Category: International Data Transfers
10. April 2018
When the General Data Protection Regulation (GDPR) comes into force on May 25th this year, not only in Europe the handling of personal data will have to change. Companies operating with customer data of EU citizens also have to observe the GDPR worldwide. But which non-European legal entity has to show consideration for the European Data Protection?
In accordance with Article 3 (1) GDPR, the GDPR applies to the processing of data of natural persons in so far as it takes place in the context of an activity of the controller (see Article 4 (7) GDPR) or a processor (see Article 4 (8) GDPR) in the Union. This applies irrespective of whether the data processing takes place on EU territory or in a third country.
If the data subject lives in the EU but the controller / data processor is located outside the EU, the scope of the GDPR according to Article 3 (2) GDPR is applicable if the data processing is related to goods or services offered within the EU (see Art. 3 (2) lit. a)). The GDPR applies cumulatively if the processor carries out a profiling on a EU-citizen (see Art. 3 (2) lit. b)).
Furthermore, the GDPR is also applied outside the EU territory to a controller / data processor who isn’t resident of the EU, if the law of a Member State becomes applicable on the basis of international public law (e.g. in consular or diplomatic matters, or on the basis of private international law).
21. March 2018
A trading deal between two companies often includes a high number of coincidentally transferred personal data. From the 25th May 2018 on the new GDPR regulates the data flow in the European Economic Area (EEA) that consists of all the members of the European Union, Iceland, Liechtenstein and Norway. The future status of Great Britain will be primarily the status of a third country.
Otherwise, business relationships to companies from non-EU or EEA States (like the USA, China, …) cannot guarantee the data protection standard of the GDPR automatically. Especially since the overruling of the “safe-harbour” agreement of the EU with the USA by the European Court of Justice (ECJ), every company that transfers data over the Atlantic is obligated to fulfil the data protection by itself. The European Commission (EC) recommends in its communication from the 10th January 2017 the use of so-called standard contractual clauses (SCC) or binding corporate rules (BCR), when an EU-based company transfers personal data to a non-EU based company or non-EU based entity of its corporate group.
This has a wide impact to the daily trade deals that are made all over Europe with third country companies. The EU recommends the data protection going hand in hand with the trading deals, to ensure the relatively high data protection level, which is based on Article 8 of the Charter of Fundamental Rights of the European Union. Especially until the ePrivacy-Regulation of the EU is not in force, every company has to ensure the standard of the GDPR by implementing a privacy policy, in which transfers of data to a third country has to be mentioned.
In conclusion, a company that trades with third country companies needs to enter a special data protection contract with the trading partner and needs to inform its clients by its privacy policy.
27. February 2018
Through the new General Data Protection Regulation (GDPR) there will be established a new EU Data Protection Authority, the so-called European Data Protection Board (the “Board”). The Board replaces the Article 29 Working Party starting May 25th 2018, when the GDPR enters into force. The board has its own legal personality.
Pursuant to Art. 68 (3) GDPR the Board is composed of the head of one supervisory authority of each Member State and of the European Data Protection Supervisor. It works independent and on its own initiative by issuing its opinion pursuant to Art. 64 GDPR or adopting a binding decision pursuant to Art. 65 GDPR, especially in the written cases of Art. 65 (1) GDPR. The Board hence has the authority to adopt one of the most powerful legal acts of the union from Art. 288 of the Treaty of the European Union (TFEU).
While harmonizing the data protection in the EU, the Boards main task is to maintain the consistent application of the GDPR by the national supervisory authority through the Consistency mechanism pursuant to Art. 63 GDPR. Within this Consistency mechanism, the Board comments the so-called Binding Corporate Rules (BCR), which are necessarily given by national data protection authorities for international data transfer of a company group.
The Board also has the final say if the national data protection authorities cannot reach an agreement concerning the implementation of the GDPR.
21. December 2017
The French National Data Protection Commission (CNIL) has found violations of the French Data Protection Act in the course of an investigation conducted in order to verify compliance of WhatsApps data Transfer to Facebook with legal requirements.
In 2016, WhatsApp had announced to transfer data to Facebook for the purpose of targeted advertising, security and business intelligence (technology-driven process for analyzing data and presenting actionable information to help executives, managers and other corporate end users make informed business decisions).
Immediately after the announcement, the Working Party 29 (an independent European advisory body on data protection and privacy, set up under Article 29 of Directive 95/46/EC; hereinafter referred to as „WP29“) asked the company to stop the data transfer for targeted advertising as French law doesn’t provide an adequate legal basis.
„While the security purpose seems to be essential to the efficient functioning of the application, it is not the case for the “business intelligence” purpose which aims at improving performances and optimizing the use of the application through the analysis of its users’ behavior.“
In the wake of the request, WhatsApp had assured the CNIL that it does not process the data of French users for such purposes.
However, the CNIL currently not only came to the result that the users’ consent was not validly collected as it lacked two essential aspects of data protection law: specific function and free choice. But it also denies a legitimate interest when it comes to preserving fundamental rights of users based on the fact that the application cannot be used if the data subjects refuse to allow the processing.
WhatsApp has been asked to provide a sample of the French users’ data transferred to Facebook, but refused to do so because being located in die United States, „it considers that it is only subject to the legislation of this country.“
The inspecting CNIL thus has issued a formal notice to WhatsApp and again requested to comply with the requirements within one month and states:
„Should WhatsApp fail to comply with the formal notice within the specified timescale, the Chair may appoint an internal investigator, who may draw up a report proposing that the CNIL’s restricted committee responsible for examining breaches of the Data Protection Act issue a sanction against the company.“
11. December 2017
The Working Party 29 (WP29), an independent European advisory body on data protection and privacy, has evaluated the Privacy Shield agreement (framework for transatlantic exchanges of personal data for commercial purposes between the European Union and the United States, see also our report on One year of Privacy Shield).
In its joint review, the WP29 focusses on the assessment of commercial aspects and governmental access to personal data for national security purposes.
Though acknowledging progress, the WP29 still finds unresolved issues on both sides.
It criticizes the lack of guidance and clear information on the principles of the Privacy Shield, especially with regards to onward transfers, the rights of the data subject and remedies.
The US authorities are further requested to clearly distinguish the status of data processors from that of data controllers.
Another important issue to be tackled is the handling of Human Resource (HR) data and the rules governing automated-decision making and profiling.
Also, the process of self-certification for companies requires improvement.
In terms of access by public authorities, the WP 29 concludes that the US government has made effort to become more transparent.
However, some of the main concerns still are to be resolved by May 25th, 2018.
The WP 29 calls for further evidence or legally binding commitments to confirm non-discrimination and the fact that authorities don’t get access on a generalized basis to data transferred to the USA from the EU.
Aside from these matters, an Ombudsperson still needs to be appointed and her/his exact powers need to be specified. According to the WP 29, the existing powers to remedy non-compliance are not sufficient.
In case no remedy is brought to these concerns in the given time frames, the members of WP29 will take appropriate action, including bringing the Privacy Shield Adequacy decision to national courts for them to make a reference to the Court of Justice of the European Union (CJEU) for a preliminary ruling.
16. March 2017
Ultimately, the Italian police department (in cooperation with Garante – Italian data protection authority) has carried out an investigation, which has revealed a violation of a data protection legislation and specific actions aimed at introducing the legal circulation of money onto the Chinese market.
Four agent companies and one multinational have turned out to split money transfers for remaining sub-threshold under this perspective. Under these circumstances an unlawful massive personal data processing of unaware individuals (payments and senders) has been performed. What is more, some of the records were up to be filed by not existing individuals or even deceased. Other records however, were left blank.
Taking into account all of the gathered facts, which actually indicated that personal data were used in order to unlawfully avoid the money laundering provisions, a wide-ranging Italian data protection authority sanctioning initiative has been launched. As a result, Garante has issued the highest fines ever in Europe.
Given the number of violations of data protection provisions, the Garante has set the whole amount of sanctions up to a total sum of almost 11,000,000 euros (850,000; 1,260,000; 1,590,000 1,430,000 euros for the agent companies and 5,880,000 euros for the multinational company).
It is believed that such a strict data protection authorities sanction will encourage individual data controllers and companies to accelerate their compliance with the upcoming GDPR (May 2018).
6. March 2017
Vera Jourová, the European Union’s justice commissioner, is willing to suspend Privacy Shield in case the Trump administration budges from the result of the negotiation between the Obama administration and the European Union.
The Privacy Shield pact was meant to replace the Safe Harbor decision of the European Commission that was overturned in October 2015 by the European Court of Justice (ECJ). The pact’s purpose is to enable the transfer of EU citizens’ personal data to the US while ensuring the protection of those data.
Concerns about the effectiveness of the Privacy Shield came up as President Trump passed an executive order in January 2017 saying “agencies shall, to the extent consistent with applicable law, ensure that their privacy policies exclude persons who are not United States citizens or lawful permanent residents from the protections of the Privacy Act regarding personally identifiable information.”
Although the US Department of Justice already affirmed the US’s commitment to the Privacy Shield, Jourová stays sceptical and wants to keep an eye on the US government’s stance. In case EU citizens’ personal data are not safe in the US Jourová will not hesitate to suspend the pact.
8. February 2017
Background
The Court of Justice of the European Union has invalidated the U.S.-EU Safe Harbor framework (October 2015), which was replaced by the Privacy Shield on 12 July 2016.
“Enhancing Public Safety in the Interior of the United States” (Executive Order) was issued by the US President Donald Trump on 25th January 2017. This act’s main aim was the immigration laws enforcement in the U.S.
In its Section 14 we may read: “Agencies shall, to the extent consistent with applicable law, ensure that their privacy policies exclude persons who are not United States citizens or lawful permanent residents from the protections of the Privacy Act regarding personally identifiable information.”
The so-called “Umbrella Agreement” (signed on 2nd December 2016) between the U.S. and EU, ensured the personal data transfers for law enforcement purposes. This agreement applies also to the pre-existing agreements between the U.S. and EU along with the various Mutual Legal Assistance Treaties (“MLATs”), Passenger Name Records Agreement, and Safe Harbor framework.
Part 19 of the Umbrella Agreement enables every European citizen to seek judicial review in case of an unlawfully disclosure individual’s personal data or denial of the right to access or amend the personal data in agency’s possession.
Before the Umbrella Agreement, there was no such legal possibility, although the Privacy Act of 1974 extended those rights to permanent residents of the U.S. and its citizens. EU would only agree with the Umbrella Agreement once U.S. extends protections to the European citizens under the Privacy Act, so that the U.S. is expected to comply with the Umbrellas Agreement Art. 19.
Moreover, in February 2016 the Judicial Redress Act was passed as the U.S. and EU got along with each other, which extended protections of the Privacy Act (disclosure, access, amendment) to citizens of “covered countries’’ (as named in the Judicial Redress Act).
On 17th of January 2017 Loretta Lynch (new former U.S. Attorney General) designated “covered jurisdictions’’ (as named in the Judicial Redress act) to include in the Judicial Redress Act all the EU Members apart from Denmark and the UK, which has become effective on 1st February.
The Attorneys General designation however, is not subject to administrative or judicial review (within the Judicial Redress Act).
Conclusion
Donald Trump’s Executive Order is believed not to affect the Judicial Redress Act (which is applicable law in the context of data transfers for law enforcement purposes) in terms of the Privacy Act rights to the European citizens extension, so as to say that the Executive Order should not impact Privacy Shield Framework’s legal viability.
Unresolved is still an aspect of “covered countries’’ designation, as the Judicial Redress Act includes a “covered countries’’ designations removal process, which is still subject of a dispute.
13. January 2017
On January 10th 2017 the European Commission released a Proposal for a Regulation concerning the respect for private life and the protection of personal data in electronic communications.
The presented proposal pursues the implementation of the EU’s Digital Single Market strategy. The Digital Single Market strategy aims to increase trust in and the security of digital services. With the upcoming General Data Protection Regulation further legislative measures have to be implemented in order to build a coherent regulatory framework.
The proposed Regulation will repeal the Directive 2002/58/EC Regulation on Privacy and Electronic Communications, also known as the “E-Privacy Directive”, which insufficiently regards current technological developments. Especially so-called Over the Top communication services, such as the messenger services WhatsApp, Skype or Facebook Messenger, are not regulated by the E-Privacy Directive and lack sufficient privacy for its users. According to the proposed Regulation, the content of messages as well as metadata will have to remain confidential and / or anonymized unless the user consented otherwise.
In addition, the new rules set out a strategic approach relating to international data transfer. By engaging in so-called “adequacy decisions” the transfer of personal data will be simplified while a high level of privacy remains.
The proposed Regulation further contains rules to ensure that personal data, which is processed by EU institutions and bodies, is handled according to the measures of the General Data Protection Regulation.
Finally, since the nature of the Proposal is a regulation instead of a directive, it should have a stronger impact for both consumers and businesses.
Ideally the legislative process will be finalized by May 25th 2018, when the General Data Protection Regulation will enter into force.
19. December 2016
The European Article 29 Working Party just published Guidelines after their December plenary meeting.
These Guidelines include explanations in terms of the role of the Data Protection Officer, the mechanisms for data portability and how a lead authority will be established with regard to the one-stop shop. Furthermore, some guidance on the EU-U.S. Privacy Shield was also included.
When do you have to appoint a DPO?
Article 37 (1) of the GDPR states that a DPO has to be appointed
a) where the processing is carried out by a public authority or body
b) where the core activities of the controller or the processor consist of processing operations that require regular and systematic monitoring of data subjects on a large scale
or c) where the core activities of the controller or the processor consist of processing on a large scale of special categories of data.
How does the Article 29 Working Party define these requirements?
“Core activities” are defined as the “key operations necessary to achieve the controller’s or processor’s goals.” The Article 29 Working Party gives the following example: a hospital needs to process health data as core to its ultimate activity of providing health care services.
Therefore, companies have to ask themselves whether the processing of personal data is a inextricably part for archiving their goals.
“Large scale” refers to the number of data subjects and not the company’s size.
The Working Party 29 defines the following identification aspects for a “large scale”:
- The number of data subjects affected.
- The volume of data and/or the range of different data items being processed.
- The duration, or permanence, of the data processing activity.
- The geographical extent of the processing activity.
However, the Working Party 29 welcomes feedback on the Guidelines from stakeholders through January 2017. Comments can be sent to just-article29wp-sec@ec.europa.eu and presidenceg29@cnil.fr.
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