Category: European Union

265 million euro fine for Meta

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.

EDPS takes legal action against Europol’s new regulation

27. September 2022

ON June 28th 2022, two new provisions of the amended Europol regulation came into force. These changes are considered worrying by the European Data Protection Supervisor (EDPS), as they have a direct impact on the data processing of individuals in the European Union: based on these provisions, the new regulation allows the Europol to retroactively process large volumes of data, even of individuals with no links to criminal activity.

Specifically, before these new provisions were passed, individuals could expect that if their data was gathered by Europol it would be processed within six months in order to establish whether the individual was involved in illicit activities or not, and if the former was the case, that the data related to that person would be deleted. With these modifications, Europol would be allowed to store and process these data even if the individual was found not part of any wrongdoing.

In an effort to stop these changes to effectively come into force, the EDPS issued an order on January 3rd 2022 to amend the new provisions including a precisely determined deletion period for data related to individuals not connected to unlawful activities. Seen as the order was ignored by Europol, on September 16th the EDPS requested that the European Court of Justice (ECJ) annuls these two provisions. The authorities stated that this proceeding by Europol is a clear violation of the individual’s fundamental rights.

Furthermore, it is clear that by overriding a direct order by the European data protection watchdogs and by introducing such amendments the independent controlling power of the supervising authority is undermined: this could set a dangerous precedent by which authorities in the European Union could foresee possible counter – reactions of the legislative power to override their supervising activities depending on political will. This would result in a clear violation of the European Charter of Fundamental Rights, since there would be a concrete risk of undermining the independence of a controlling authority by making it subject to undue political pressure or interference.

Artificial Intelligence and Personal Data: a hard co-existence. A new perspective for the EU

7. July 2022

In the last decades AI has had an impressive development in various fields. At the same time, with each step forward the new machines and the new processes they are programmed to perform need to collect way more data than before in order to function properly.

One of the first things that come to mind is how can the rise of AI and the principle of data minimization, as contained in Art. 5 para. 1 lit. c) GDPR, be reconciled? At first glance it seems contradictory that there may be a way: after all, the GDPR clearly states that the number of personal data collected should be as small as possible. A study carried out by the Panel for the Future of Science and Technology of the European Union suggests that, given the wide scope (referring to the exceptions contained in the article) conceded by the norm, this issue could be addressed by measures like pseudonymization. This means that the data collected by the AI is deprived of every information that could refer personal data to a specific individual without additional information, thus lowering the risks for individuals.

The main issue with the current legal framework of the European Union regarding personal data protection is the fact that certain parts have been left vague, which causes uncertainty also in the regulation of artificial intelligence. To address this problem, the EU has put forward a proposal for a new Artificial Intelligence Act (“AIA”), aiming to create a common and more “approachable” legal framework.

One of the main features of this Act is that it divides the application of artificial intelligence in three main categories of risk levels:

  1. Creating an unacceptable risk, thus prohibited AIs (e.g. systems that violate fundamental rights).
  2. Creating a high risk, subject to specific regulation.
  3. Creating a low or minimum risk, with no further regulation.

Regarding high-risk AIs, the AIA foresees the creation of post-market monitoring obligations. If the AI in question violates any part of the AIA, it can then be forcibly withdrawn from the market by the regulator.

This approach has been welcomed by the Joint Opinion of the EDPB – EDPS, although the two bodies stated that the draft still needs to be more aligned with the GDPR.

Although the Commission’s draft contains a precise description of the first two categories, these will likely change over the course of the next years as the proposal is undergoing the legislative processes of the EU.

The draft was published by the European Commission in April 2021 and must still undergo scrutiny from the European Parliament and the Council of the European Union. Currently, some amendments have been formulated and the draft is still under review by the Parliament. After the Act has passed the scrutiny, it will be subject to a two – year implementation period.

Finally, a question remains to be answered: who shall oversee and control the Act’s implementation?It is foreseen that national supervisory authorities shall be established in each EU member state. Furthermore, the AIA aims at establishing a special European AI Board made up of representatives both of the member States and of the European Commission, which will also be the chair. Similar to the EDPB, this Board shall have the power to issue opinions and recommendations, and ensure the consistent application of the regulation throughout the EU.

EU: Commission publishes Q&A on SCCs

30. May 2022

On 25 May 2022, the European Commission published guidance outlining questions and answers (‘Q&A’) on the two sets of Standard Contractual Clauses (‘SCCs’), on controllers and processors (‘the Controller-Processor SCCs’) and third-country data transfers (‘the Data Transfer SCCs’) respectively, as adopted by the European Commission on 4 June 2021. The Q&A are intended to provide practical guidance on the use of the SCCs. They are based on feedback from various stakeholders on their experiences using the new SCCs in the months following their adoption. 

Specifically, 44 questions are addressed, including those related to contracting, amendments, the relationship to other contract clauses, and the operation of the so-called docking clause.  In addition, the Q&A contains a specific section dedicated to each set of SCCs. Notably, in the section on the Data Transfer SCCs, the Commission addresses the scope of data transfers for which the Data Transfer SCCs may be used, highlighting that they may not be used for data transfers to controllers or processors whose processing operations are directly subject to the General Data Protection Regulation (Regulation (EU) 2016/679) (‘GDPR’) by virtue of Article 3 of the GDPR. Further to this point, the Q&A highlights that the Commission is in the process of developing an additional set of SCCs for this scenario, which will consider the requirements that already apply directly to those controllers and processors under the GDPR. 

In addition, the Q&A includes a section with questions on the obligations of data importers and exporters, specifically addressing the SCC liability scheme. Specifically, the Q&A states that other provisions in the broader (commercial) contract (e.g., specific rules for allocation of liability, caps on liability between the parties) may not contradict or undermine liability schemes of the SCCs. 

Additionally, with respect to the Court of Justice of the European Union’s judgment in Data Protection Commissioner v. Facebook Ireland Limited, Maximillian Schrems (C-311/18) (‘the Schrems II Case’), the Q&A includes a set of questions on local laws and government access aimed at clarifying contracting parties’ obligations under Clause 14 of the Data Transfer SCCs. 

In this regard, the Q&A highlights that Clause 14 of the Data Transfer SCCs should not be read in isolation but used together with the European Data Protection Board’s Recommendations 01/2020 on measures that supplement transfer tools. 

Twitter fined $150m for handing users’ contact details to advertisers

Twitter has been fined $150 million by U.S. authorities after the company collected users’ email addresses and phone numbers for security reasons and then used the data for targeted advertising. 

According to a settlement with the U.S. Department of Justice and the Federal Trade Commission, the social media platform had told users that the information would be used to keep their accounts secure. “While Twitter represented to users that it collected their telephone numbers and email addresses to secure their accounts, Twitter failed to disclose that it also used user contact information to aid advertisers in reaching their preferred audiences,” said a court complaint filed by the DoJ. 

A stated in the court documents, the breaches occurred between May 2013 and September 2019, and the information was apparently used for purposes such as two-factor authentication. However, in addition to the above-mentioned purposes, Twitter used that data to allow advertisers to target specific groups of users by matching phone numbers and email addresses with advertisers’ own lists. 

In addition to financial compensation, the settlement requires Twitter to improve its compliance practices. According to the complaint, the false disclosures violated FTC law and a 2011 settlement with the agency. 

Twitter’s chief privacy officer, Damien Kieran, said in a statement that the company has “cooperated with the FTC at every step of the way.” 

“In reaching this settlement, we have paid a $150m penalty, and we have aligned with the agency on operational updates and program enhancements to ensure that people’s personal data remains secure, and their privacy protected,” he added. 

Twitter generates 90 percent of its $5 billion (£3.8 billion) in annual revenue from advertising.  

The complaint also alleges that Twitter falsely claimed to comply with EU and U.S. privacy laws, as well as Swiss and U.S. privacy laws, which prohibit companies from using data in ways that consumers have not approved of. 

The settlement with Twitter follows years of controversy over tech companies’ privacy practices. Revelations in 2018 that Facebook, the world’s largest social network, used phone numbers provided for two-factor authentication for advertising purposes enraged privacy advocates. Facebook, now Meta, also settled the matter with the FTC as part of a $5 billion settlement in 2019. 

 

Record GDPR fine by the Hungarian Data Protection Authority for the unlawful use of AI

22. April 2022

The Hungarian Data Protection Authority (Nemzeti Adatvédelmi és Információszabadság Hatóság, NAIH) has recently published its annual report in which it presented a case where the Authority imposed the highest fine to date of ca. €670,000 (HUF 250 million).

This case involved the processing of personal data by a bank that acted as a data controller. The controller automatically analyzed recorded audio of costumer calls. It used the results of the analysis to determine which customers should be called back by analyzing the emotional state of the caller using an artificial intelligence-based speech signal processing software that automatically analyzed the call based on a list of keywords and the emotional state of the caller. The software then established a ranking of the calls serving as a recommendation as to which caller should be called back as a priority.

The bank justified the processing on the basis of its legitimate interests in retaining its customers and improving the efficiency of its internal operations.

According to the bank this procedure aimed at quality control, in particular at the prevention of customer complaints. However, the Authority held that the bank’s privacy notice referred to these processing activities in general terms only, and no material information was made available regarding the voice analysis itself. Furthermore, the privacy notice only indicated quality control and complaint prevention as purposes of the data processing.

In addition, the Authority highlighted that while the Bank had conducted a data protection impact assessment and found that the processing posed a high risk to data subjects due to its ability to profile and perform assessments, the data protection impact assessment did not provide substantive solutions to address these risks. The Authority also emphasized that the legal basis of legitimate interest cannot serve as a “last resort” when all other legal bases are inapplicable, and therefore data controllers cannot rely on this legal basis at any time and for any reason. Consequently, the Authority not only imposed a record fine, but also required the bank to stop analyzing emotions in the context of speech analysis.

 

Dutch DPA issues highest fine for GDPR violations

14. April 2022

On April 7th, 2022, the Dutch Data Protection Authority, Autoriteit Persoonsgegevens, imposed the highest-ever fine for data protection violations, amounting to € 3.7 million. It is directed against the Minister of Finance, who was the data controller for the Tax and Customs Administration’s processing operations. The reason for this is the years of unlawful processing of personal data in the Fraud Notification Facility application, a blacklist in which reports and suspected fraud cases were registered.

The investigation revealed several violations of principles and other requirements of the GDPR. Firstly, there was no legal basis for the processing of the personal data included in the list, making it unlawful under Art. 5 (1) (a), Art. 6 (1) GDPR. Secondly, the pre-formulated purposes of collecting the personal data were not clearly defined and thus did not comply with the principle of purpose limitation stipulated in Art. 5 (1) (b) GDPR. Moreover, the personal data were often incorrect and non-updated, which constituted a violation of the principle of accuracy according to Art. 5 (1) (d) GDPR. Since the personal data were also kept longer than the applicable retention period allowed, they were not processed in accordance with the principle of storage limitation as laid down in Art. 5 (1) (e) GDPR. Furthermore, the security of the processing according to Art. 32 (1) GDPR was not ensured by appropriate technical and organizational measures. In addition, the internal Data Protection Officer was not involved properly and in a timely manner in the conduct of the Data Protection Impact Assessment pursuant to Art. 38 (1), 35 (2) GDPR.

The amount of the fine imposed results from the severity, consequences and duration of the violations. With the Fraud Notification Facility, the rights of 270,000 people have been violated in over six years. They were often falsely registered as (possible) fraudsters, which caused them to suffer serious consequences. It left many unable to obtain a payment agreement or eligible for debt rescheduling and therefore, in financial insecurity. The Tax and Customs Administration also used discriminatory practices. Employees were instructed to assess the risk of fraud based on people’s nationality and appearance, among other factors.

The DPA also considered previous serious infringements in determining the amount of the fine. The Minister of Finance was penalized in 2018 for inadequate security of personal data, in 2020 for illegal use of the citizen service number in the VAT identification number of self-employed persons, and in 2021 for the discriminatory and illegal action in the childcare benefits scandal. Following the latter affair, the Fraud Notification Facility was shut down in February 2020.

The Minister of Finance can appeal the decision within six weeks.

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.

Italian DPA imposes a 20 Mio Euro Fine on Clearview AI

29. March 2022

The Italian data protection authority “Garante” has fined Clearview AI 20 million Euros for data protection violations regarding its facial recognition technology. Clearview AI’s facial recognition system uses over 10 billion images from the internet and prides themself to have the largest biometric image database in the world. The data protection authority has found Clearview AI to be in breach of numerous GDPR requirements. For example, fair and lawful processing was not carried out within the data protection framework, and there was no lawful basis for the collection of information and no appropriate transparency and data retention policies.

Last November, the UK ICO warned of a potential 17 million pound fine against Clearview, and in this context, and also ordered Clearview to stop processing data.

Then, in December, the French CNIL ordered Clearview to stop processing citizens’ data and gave it two months to delete all the data it had stored, but did not mention any explicit financial sanction.

In Italy, Clearview AI must now, in addition to the 20 million Euro fine, not only delete all images of Italian citizens from its database. It must also delete the biometric information needed to search for a specific face. Furthermore, the company must provide a EU representative as a point of contact for EU data subjects and the supervisory authority.

Belgian DPA declares technical standard used for cookie banner for consent requests illegal

28. March 2022

In a long-awaited decision on the Transparency and Consent Framework (TCF), the Belgian data protection authority APD concludes that this technical standard, which advertisers use to collect consent for targeted advertising on the Internet, does not comply with the principles of legality and fairness. Accordingly, it violates the GDPR.

The ADP’s decision is aligned with other European data protection authorities and has consequences for cookie banners and behavioral online advertising in the EU. The advertising association IAB Europe, which develops and operates the TCF system, must now delete the personal data collected in this way and pay a fine of 250,000 euros. In addition, conditions have been determined for the advertising industry under which the TCF may continue to be used at all.

Almost all companies, including advertising companies such as Google or Amazon, use the mechanism to pass on users’ presumed consent to the processing of their personal data for personalized advertising purposes. This decision will have a major impact on the protection of users’ personal data. This is also confirmed by Hielke Hijmans from APD.

The basic structure of the targeted advertising system is that each visit to a participating website triggers an auction among the providers of advertisements. Based on the desired prices and the user’s data profile, among other things, a decision is made in milliseconds as to which advertisements she will see. For this real-time bidding (RTB) to work, the advertising companies collect data to compile target groups for ads.

If users accept cookies or do not object that the use of their data is in the legitimate interest of the provider, the TCF generates a so-called TC string, which contains information about consent decisions. This identifier forms the basis for the creation of individual profiles and for the auctions in which advertising spaces and, with them, the attention of the desired target group are auctioned off, and is forwarded to partners in the OpenRTB system.

According to the authority, the TC strings already constitute personal data because they enable users to be identified with the IP address and the cookies set by the TCF. In addition, IAB Europe is said to be jointly legally responsible for any data processing via the framework, although IAB Europe has not positioned itself as a data processor, only as a provider of a standard.
The TCF envisions advertising providers invoking a “legitimate interest” in data collection in cookie banners that pop up all the time, rather than asking for consent. This would have to be prohibited, for example, for it to be lawful. The principles of privacy by design and by default are also violated, since consent is literally tricked by design tricks, the data flows are not manageable, and revocation of consent is hardly possible.

Pages: 1 2 3 4 5 6 7 8 Next
1 2 3 8