Category: GDPR

Data protection authorities around the world are taking action against the facial recognition software Clearview AI

25. February 2021

The business model of the US company Clearview AI is coming under increasing pressure worldwide. The company collected billions of facial photos from publicly available sources, especially from social networks such as Facebook, Instagram, YouTube and similar services. Data subjects were not informed of the collection and use of their facial photos. Using the photos, Clearview AI created a comprehensive database and used it to develop an automated facial recognition system. Customers of this system are in particular law enforcement agencies and other prosecutors in the US, but companies can also make use of the system. In total, Clearview AI has around 2000 customers worldwide and a database with around 3 billion images.

After a comprehensive investigation by the New York Times in January 2020 drew attention to the company, opposition to the business practice is now also being voiced by the data protection authorities of various countries.

The Hamburg Data Protection Commissioner had already issued an order against Clearview AI in January 2021. According to the order, the company was to delete the biometric data of a Hamburg citizen who had complained to the authority about the storage. The reason given for the decision was that there was no legal basis for processing sensitive data and that the company was profiling by collecting photos over a longer period of time.

Now, several Canadian data protection authorities have also deemed Clearview AI’s actions illegal. In a statement, the Canadian Privacy Commissioner describes the activities as mass surveillance and an affront to the privacy rights of data subjects. The Canadian federal authority published a final report on the investigation into the Clearview AI case. In it, the company was found to have violated several Canadian federal reports.

It is interesting that the Canadian authorities even consider the data collection to be unlawful if Clearview AI were to obtain consents from the data subjects. They argue that already the purpose of the data processing is unlawful. They demand that Clearview AI cease its service in Canada and delete data already collected from Canadian citizens.

The pressure on Clearview AI is also growing due to the fact that the companies from which the data was collected are also opposing the procedure. In addition, the association “noyb” around the data protection activist Max Schrems is dealing with Clearview AI and various European data protection authorities have announced that they will take action against the facial recognition system.

European Commission publishes draft UK adequacy decisions

On February 19th, 2021, the European Commission (EC) has published the draft of two adequacy decisions for the transfer of personal data to the United Kingdom (UK), one under the General Data Protection Regulation (GDPR) and the second for the Law Enforcement Directive. If approved, the decisions would confer adequacy status on the UK and ensure that personal data from the EU can continue to flow freely to the UK. In the EC’s announcement launching the process to adopt the newly drafted adequacy decisions Didier Reynders, Commissioner for Justice, is quoted:

We have thoroughly checked the privacy system that applies in the UK after it has left the EU. Now European Data Protection Authorities will thoroughly examine the draft texts. EU citizens’ fundamental right to data protection must never be compromised when personal data travel across the Channel. The adequacy decisions, once adopted, would ensure just that.

In the GDPR, this adequacy decision is based on Art. 45 GDPR. Article 45(3) GDPR empowers the EU Commission to adopt an implementing act to determine that a non-EU country ensures an “adequate level of protection”. This means a level of protection for personal data that is substantially equivalent to the level of protection within the EU. Once it has been determined that a non-EU country provides an “adequate level of protection”, transfers of personal data from the EU to that non-EU country can take place without further requirements. In the UK, the processing of personal data is governed by the “UK GDPR” and the Data Protection Act 2018, which are based on the EU GDPR. The UK is and has committed to remain part of the European Convention on Human Rights and “Convention 108” of the Council of Europe. “Convention 108” is a binding treaty under international law to protect individuals from abuses in the electronic processing of personal data, and in particular provides for restrictions on cross-border data flows where data is to be transferred to states where no comparable protection exists.

The GDPR adequacy decision draft addresses several areas of concern. One of these is the power of intelligence services in the UK. In this respect, the draft focuses on legal bases, restrictions and safeguards for the collection of information for national security purposes. It also details the oversight structure over the intelligence services and the remedies available to those affected. Another aspect discussed is the limitation of data subjects’ rights in the context of UK immigration law. The EC concludes that interference with individuals’ fundamental rights is limited to what is strictly necessary to achieve a legitimate purpose and that there is effective legal protection against such interference. As the UK GDPR is based on the GDPR and therefore the UK privacy laws should provide an adequate level of protection for data subjects, the main risks for EU data subjects do not lie in the current status of these laws but in possible changes of these laws in the future. For this reason, the EU Commission has built a fixed period of validity into the draft adequacy decision. If adopted, this decision would be valid for a period of four years and the adequacy finding could be extended for a further four years if the level of protection in the UK remains adequate. However, this extension would not be automatic, but subject to a thorough review. This draft marks the first time that the EU has imposed a time limit on an adequacy decision. Other adequacy decisions are subject to monitoring and regular review but are not time-limited by default.

The UK government welcomed the EC’s draft in a statement, while also calling on the EU to “swiftly complete” the process for adopting and formalizing the adequacy decisions, as the “bridging mechanism” will only remain in force until June 30th. Under the EU-UK Trade and Cooperation Agreement, the EU and UK agreed on a transition period of up to six months from January 1st, 2021, during which the UK is treated as an adequate jurisdiction (please see our blog post). The draft adequacy decisions address the flow of data from the EU to the UK. The flow of data from the UK to the EU is governed by UK legislation that has applied since 1 January 2021. The UK has decided that the EU ensures an adequate level of protection and that data can therefore flow freely from the UK to the EU.

Next, the non-binding opinion of the European Data Protection Board is sought (Art. 70 GDPR). After hearing the opinion of the European Data Protection Board, the representatives of the member states must then confirm the draft in the so-called comitology procedure. This procedure is used when the EC is given the power to implement legal acts that lay down conditions for the uniform application of a law. A series of procedures ensure that EU countries have a say in the implementing act. After the comitology procedure, the EC is free to adopt the drafts.

Data Protection and Clinical Trials – Part 1

10. February 2021

In the two and a half years since the General Data Protection Regulation (GDPR) has come into effect, a lot of organizations have gotten used to the new laws and standards it has established. However, there are still a lot of unanswered questions in certain industries, one of those industries being life sciences, and more specifically clinical trials.

The GDPR and the guidance of the European Data Protection Board (EDPB) allow for a lot of speculation, due to the fact that they are unable to fully specify the reach and definitive approach to data protection in a lot of industries.

This short series aims to give an overview on the handling of clinical trials from a data protection point of view, as well as answers to important questions that come up in day to day business in the industry.

In general, clinical trials are a processing activity according to Art. 4 (2) GDPR, therefore the basic data protection obligations are to be applied to clinical trials, such as:

  • Following the basic GDPR principles laid out in Art. 5 GDPR, namely lawfulness, fairness and transparency, purpose limitation, data minimisation, data accuracy, storage limitation, integrity, confidentiality and accountability
  • Information obligations of the controller according to Art. 13, 14 GDPR
  • Data Subjects Rights according to Art. 15 to Art. 21 GDPR
  • Obligation to have a record of processing activities according to Art. 30 para. 1, 2 GDPR
  • Security Measures need to be in place, in compliance with Art. 32 GDPR
  • Data Breach Notifications to the supervisory authority as well as the data subjects according to Art. 33, 34 GDPR
  • A Data Protection Impact Assessment has to be done prior to the start of the clinical trials, according to Art. 35 GDPR

However, the first and foremost important question regarding the processing of personal data for clinical trials is:

Which legal basis is applicable to the processing?

The EDPB addressed this issue in their Opinion on the Interplay between Clinical Trials and the GDPR, and has, in a first instance, differentiated between the processing of personal data for clinical trial protocols as primary purpose of the processing, and, on the other hand, clinical trials as a secondary purpose next to, for example, patient care.

According to the EDPB’s opinion, the applicable legal basis is to be determined by the controller on a case by case basis. However, the EDPB does give their own general assessment on the legal basis applicable for the different scenarios that have crystalized in the eyes of the EDPB:

  • Primary use of the processed personal data for clinical trials
    a. Processing activities related to reliability and safety
    -> Legal obligations of the controller, Art. 6 para. 1 (c) GDPR in conjunction with Art. 9 para. 1 (i) GDPR
    b. Processing activities purely related to research activities
    -> Task carried out in the public interest, Art. 6 para. 1 (e) GDPR in conjunction with Art. 9 para. 2 (i) or (j) GDPR
    -> Legitimate interest of the controller, Art. 6 para. 1 (f) GDPR in conjunction with Art. 9 para. 2 (j) GDPR
    -> In specific circumstances, explicit consent of the data subject, Art. 6 para. 1 (a) GDPR and Art. 9 para. 2 (a) GDPR
  • Secondary use of the clinical trial data outside the clinical trial protocol for scientific purposes
    -> Explicit consent of the data subject, Art. 6 para. 1 (a) GDPR and Art. 9 para. 2 (a) GDPR

While the guidance in assessing the legal basis for the processing is helpful, the EDPB does not address any further open issues regarding clinical trials in their opinion. Nonetheless, there are further subjects that cause confusion.

However, some of these subjects will be treated in our next part of this series, where we will have a closer look at clinical trial sponsorship from outside the EEA as well as the questions revolving around controllership roles in clinical trials.

University fined for omitted notification of a data breach

4. February 2021

The President of the Personal Data Protection Office in Poland (UODO) imposed a fine on the Medical University of Silesia in the amount of PLN 25.000 (approx. EUR 5.600). The university had suffered a data breach of which it should have notified the supervisory authority and the data subjects according to Articles 33, 34 GDPR, but failed to do so.

First indications of the data breach reached UODO in early June 2020. It was related to exams held at the end of May 2020 by videoconference on an e-learning platform. These were also being recorded. Before the exam, students were identified by their IDs or student cards, so a large amount of their personal data was documented on the recordings. After the exam was completed, the recordings were made available on the platform. However, not only the examinees had access to the platform, but also a wider group of people, about which the students had not been informed. In addition, using a direct link, any extern person could access the recordings and therefore the data of the examinees. Many students, fearing that the video would be deleted to cover up the incident, secured the file or took photographs of the computer screens to protect evidence. Eventually, the chancellor (being the decision-making unit) expressed the position that the incident of 200 people viewing the IDs of some 100-150 other people cannot be considered a personal data breach.

The controller, who was requested to clarify the situation by UODO, did not dispute the data breach. In fact, the virtual room of the platform is only available to the exam group and only those people have access to the recordings. The violation occurred because one of the employees did not close access to the virtual room after the exam. Though, the controller stated that no notification was required. In his opinion the risk to the rights or freedoms of the data subjects was low. Moreover, after the incident, the system was modified to prevent students from downloading the exam files. The controller also indicated that he identified the individuals who had done so and informed them about their criminal liability for disseminating the data.

Despite several letters from UODO, the university still omitted to report the data breach and notify the data subjects. Therefore, administrative proceedings were initiated. UODO found that the controller failed to comply with his obligations to notify both the supervisory authority and affected data subjects as well as improperly assessed the risk involved.

When imposing the fine, the President of UODO took into account the duration of the infringement (several months), the intentional action of the controller and his unsatisfactory cooperation with the supervisory authority. The fine will serve not only a repressive but also a preventive function, as it shows that the obligations arisen in connection with data breaches cannot be ignored. All the more so because an inappropriate approach to the obligations imposed by the GDPR may lead to negative consequences for those affected by the breaches.

EDPB published Guideline on Data Breach Examples for Controllers

28. January 2021

On January 18th, 2021, the European Data Protection Board (EDPB) published their draft Guidelines 01/2021 on Examples regarding Data Breach Notification.

These Guidelines are supposed to give further support to Controllers alongside the initial Guidelines on Personal Data Breach Notification under the GDPR, adopted by the Article 29 Working Party in February 2018. These new Guidelines are meant to consider different types of situations that the Supervisory Authorities have come across in the last two and a half years since the implementation of the GDPR.

The EDPB’s intention is to assist Controllers in deciding how to handle data breaches, namely by identifying the factors that they must consider when conducting risk assessments to determine whether a breach must be reported to relevant Supervisory Authorities as well as if a notification to the affected Data Subjects is necessary.

The draft Guidelines present examples of common data breach scenarios, including:

• ransomware attacks, where a malicious code encrypts the personal data and the attacker subsequently asks the controller for a ransom in exchange for the decryption code
• data exfiltration attacks, which exploit vulnerabilities in online services offered by the controller and typically aim at copying, exfiltrating and abusing personal data for malicious purposes
• human errors resulting in data breaches that are fairly common and can be both intentional and unintentional
• lost or stolen devices and paper documents
• “mispostal” scenarios, that arise from human error without malicious intent
• social engineering, such as identity theft and email exfiltration

The draft Guidelines further emphasize key elements of data breach management and response that organizations should consider, namely:

• proactively identifying system vulnerabilities in order to prevent data breaches from happening in the first place
• assessing whether a breach is likely to result in a risk to the rights and freedoms of the Data Subject, the timing of this assessment and the importance of Controllers not delaying a notification because of unclear circumstances
• implementing plans, procedures and guidelines indicating how to handle data breaches that have clear reporting lines and persons responsible for the recovery process
• organizing regular trainings for employees to raise awareness on data breach management, and the latest developments in the area
• documenting breaches in each and every case, irrespective of the risk they pose

The Guidelines will be open for public consultation until March 2nd, 2021, during which the EDPB will gather feedback on the draft.

Clubhouse Data Protection issues

Clubhouse is a new social networking app by the US company Alpha Exploration Co. available for iOS devices. Registered users can open rooms for others to talk about various topics. Participation is possible both as a speaker and as a mere listener. These rooms can be available for the public or as closed groups. The moderators speak live in the rooms and the listeners can then join the virtual room. Participants are initially muted and can be unmuted by the moderators to talk. In addition, the moderators can also mute the participants or exclude them from the respective room. As of now, new users need to be invited by other users, the popularity of these invitations started to rise in autumn 2020 when US celebrities started to use the app. With increasing popularity also in the EU, Clubhouse has come under criticism from a data protection perspective.

As mentioned Clubhouse can only be used upon an invitation. To use the option to invite friends, users must share their address book with Clubhouse. In this way, Alpha Exploration can collect personal data from contacts who have not previously consented to the processing of their data and who do not use the app. Not only Alpha Exploration, but also users may be acting unlawfully when they give the app access to their contacts. The user may also be responsible for the data processing associated with the sharing of address books. Therefore, it is not only the responsibility of Alpha Exploration, but also of the user to ensure that consent has been obtained from the contacts whose personal data is being processed. From a data protection perspective, it is advisable not to grant the Clubhouse app access to this data unless the consent of the respective data subjects has been obtained and ideally documented. Currently, this data is transferred to US servers without the consent of the data subjects in the said address books. Furthermore, it is not apparent in what form and for what purposes the collected contact and account information of third parties is processed in the USA.

Under Clubouse’s Terms of Service, and in many cases according to several national laws, users are prohibited from recording or otherwise storing conversations without the consent of all parties involved. Nevertheless, the same Terms of Service include the sentence “By using the service, you consent to having your audio temporarily recorded when you speak in a room.” According to Clubhouse’s Privacy Policy, these recordings are used to punish violations of the Terms of Service, the Community Guidelines and legal regulations. The data is said to be deleted when the room in question is closed without any violations having been reported. Again, consent to data processing should be treated as the general rule. This consent must be so-called informed consent. In view of the fact that the scope and purpose of the storage are not apparent and are vaguely formulated, there are doubts about this. Checking one’s own platform for legal violations is in principle, if not a legal obligation in individual cases, at least a so-called legitimate interest (Art. 6 (1) (f) GDPR) of the platform operator. As long as recordings are limited to this, they are compliant with the GDPR. The platform operator who records the conversations is primarily responsible for this data processing. However, users who use Clubhouse for conversations with third parties may be jointly responsible, even though they do not record themselves. This is unlikely to play a major role in the private sphere, but all the more so if the use is in a business context.

It is suspected that Clubhouse creates shadow profiles in its own network. These are profiles for people who appear in the address books of Clubhouse users but are not themselves registered with Clubhouse. For this reason, Clubhouse considers numbers like “Mobile-Box” to be well-connected potential users. So far, there is no easy way to object to Clubhouse’s creation of shadow profiles that include name, number, and potential contacts.

Clubhouse’s Terms of Use and Privacy Policy do not mention the GDPR. There is also no address for data protection information requests in the EU. However, this is mandatory, as personal data of EU citizens is also processed. In addition, according to Art. 14 GDPR, EU data subjects must be informed about how their data is processed. This information must be provided to data subjects before their personal data is processed. That is, before the data subject is invited via Clubhouse and personal data is thereby stored on Alpha Exploration’s servers. This information does not take place. There must be a simple opt-out option, it is questionable whether one exists. According to the GDPR, companies that process data of European citizens must also designate responsible persons for this in Europe. So far, it is not apparent that Clubhouse even has such data controllers in Europe.

The german “Verbraucherzentrale Bundesverband” (“VZBV”), the german federate Consumer Organisation, has issued a written warning (in German) to Alpha Exploration, complaining that Clubhouse is operated without the required imprint and that the terms of use and privacy policy are only available in English, not in German as required. The warning includes a penalty-based cease-and-desist declaration relating to Alpha Exploration’s claim of the right to extensive use of the uploaded contact information. Official responses from European data protection authorities regarding Clubhouse are currently not available. The main data protection authority in this case is the Irish Data Protection Commissioner.

So far, it appears that Clubhouse’s data protection is based solely on the CCPA and not the GDPR. Business use of Clubhouse within the scope of the GDPR should be done with extreme caution, if at all.

Norwegian DPA intends to fine Grindr

26. January 2021

The Norwegian Data Protection Authority “Datatilsynet” (in the following “DPA”) announced recently that it intends to fine the online dating provider “Grindr LLC” (in the following “Grindr”) for violations of the GDPR an administrative fine of € 9.6 Mio. (NOK 100 Mio.).

Grindr is a popular and widely used Dating App for gay, bi, trans and queer people and uses a location-based technology to connect the users. Thus, Grindr processes beside personal data also sensitive data like the sexual orientation of the users. The latter are subject to a high level of protection due to the requirements of the GDPR.

The DPA came to the conclusion that Grindr transferred personal data of its users to third parties for marketing purposes without having a legal basis for doing so. In particular, Grindr neither informed the data subjects in accordance with the GDPR nor have obtained consent from the concerned data subject. Datatilsynet considers this case as serious, because the users were not able to exercise real and effective control over the sharing of their data.

Datatilsynet has set a deadline of February 15th, 2021 for Grindr to submit its comments on the case and will afterwards make its final decision.

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

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.

German online shop receives fine of 10.4 mio. Euro for unlawful video surveillance

13. January 2021

The State Commissioner for Data Protection of Niedersachsen (“LfD Niedersachsen) has imposed a fine of 10.4 mio. Euro on notebooksbilliger.de AG, a German online shop for notebooks.

According to the press release of the LfD Niedersachsen, dated 08.01.2021, notebooksbilliger.de had been video-monitoring its employees for at least two years, including  workplaces, sales rooms, warehouses and common areas, without a legal basis. Customers were also affected by the video surveillance, as some cameras were directed at seats in the sales area of the stationary stores.

Notebooksbilliger.de claimed that the cameras were intended to prevent and solve crimes and offences as well as track the flow of goods in the warehouses. In the opinion of the LfD Niedersachsen, a company must consider milder measures to prevent thefts such as random bag checks of the employees when leaving the premises. Moreover, video surveillance is only considered lawful, if there is reasonable suspicion against specific persons and only for a limited period of time. This was not the case at notebooksbilliger as the authority investigated. Additionally, the recordings of the video surveillance were stored for 60 days in many cases, which was significantly longer than necessary.

In the meantime, notebooksbilliger.de had set up the video surveillance lawfully and had proven that to the LfD Niedersachsen.

The fine is not yet legally binding. The company has appealed the fine and published a statement in this regard on its homepage. Notebooksbilliger.de considers the amount of the fine to be disproportionate to the financial strength of the company and defends itself against the statement that it systematically monitored the performance and behavior of its employees. According to the statement, the video system was at no time designed to monitor the behavior of employees or their performance. Futhermore, despite several invitations by notebooksbilliger.de, no one of the authority had spoken to employees in the company’s warehouses or dispatch centers.

EU-UK Trade Deal in light of Data Protection

4. January 2021

Almost fit to be called a Christmas miracle, the European Union (EU) and the United Kingdom (UK) came to an agreement on December 24th, 2020. The Trade Agreement, called in full length “EU-UK Trade and Cooperation Agreement“, is set out to define new rules from the date of the UK Exit from the EU, January 1st, 2021.

President of the European Commission, Ursula von der Leyen, claimed it was a deal worth fighting for, “because we now have a fair and balanced agreement with the UK, which will protect our European interests, ensure fair competition, and provide much needed predictability for our fishing communities. Finally, we can leave Brexit behind us and look to the future. Europe is now moving on.

In light of Data Protection however, the new Trade Deal has not given much certainty of what is to come next.

Both sides are aware that an adequacy decision by the EU Commission is very important with regard to data protection and cross-border data flows. Accordingly, the EU has agreed to allow a period of four months, extendable by a further two months, during which data can be transferred between EU Member States and the UK without additional safeguards. This period was granted to give the Commission enough time to make an adequacy decision. Accordingly, data transfers can continue as before until possibly mid-2021. However, this arrangement is only valid if the UK does not change its data protection laws in the meantime.

With regard to direct marketing, the situation has not changed either: for individuals, active consent must be given unless there was a prior contractual relationship and the advertising relates to similar products as the prior contract. Furthermore, the advertising must also be precisely recognisable as such, and the possibility of revoking consent must be given in every advertising mail.

However, much else has yet to be clarified. Questions such as the competence of the UK Data Protection Authority, the Information Commissioner’s Office (ICO), as well as the fate of its ongoing investigations, have not yet been answered. As of now, companies with their original EU Headquarters in the UK will have to designate a new Lead Supervisory Authority (Art. 56 GDPR) for their business in the EU.

The upcoming months will determine if questions with high relevance to businesses’ day to day practice will be able to be answered reassuringly.

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