➢ Is the world ready for GDPR? Privacy and cybersecurity impacts are far-reaching
➢ Building General Data Protection Regulation (GDPR) implementation plan in 10 steps
An overview of the main changes under GPDR and how they differ from the previous directive
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
Increased Territorial Scope (extra-territorial applicability)
Arguably the biggest change to the regulatory landscape of data privacy comes with the extended jurisdiction of the GDPR, as it applies to all companies processing the personal data of data subjects residing in the Union, regardless of the company’s location. Previously, territorial applicability of the directive was ambiguous and referred to data process 'in context of an establishment'. This topic has arisen in a number of high profile court cases. GPDR makes its applicability very clear - it will apply to the processing of personal data by controllers and processors in the EU, regardless of whether the processing takes place in the EU or not. The GDPR will also apply to the processing of personal data of data subjects in the EU by a controller or processor not established in the EU, where the activities relate to: offering goods or services to EU citizens (irrespective of whether payment is required) and the monitoring of behaviour that takes place within the EU. Non-Eu businesses processing the data of EU citizens will also have to appoint a representative in the EU.
Under GDPR organizations in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million (whichever is greater). This is the maximum fine that can be imposed for the most serious infringements e.g.not having sufficient customer consent to process data or violating the core of Privacy by Design concepts. There is a tiered approach to fines e.g. a company can be fined 2% for not having their records in order (article 28), not notifying the supervising authority and data subject about a breach or not conducting impact assessment. It is important to note that these rules apply to both controllers and processors -- meaning 'clouds' will not be exempt from GDPR enforcement.
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Data Subject Rights
Under the GDPR, breach notification will become mandatory in all member states where a data breach is likely to “result in a risk for the rights and freedoms of individuals”. This must be done within 72 hours of first having become aware of the breach. Data processors will also be required to notify their customers, the controllers, “without undue delay” after first becoming aware of a data breach.
Right to Access
Part of the expanded rights of data subjects outlined by the GDPR is the right for data subjects to obtain from the data controller confirmation as to whether or not personal data concerning them is being processed, where and for what purpose. Further, the controller shall provide a copy of the personal data, free of charge, in an electronic fromat. This change is a dramatic shift to data transparency and empowerment of data subjects.
Right to be Forgotten
Also known as Data Erasure, the right to be forgotten entitles the data subject to have the data controller erase his/her personal data, cease further dissemination of the data, and potentially have third parties halt processing of the data. The conditions for erasure, as outlined in article 17, include the data no longer being relevant to original purposes for processing, or a data subjects withdrawing consent. It should also be noted that this right requires controllers to compare the subjects' rights to "the public interest in the availability of the data" when considering such requests.
GDPR introduces data portability - the right for a data subject to receive the personal data concerning them, which they have previously provided in a 'commonly use and machine readable format' and have the right to transmit that data to another controller.
Privacy by Design
Privacy by design as a concept has existed for years now, but it is only just becoming part of a legal requirement with the GDPR. At it’s core, privacy by design calls for the inclusion of data protection from the onset of the designing of systems, rather than an addition. More specifically - 'The controller shall..implement appropriate technical and organisational measures..in an effective way.. in order to meet the requirements of this Regulation and protect the rights of data subjects'. Article 23 calls for controllers to hold and process only the data absolutely necessary for the completion of its duties (data minimisation), as well as limiting the access to personal data to those needing to act out the processing.
Data Protection Officers
Currently, controllers are required to notify their data processing activities with local DPAs, which, for multinationals, can be a bureaucratic nightmare with most Member States having different notification requirements. Under GDPR it will not be necessary to submit notifications / registrations to each local DPA of data processing activities, nor will it be a requirement to notify / obtain approval for transfers based on the Model Contract Clauses (MCCs). Instead, there will be internal record keeping requirements, as further explained below, and DPO appointment will be mandatory only for those controllers and processors whose core activities consist of processing operations which require regular and systematic monitoring of data subjects on a large scale or of special categories of data or data relating to criminal convictions and offences. Importantly, the DPO:
➢ Must be appointed on the basis of professional qualities and, in particular, expert knowledge on data protection law and practices
➢ May be a staff member or an external service provider
➢ Contact details must be provided to the relevant DPA
➢ Must be provided with appropriate resources to carry out their tasks and maintain their expert knowledge
➢ Must report directly to the highest level of management
➢ Must not carry out any other tasks that could results in a conflict of interest.
The European Union Legislative Process
The General Data Protection Regulation is currently undergoing the Ordinary Legislative Procedure within the relevant Union legislative bodies. As the name suggests, this is the most common form of legislation creation as 89% of all proposals between 2009 and 2014 underwent this process. Currently, the GDPR has just reached an agreement in the informal negotiation stage referred to as the “Trilogues” following the adoption of the first readings by both the Parliament and the Council. The following article will outline the parties involved in the legislative process, what exactly this regulation has been through thus far, and what is yet to come.
There are three European authorities officially responsible for the legislative process, and two advisory bodies worth noting for their specific relation to data privacy:
Official Journal of the European Union, L 119, 4 May 2016
Languages and formats available:
➢ BG (pdf), BG (html)
➢ ES (pdf), ES (html)
➢ CS (pdf), CS (html)
➢ DA (pdf), DA (html)
➢ DE (pdf), DE (html)
➢ ET (pdf), ET (html)
➢ EL (pdf), EL (html)
➢ EN (pdf), EN (html)
➢ FR (pdf), FR (html)
➢ GA (pdf), GA (html)
➢ HR (pdf), HR (html)
➢ IT (pdf), IT (html)
➢ LV (pdf), LV (html)
➢ LT (pdf), LT (html)
➢ HU (pdf), HU (html)
➢ MT (pdf), MT (html)
➢ NL (pdf), NL (html)
➢ PL (pdf), PL (html)
➢ PT (pdf), PT (html)
➢ RO (pdf), RO (html)
➢ SK (pdf), SK (html)
➢ SL (pdf), SL (html)
➢ FI (pdf), FI (html)
➢ SV (pdf), SV (html)
The European Commission is the EU's executive body. It represents the interests of the European Union as a whole through a total of 28 commissioners, one from each member state, and 23,000 staff members. The body works on the basis of collective decision-making in order to complete its roles of proposing legislation, enforcing European law (with the help of the Court of Justice), representing the EU internationally, setting objectives, and managing EU policies and the budget.
The European Parliament is the only body whose members are directly elected by the citizens of the EU. It’s aim is to preserve democracy and represent the interests of the people. It holds powers over passing legislation, the EU budget, and the President and appointments of the Commission. It is made up of 751 members, elected to five year terms, with representation based upon the population of each member state.
Council of Ministers of the European Union
The Council of the Ministers of the European Union represents the governments of each member state. Its shares the power of adoption for legislation and the budget with Parliament, and also coordinates policy for the individual member states as well as foreign and security policy for the Union. Based on proposals from the Commission, the Council is the authoritative body to conclude and sign off on international agreements. The council meetings are attended by representatives (either ministers or state secretaries) who have the right to commit their countries and cast their vote.
Article 29 Data Protection Working Party
The Article 29 Working Party is an advisory body set up under the Data Privacy Directive 95/46/EC and is composed of representatives of the national data protection authorities (DPA), the EDPS and the European Commission. Its role is to advise the Commission on general data protection matters as well as laws from the EU that may affect data privacy. It also promotes the uniform application of the Data Protection Directive across the entire EU.
European Data Protection Supervisor
The European Data Protection Supervisor is the independent supervisory authority set up in 2014 by the Parliament and Council to advise EU administrations on the processing of personal data as well as supervising these bodies to ensure compliance to their own regulations. The EDPS also handles complaints and monitors new technologies related to the processing of personal data.
The ordinary legislative procedure covers the majority of what is known as secondary law, which is derived from the principles and objectives set out in EU Treaties and includes regulations, directives and decisions. It is always important to note that the GDPR is a regulation, which is immediately applicable across the Union, rather than a directive, which must be transposed into national law by each individual member state. The process begins with a proposal by the Commission, which is to be either adopted, rejected, or amended through a process of co-decision between the Parliament and the Council. The Parliament is first sent the proposal in order to make its first reading, to which is accepts or makes amendments to, before passing it on to the Council for it’s own first reading. If the council adopts the Parliament’s position, the legislation is passed, however if there are any further amendments made by the Council, all three bodies meet for the Trilogue negotiations. It is possible for a piece of legislation to continue on to a second reading by both the Parliament and the Council, and even still a final stage known as the Conciliation stage. If the legislation fails to be adopted at any stage, it can only be resurrected as a new proposal from the Commission, to repeat the entire process again.
The GDPR was initially proposed by the Commission in January of 2012, amended by the Parliament in its first reading in March of 2014, and most recently amended by the Council in its first reading in June of 2015. The first trilogue meeting was held on the 24th of June, with a stated goal from the three EU bodies to reach an agreement by the end of 2015. However, these negotiations can be extended by agreement among the leaders of each party as per the rules set out by the Joint Declaration on Practical Arrangements for the Codecision Procedure, which govern the trilogue meetings. A more robust timeline of events for the GDPR can be found here, and a discussion of the topics likely to have been the most intensely debated can be found here.
A political agreement was made on 15 December 2015, leaving the regulation to be signed in January 2016 by the Presidents and Secretaries General of both the Parliament and the Council, at which time the text will be published in the Official Journal of the European Union. The regulation will be directly binding throughout the EU following the two year grace period beginning on the date of publishing.
➢ http://www.europarl.europa.eu/aboutparliament/en/20150201PVL00004/Legislative-powers [open]
➢ http://ec.europa.eu/about/index_en.htm [open]
➢ http://www.europarl.europa.eu/aboutparliament/en/20150201PVL00002/Home [open]
➢ http://europa.eu/about-eu/institutions-bodies/council-eu/index_en.htm [open]
➢ https://secure.edps.europa.eu/EDPSWEB/edps/Cooperation/Art29 [open]
➢ https://secure.edps.europa.eu/EDPSWEB/edps/EDPS [open]
➢ http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:ai0016 [open]
➢ http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:l14522 [open]
➢ http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:l14527 [open]
➢ http://privacylawblog.fieldfisher.com/2015/unravelling-the-mysteries-of-the-gdpr-trilogues [open]
➢ http://www.eppgroup.eu/fr/news/Data-protection-reform-timetable [open]
➢ http://www.europarl.europa.eu/code/information/guide_en.pdf [open]
➢ http://privacylawblog.fieldfisher.com/2015/the-eu-dp-regulation-is-on-its-way-but-when [open]
➢ http://eur-lex.europa.eu/procedure/EN/201286 [open]
➢ http://www.consilium.europa.eu/uedocs/cmsUpload/QC3109179ENC.pdf [open]
➢ http://europa.eu/rapid/press-release_IP-15-6321_en.htm?locale=en [open]
How did we get here?
Although there is no doubt that the rules and regulations surrounding data privacy needed updating, both the GDPR and the Directive 95/46/EC are based on an even older set of principles that still hold true today. The Organisation for Economic Co-operation and Development (OECD) published its Guidelines on the Protection of Privacy and Transborder Flows of Personal Data, which was a set of recommendations endorsed by both the EU and the US that set out to protect personal data and the fundamental human right of privacy. The document was originally adopted on 23 September 1980 and proposed the following eight principles for the processing of personal data:
Collection Limitation Principle
There should be limits to the collection of personal data, data should be obtained by lawful and fair means, and where appropriate, with the knowledge or consent of the data subject.
Data Quality Principle
Personal data should be relevant to the purposes for which they are to be used, and, to the extent necessary for those purposes, should be accurate, complete and kept up-to-date.
Purpose Specification Principle
The purpose for the collection of data should be specified at the time of collection and data should not be used for anything other than its original intention without again notifying the data subject.
Use Limitation Principle
Personal data should not be used for purposes outside of the original intended and specified purpose, except with the consent of the data subject or the authority of the law.
Security Safeguards Principle
Personal data should be protected by reasonable security safeguards against such risks as loss or unauthorised access, destruction, use, modification or disclosure of data.
There should be a general policy of openness about developments, practices and policies with respect to personal data. Individuals should have easy access to information about their personal data, who is holding it, and what they are using it for.
Individual Participation Principle
An individual should have the right to know if a controller has data about him/her and to have access to that data in an intelligible form for a charge, if any, that is not excessive. An individual should also have the right to challenge a controller for refusing to grant access to his/her data, as well as challenging the accuracy of the data. Should such data be found to be inaccurate, the data should be erased or rectified.
Data controllers should be accountable for complying with the measures detailed above.
These guidelines were the basis of many national laws regarding data privacy, however, they were non-binding and the levels of data protection varied greatly even amongst different EU member states.
The Data Protection Directive 95/46/EC of 24 October 1995 was the European Union’s answer to the division of privacy regulations across the EU. It’s major goals included the harmonization of data protection laws and the transfer of personal data to “third countries” outside of the Union. It established independent public authorities called Data Protection Authorities (DPAs) in each member state in order to supervise the application of this directive and serve as the regulatory body for interactions with businesses and citizens. It also provided for the allowance of transfers of personal data to third countries, on the condition that said countries were authorized as having adequate levels of protection for the data that would be guaranteed to be comparable to those protections within the EU. Overall, the directive stays true to the original recommendation of the OECD and the core concepts of privacy as a fundamental human right.
Although Directive 95/46/EC was meant to bring together the laws of different member states, it was still a directive, which left some room for interpretation during the transposition into individual national law. This fact, along with today’s rapidly changing data landscape, has led to the necessity for another update to the regulatory environment of the EU. The incoming GDPR is a much larger piece of legislation and the changes it brings, along with the impacts it will have among businesses, can be found in our key points summary here. Most importantly, as a regulation and not a directive, it will become immediately enforceable law in all member states.
The main principles on privacy are still true to form with both the previous directive and the OECD guidelines, however, social media and cloud storage were not a reality in 1995 as only about 1% of the European population was using the internet. With modern technology, we are creating more personal data than ever before, and the processing of that data has become ubiquitous. The GDPR is meant to update the standards to fit today’s technology while remaining general to simply protect the fundamental rights of individuals throughout future waves of innovation.
There have been two recent cases brought before the Court of Justice of the European Union (CJEU) dealing with data privacy in the run-up to the GDPR. The case of Weltimmo affects the realm of one-stop-shop regulation within the EU, and the case ruling Safe Harbour invalid affects the realm of EU-US data transfers.
An already controversial topic, the idea of a one-stop-shop for data privacy regulation first arose out of the previous directive, intending to cut some of the red tape for businesses. However, the Weltimmo case on 1 October 2015 resulted in the ruling that companies must comply with local data privacy laws if they have “establishments” in member states outside that which holds their European headquarters. Although the GDPR was already attempting to fix this imperfect system before the CJEU ruling, there are still many issues to be worked out. Chief among these is the split between the DPA’s of businesses and individuals. Regulators wish to make life easier for businesses by allowing them to only register and deal with one national DPA, yet they also want individuals to be able to go to their own respective DPA, which may very well be different from the businesses’. For more analysis on the debate surrounding one-stop-shop in the GDPR, click here.
Collapse of ‘Safe-Harbour Agreement’
Only 5 days after the Weltimmo ruling, the CJEU came down with another ruling affecting data privacy, this time declaring the Safe Harbour scheme for EU-US data transfers to be invalid. While it was not the only way to transfer data to the US from the EU, around 4,500 companies relied on this framework as their main legal basis for transfers. The case was originally brought about by Austrian student Max Schrems, following the NSA revelations by Edward Snowden. It was ruled that the US public authorities were not only outside of the scope of Safe Harbour, but also have conflicting laws that prevail over the scheme in certain circumstances. It is yet to be seen if the extended scope of the GDPR (affecting all of the businesses processing EU personal data) will entirely replace the Safe Harbour scheme. There is also hope for a so called Safe Harbour 2.0 to relieve the pressure on businesses to find other legal forms of data transfer, which would likely be in effect well before the GDPR.