Giant database leak exposes data on 220 million Brazilians

28. January 2021

On January 19th, 2021, the dfndr lab, PSafe’s cybersecurity laboratory, reported a leak in a Brazilian database that may have exposed the CPF number and other confidential information of millions of people.

According to the cybersecurity experts, who use artificial intelligence techniques to identify malicious links and fake news, the leaked data they have found contains detailed information on 104 million vehicles and about 40 million companies. Overall, the leak poses a risk to close to 220 million Brazilians.

The personal data contained in the affected database includes names, birthdates and individual taxpayer registry identification, with distinct vehicle information, including license plate numbers, municipality, colour, make, model, year of manufacture, engine capacity and even the type of fuel used. The breach both affects almost all Brazilian citizens, as well as authorities.

In a press release, the director of the dfndr lab, Emilio Simoni, explained that the biggest risk following this data leak is that this data will be used in phishing scams, in which a person is induced to provide more personal information on a fake page.

In their statement, PSafe does not disclose either the name of the company involved or how the information was leaked, whether it was due to a security breach, hacker invasion or easy access. However, regardless of the cause of the leak, the new Brazilian Data Protection Security Law provides for fines that can reach R $ 50 million for an infraction of this type.

EDPB published Guideline on Data Breach Examples for Controllers

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.

WhatsApp’s privacy policy update halted

22. January 2021

Already at the beginning of December 2020, first indications came up signaling that WhatsApp will change its terms of service and privacy policy. Earlier this year, users received the update notice when launching the app on their device. It stated that the new terms concern additional information on how WhatsApp processes user data and how businesses can use Facebook hosted services to store and manage their WhatsApp chats. The terms should be accepted by February 8th, 2021, to continue using the chat service. Otherwise, the deletion of the account was suggested, because it will not be possible to use WhatsApp without accepting the changes. The notice has caused all sorts of confusion and criticism, because it has mistakenly made many users believe that the agreement allows WhatsApp to share all collected user data with company parent Facebook, which had faced repeated privacy controversies in the past.

Users’ fears in this regard are not entirely unfounded. As a matter of fact, outside the EU, WhatsApp user data has already been flowing to Facebook since 2016 – for advertising purposes, among other things. Though, for the EU and the United Kingdom, other guidelines apply without any data transfer.

The negative coverage and user reactions caused WhatsApp to hastily note that the changes explicitly do not affect EU users. Niamh Sweeney, director of policy at WhatsApp, said via Twitter that it remained the case that WhatsApp did not share European user data with Facebook for the purpose of using this data to improve Facebook’s products or ads.

However, since the topic continues to stir the emotions, WhatsApp felt compelled to provide clarification with a tweet and a FAQ. The statements make it clear once again that the changes are related to optional business features and provide further transparency about how the company collects and uses data. The end-to-end encryption, with which chat content is only visible to the participating users, will not be changed. Moreover, the new update does not expand WhatsApp’s ability to share data with Facebook.

Nevertheless, despite all efforts, WhatsApp has not managed to explain the changes in an understandable way. It has even had to accept huge user churn in recent days. The interest in messenger alternatives has increased enormously. Eventually, the public backlash led to an official announcement that the controversial considered update will be delayed until May 15th, 2021. Due to misinformation and concern, users shall be given more time to review the policy on their own in order to understand WhatsApp’s privacy and security principles.

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.

Apple launched higher data protection standard

Already announced in Apples Worldwide Developers Conference last June a new privacy feature for Apple’s App Store has now been launched with iOs 14.3 (we reported). Originally iOs 14 should have had these update, but based on critic of app developers and big tech giants the launch has been postponed to give the concerned persons and companies more time to be prepared for the changes.

The update requires the App providers to answer several questions regarding data privacy. The requirement to answer the questions only apply in case an app is uploaded to the App Store for the first time or in case an update is published by the App provider. So at this point, not many apps come up with this additional information. However, Apple’s own apps and for example the Facebook Messenger have already been updated regarding this information.

The process is as follows: In the course of uploading an app or update the provider must answer questions regarding inter alia which categories of personal data are collected by the app or third parties within the app, if the data is used to track the user and with which data sources and other data the obtained data is linked. The inserted information is afterwards displayed in the App Store below the rating of the app.

According to Apple, the goal is that the information in the App Store should make it easier for the user to know what the privacy status of an app is. However, it should be noted that the information is based solely on the (voluntary) information provided by the provider and is not verified by Apple.

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Hackers access Microsoft source codes

7. January 2021

In December 2020 cybersecurity firm FireEye reported that it had been attacked by what they called a “highly sophisticated cyber threat actor”, during which copies of its red team tool kit were stolen. Also in December, FireEye disclosed that it discovered attacks on SolarWinds’ tool “Orion” while investigating its own security breach. In a SEC filing, SolarWinds said up to 18,000 of 33,000 Orion customers may have been affected. The attacks may have begun in early 2020.

A group believed to be state-sponsored used contaminated updates for the “Orion” network management software. They accessed a SolarWinds system used to update Orion and from there inserted malicious code into legitimate software updates that were then distributed to customers. The affected versions are 2019.4 through 2020.2.1, which were released between March and June 2020. It is still unclear how the attackers initially gained access to SolarWinds’ network. Security researcher Vinoth Kumar stated on Twitter he contacted SolarWinds in 2019 regarding an FTP access uploaded to GitHub in 2018. Using the password “solarwinds123,” he was able to upload a file to the SolarWinds server as proof of the vulnerability.

Agencies and companies that have been penetrated by the Orion software include the U.S. Treasury Department, the U.S. Department of Homeland Security, the National Nuclear Security Administration, parts of the Pentagon, Belkin, Cisco, Intel, Microsoft, and Nvidia.
The FBI and other U.S. security agencies issued a joint statement calling the attack “significant and ongoing”. Also, agencies and companies in other countries such as Belgium, Canada, Germany, Israel, Mexico, Spain, the United Kingdom, and the United Arab Emirates were affected.

So far, it is unclear what damage, if any, was caused by the attacks and what data was accessed. According to reports, in some cases, internal communications were accessed and various documents were copied, with documents relating to ongoing product development, in particular, attracting the attackers’ interest. In an interview published by the U.S. State Department, U.S. Secretary of State Michael R. Pompeo claimed Russia was responsible for the attack.

“This was a very significant effort, and I think it’s the case that now we can say pretty clearly that it was the Russians that engaged in this activity.”

Among those affected, Microsoft is being most viral regarding the hack. In a blog post published on December 31, the company even admitted that the hackers had access to its source codes. According to that post, they were able to view the code but not modify it. Still, this could pose a significant security risk, as the attackers can now study the software’s architecture and look for possible entry points. Microsoft won’t reveal which tool’s source codes the attackers had access to. It also identified more than 40 of its own customers who were targeted.
Microsoft President Brad Smith wrote:

“This is not just an attack on specific targets but on the trust and reliability of the world’s critical infrastructure in order to advance one nation’s intelligence agency.”

This cyber-attack shows the importance of strong cybersecurity for every company and private user, as even tech-giants and fundamental U.S. authorities were victims of this attack. In particular, access to Microsoft’s source codes could be the ground for further attacks on high- and low-profile targets, as Microsoft’s tools are used in businesses of all sizes and by individuals as well.

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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