinion, the adequacy decision will need to be approved by a committee composed of representatives of the EU Member States.

The decision of an adequate level of protection pursuant to Art. 45 of the General Data Protection Regulation (GDPR) by the Commission is one of the possibilities to transfer personal data from the EU to a third-country in a GDPR-compliant manner. The adequacy decision will serve as an important addition to the free trade agreement and a strengthening of cooperation between the EU and South Korea. Věra Jourová, the Commission’s Vice-President for Values and Transparency, expressed after launching the formal procedure:

“This agreement with the Republic of Korea will improve the protection of personal data for our citizens and support business in dynamic trade relations. It is also a sign of an increasing convergence of data protection legislation around the world. In the digitalised economy, free and safe data flows are not a luxury, but a necessity.”

Especially in light of the Schrems II decision of the Court of Justice of the European Union, the adequacy decision for South Korea will be an invaluable asset for European and South Korean companies conducting business with each other.

Amazon facing potential record GDPR fine

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.

New SCCs published by the EU Commission for international data transfers

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.

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