Category: European Court of Justice

CJEU considers representative actions admissible

29. April 2022

Associations can bring legal proceedings against companies according to a press release of the European Court of Justice (CJEU).

This is the conclusion reached by the Court in a decision on the proceedings of the Federation of German Consumer Organisations (vzbv), which challenged Facebook’s data protection directive. Accordingly, it allows a consumer protection association to bring legal proceedings, in the absence of a mandate conferred on it for that purpose and independently of the infringement of specific rights of the data subjects, against the person allegedly responsible for an infringement of the laws protecting personal data, The vzbv is an institution that is entitled to bring legal proceeding under the GDPR because it pursues an objective in the public interest.

Specifically, the case is about third-party games on Facebook, in which users must agree to the use of data in order to be able to play these games on Facebook. According to the association, Facebook has not informed the data subjects in a precise, transparent and understandable form about the use of the data, as is actually prescribed by the General Data Protection Regulation (GDPR). The Federal Court of Justice in Germany (BGH) already came to this conclusion in May 2020 however, it was not considered sufficiently clarified whether the association can bring legal proceedings in this case.

The EU Advocate General also concluded before that the association can bring legal proceeding in a legally non-binding statement.

Thus, the CJEU confirmed this view so that the BGH must now finally decide on the case of vzbv vs. facebook. It is also important that this decision opens doors for similar collective actions against other companies.

ECJ against data retention without any reason or limit

6. April 2022

In the press release of the judgment of 5.4.2022, the ECJ has once again ruled that the collection of private communications data is unlawful without any reason or limit. This reinforces the rulings of 2014, 2016 and 2020, according to which changes are necessary at EU and national level.

In this judgment, the ECJ states that the decision to allow data retention as evidence in the case of a long-standing murder case is for the national court in Ireland.

Questions regarding this issue were submitted in 2020 by Germany, France and Ireland. The EU Advocate General confirmed, in a legally non-binding manner, the incompatibility of national laws with EU fundamental rights.

However, a first exception to data retention resulted from the 2020 judgment, according to which, in the event of a serious threat to national security, storage for a limited period and subject to judicial review was recognized as permissible.

Subsequently, a judgment in 2021 stated that national law must provide clear and precise rules with minimum conditions for the purpose of preventing abuse.

According to the ECJ, an without cause storage with restriction should be allowed in the following cases:

  • When limited to specific individuals or locations;
  • No concrete evidence of crime necessary, local crime rate is sufficient;
  • Frequently visited locations such as airports and train stations;
  • When national laws require the identity of prepaid cardholders to be stored;
  • Quick freeze, an immediate backup and temporary data storage if there is suspicion of crime.

All of these are to be used only to combat serious crime or prevent threats to national security.

In Germany, Justice Minister Marco Buschmann is in favor of a quick freeze solution as an alternative that preserves fundamental rights. However, the EU states are to work on a legally compliant option for data retention despite the ECJ’s criticism of this principle.

EDPS sanctions European Parliament for unlawfully transfered data to the US

25. January 2022

The European Data Protection Supervisor (EDPS) ruled that the European Parliament (EP) offended against a judgement of the European Court of Justice (ECJ) by transferring data to the US using US origin tech tools on their website for COVID-19 tests. This judgement relies on a complaint that involves misleading cookie banners, uncertain data privacy statements and unlawful data transfers from the EU to the US.

The ECJ makes clear that the transfer of personal data from the EU to the US is topic of strict conditions. Websites can only transfer data to the US if a certain security level is given. In this case there was not such a security level available.

The misleading cookie banners were so vague that the cookies were not listed in total and some differences between language options became appearent. Therefore, the website users could not give their valid consent.

Furthermore, the data privacy information were not clear and transparent, in that they refer to an incorrect legal basis for the processing. The given references were also in violation of transperency and requests of information.

Even during the process the EP tried to improve the technical deficits.

The EDPS issued a caution because in contrast to national data protection authorities it can only sentence under certain conditions, which were not given in this case. In result, it imposed a cease and desist order with a one month deadline for the EP to adjust the compliance.

EU Advocate General : Member States may allow consumer protection associations to bring representative actions against infringements of the protection of personal data

16. December 2021

On December 2nd, EU Advocate General Richard de la Tour published an opinion in which he stated that EU member states may allow consumer protection associations to bring representative actions against infringements of rights that data subjects derive directly from the General Data Protection Regulation (“GDPR”). In doing so, he agrees with the legal opinion of the Federation of the Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband e.V. (Federation of German Consumer Organisations (“vzbv”)), which has filed an action for an injunction against Facebook in German courts for non-transparent use of data.

The lawsuit of the vzbv is specifically about third-party games that Facebook offers in its “App Center”. In order to play games like Scrabble within Facebook, users must consent to the use of their data. However, Facebook had not provided information about the use of the data in a precise, transparent and comprehensible manner, as required by Article 13 GDPR. The Federal Court of Justice in Germany (“Bundesgerichtshof”) already came to this conclusion in May 2020, but the Bundesgerichtshof considered it unclear whether associations such as the vzbv have the legal authority to bring data protection violations to court. It argues, inter alia, that it can be inferred from the fact that the GDPR grants supervisory authorities extended supervisory and investigatory powers, as well as the power to adopt remedial measures, that it is primarily the task of those authorities to monitor the application of the provisions of the Regulation. The Bundesgerichtshof therefore asked the Court of Justice of the European Union (“CJEU”) to interpret the GDPR. The Advocate General now affirms the admissibility of such an action by an association, at least if the EU member state in question permits it. The action for an injunction brought by the vzbv against Facebook headquarters in Ireland is therefore deemed admissible by the EU Advocate General.

The Advocate General states, that

the defence of the collective interests of consumers by associations is particularly suited to the objective of the General Data Protection Regulation of establishing a high level of personal data protection.  

The Advocate General’s Opinion is not legally binding on the CJEU. The role of the Advocate General is to propose a legal solution for the cases to the CJEUin complete independence. The judges of the Court will now begin their consultations in this case.

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.

CJEU ruling on One-Stop-Shop mechanism

On June 15th, 2021, the Court of Justice of the European Union (CJEU) ruled that “under certain conditions, a national supervisory authority may exercise its power to bring any alleged infringement of the GDPR before a court of a member state, even though that authority is not the lead supervisory authority”. It grants each supervisory authority the power to bring matters within its supervisory area before the courts. If a non-lead supervisory authority wishes to bring cross-border cases to court, it can do so under the so-called emergency procedure under Article 66 of the GDPR.

The General Data Protection Regulation (GDPR) provides that the data protection authority of the country in which a company has its principal place of business in the EU has primary jurisdiction for cross-border proceedings against such companies (the so-called one-stop-shop principle). Facebook and a number of other international companies have their EU headquarters in Ireland. The Irish data protection authority has been criticised several times for dragging out numerous important cases against tech companies. The CJEU’s ruling is likely to lead to more enforcement proceedings by local data protection authorities.

In 2015 – before the GDPR came into force – the Belgian data protection authority filed a lawsuit in Belgian courts against Facebook’s collection of personal data via hidden tracking tools. These tracking tools even tracked users without Facebook accounts. After the GDPR came into force, Facebook argued that lawsuits against data protection violations could only be filed in Ireland. A court of appeal in Brussels then referred the question to the ECJ as to whether proceedings against Facebook were admissible in Belgium. This has now been confirmed by the ECJ. The Belgian court is now free to make a final decision (please see our blog post).

The CJEU has now ruled that, in principle, the lead data protection authority is responsible for prosecuting alleged GDPR violations if they involve cross-border data processing. The data processing must therefore take place in more than one Member State or have an impact on individuals in several member states. However, it is also specified that the “one-stop-shop” principle of the GDPR obliges the lead authority to cooperate closely with the respective local supervisory authority concerned. In addition, local data protection authorities may also have jurisdiction pursuant to Art. 56 (2) and Art. 66 GDPR. According to the CJEU, if the respective requirements of these provisions are met, a local supervisory authority may also initiate legal proceedings. The CJEU has clarified that actions by non-lead data protection authorities can still be upheld if they are based on the Data Protection Directive, the predecessor of the GDPR.

The EU consumer association BEUC called the ruling a positive development. BEUC Director General Monique Goyens said:

Most Big Tech companies are based in Ireland, and it should not be up to that country’s authority alone to protect 500 million consumers in the EU.

While Facebook’s associate general counsel Jack Gilbert said:

We are pleased that the CJEU has upheld the value and principles of the one-stop-shop mechanism, and highlighted its importance in ensuring the efficient and consistent application of GDPR across the EU.

Portuguese DPA Orders Suspension of U.S. Data Transfers by National Institute of Statistics

29. April 2021

On April 27, 2021, the Portuguese Data Protection Authority “Comissão Nacional de Proteção de Dados” (CNPD) ordered the National Institute of Statistics (INE) to suspend any international data transfers of personal data to the U.S., as well as other countries without an adequate level of protection, within 12 hours.

The INE collects different kinds of data from Portuguese residents from 2021 Census surveys and transfers it to Cloudfare, Inc. (Cloudfare), a service provider in the U.S. that assists the surveys’ operation. EU Standard Contractual Clauses (SCCs) are in place with the U.S. service provider to legitimize the data transfers.

Due to receiving a lot of complaints, the CNPD started an investigation into the INE’s data transfers to third countries outside of the EU. In the course of the investigation, the CNDP concluded that Cloudfare is directly subject to U.S. surveillance laws, such as FISA 702, for national security purposes. These kinds of U.S. surveillance laws impose a legal obligation on companies like Cloudfare to give unrestricted access to personal data of its customers and users to U.S. public authorities without informing the data subjects.

In its decision to suspend any international data transfers of the INE, the CNPD referred to the Schrems II ruling of the Court of Justice of the European Union. Accordingly, the CNPD is if the opinion that personal data transferred to the U.S. by the INE was not afforded a level of data protection essentially equivalent to that guaranteed under EU law, as further safeguards have to be put in place to guarantee requirements that are essentially equivalent to those required under EU law by the principle of proportionality. Due to the lack of further safeguards, the surveillance by the U.S. authorities are not limited to what is strictly necessary, and therefore the SCCs alone do not offer adequate protection.

The CNPD also highlighted that, according to the Schrems II ruling, data protection authorities are obliged to suspend or prohibit data transfers, even when those transfers are based on the European Commission’s SCCs, if there are no guarantees that these can be complied with in the recipient country. As Cloudfare is also receiving a fair amount of sensitive data n relation to its services for the INE, it influenced the CNDP’s decision to suspend the transfers.

French Government seeks to disregard CJEU data retention of surveillance data ruling

9. March 2021

On March 3rd, POLITICO reported that the French government seeks to bypass the Court of Justice of the European Union’s (CJEU) ruling on limiting member states’ surveillance activities of phone and internet data, stating governments can only retain mass amounts of data when facing a “serious threat to national security”.

According to POLITICO, the French government has requested the country’s highest administrative court, the Council of State, to not follow the CJEU’s ruling in the matter.

Last year in October, the CJEU ruled that several national data retention rules were not compliant with EU law. This ruling included retention times set forth by the French government in matters of national security.

The French case in question opposes the government against digital rights NGOs La Quadrature du Net and Privacy International. After the CJEU’s ruling, it is now in the hands of the Council of State in France, which will have to decide on the matter.

A hearing date has not yet been decided, however POLITICO sources state that the French government is trying to bypass the CJEU’s ruling by presenting the argument of the ruling going against the country’s “constitutional identity”. This argument, first used back in 2006, is seldomly used, however can be referred to in order to avoid applying EU law at national level.

In addition, the French government accuses the CJEU to have ruled out of its competence, as matters of national security remain solely part of national competence.

The French government did not want to comment on the ongoing process, however has had a history of refusing to adopt EU court rulings into national law.

CJEU Advocate General’s opinion on GDPR’s One-Stop-Shop mechanism

26. January 2021

On January 13, 2021, the Advocate General (“AG”) of the Court of Justice of the European Union (“CJEU”) published an opinion in the case of Facebook Ireland Limited, Facebook INC, Facebook Belgium BVBA v the Belgian Data Protection Authority “Gegevensbeschermingsautoriteit” (“Belgian DPA”), addressing the General Data Protection Regulation’s (“GDPR”) One-Stop-Shop mechanism.

In 2015, the Belgian DPA initiated several legal proceedings against Facebook Group members in local courts. The allegation was that Facebook placed cookies on devices of Belgian users without their consent, thereby collecting data in an excessive manner. Facebook argued that with the GDPR becoming applicable in 2018, the Belgian DPA lost its competence to continue the legal proceedings, as Facebook’s lead supervisory authority under the GDPR is the Irish Data Protection Commission. The Belgian Court of Appeal referred several questions to the CJEU, including whether the GDPR’s One-Stop-Shop regime prevented national DPA’s from initiating proceedings in the national courts when it is not the lead DPA.

The AG responded that, in his opinion, the lead DPA has the general jurisdiction over cross-border data processing, while a national DPA may exceptionally bring proceedings before its own national courts. The national DPA’s right is subject to the One-Stop-Shop regime and cooperation and consistency mechanism of the GDPR. Thus, each national DPA has the competence to initiate proceedings against possible infringements affecting its territory, the significant regulatory role of the lead DPA limits this competence with respect to cross-border data processing.

One of the concerns expressed by the Belgian DPA was the risk of insufficient enforcement if only lead DPA’s may act against organizations that do not comply with the GDPR. In this regard, the GA emphasizes that Art. 61 GDPR specifically provides for appropriate mechanisms to address such concerns. National DPA’s have the possibility to ask the lead DPA for assistance in investigations, and if such assistance is not provided, the national DPA concerned may take action itself.

In certain circumstances, the AG sees the possibility for national DPAs not acting as lead DPA to initiate proceedings before their national court, if

  • the DPA is acting outside of the material scope of the GDPR; e.g., because the processing does not involve personal data;
  • cross-border data processing is carried out by public authorities, in the public interest, or to comply with legal obligations;
  • the processor is not established in the EU;
  • there is an urgent need to act to protect the rights and freedoms of data subjects (Art. 66 GDPR);
  • the lead DPA has decided not to process a case.

With regards to data subjects, the AG notes that data subjects can bring action against any controller or processor before the court of their Member State and may file a complaint with their Member State’s DPA, regardless of which Member State’s DPA is the lead DPA.

The AG’s opinion is not legally binding on the CJEU, although the CJEU will take it into account. A final judgment of the CJEU is expected in the coming months. Thereafter, the Belgian Court of Appeal will have to decide its case in accordance with the CJEU’s judgment. The CJEU’s decision will most likely have a lasting impact on the division of roles between lead DPAs and other national DPAs, as well as on the ability of national DPAs to take enforcement actions into their own hands.

EDPS considers Privacy Shield replacement unlikely for a while

18. December 2020

The data transfer agreements between the EU and the USA, namely Safe Harbor and its successor Privacy Shield, have suffered a hard fate for years. Both have been declared invalid by the European Court of Justice (CJEU) in the course of proceedings initiated by Austrian lawyer and privacy activist Max Schrems against Facebook. In either case, the court came to the conclusion that the agreements did not meet the requirements to guarantee equivalent data protection standards and thus violated Europeans’ fundamental rights due to data transfer to US law enforcement agencies enabled by US surveillance laws.

The judgement marking the end of the EU-US Privacy Shield (“Schrems II”) has a huge impact on EU companies doing business with the USA, which are now expected to rely on Standard Contractual Clauses (SCCs). However, the CJEU tightened the requirements for the SCCs. When using them in the future, companies have to determine whether there is an adequate level of data protection in the third country. Therefore, in particular cases, there may need to be taken additional measures to ensure a level of protection that is essentially the same as in the EU.

Despite this, companies were hoping for a new transatlantic data transfer pact. Though, the European Data Protection Supervisor (EDPS) Wojciech Wiewiórowski expressed doubts on an agreement in the near future:

I don’t expect a new solution instead of Privacy Shield in the space of weeks, and probably not even months, and so we have to be ready that the system without a Privacy Shield like solution will last for a while.

He justified his skepticism with the incoming Biden administration, since it may have other priorities than possible changes in the American national security laws. An agreement upon a new data transfer mechanism would admittedly depend on leveling US national security laws with EU fundamental rights.

With that in mind, the EU does not remain inactive. It is also trying to devise different ways to maintain its data transfers with the rest of the world. In this regard, the EDPS appreciated European Commission’s proposed revisions to SCCs, which take into consideration the provisions laid down in CJEU’s judgement “Schrems II”.

The proposed Standard Contractual Clauses look very promising and they are already introducing many thoughts given by the data protection authorities.

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