Recently the Dutch Senate passed the Bill on data breach notifications and sanctions. This Bill introduces higher sanctions for non-compliance with the Dutch Data Protection Act. In addition, companies will be obliged to immediately notify the Dutch Data Protection Authority ("Dutch DPA") of any data breach. Depending on the exact circumstances, persons will also have to be notified in the event their data are compromised. Non-compliance with the privacy legislation can lead to an administrative penalty for each violation up to a maximum of EUR 810,000 or 10% of the company's annual net turnover.
1. Data breach notification and mandatory internal data breach register
We increasingly see reports in the media about privacy sensitive information becoming publicly available due to a hack or security breach. Following this new legislation, companies will be obliged to notify the Dutch DPA of any security breach of the protection of personal data "that has or is likely to have serious adverse consequences for the protection of personal data" (new Article 34a(1) Dutch Data Protection Act). In addition to notifying the Dutch DPA, the individuals whose personal data have been compromised must also be notified if "there is reason to believe that the breach could have adverse consequences for their privacy" (new Article 34a(2) Dutch Data Protection Act). The practical implementation of these provisions will be worked out in specific guidelines from the Dutch DPA. In any case companies will be obliged to maintain an internal data breach register of the aforesaid breaches.
The amendment of the Dutch Data Protection Act will enable the Dutch DPA to impose fines for the violation of a large number of general obligations (see the amended Article 66 of the Dutch Data Protection Act). These fines vary from a maximum of EUR 20,250, for relatively minor violations, to a maximum of EUR 810,000, for deliberate or repeated violations. For legal entities the amount of the fine is flexible: if the highest fine category is not sufficiently punitive, the violation can be sanctioned with a fine equivalent to 10% of the company's annual net turnover.
Fines may only be imposed on the company following a binding instruction from the Dutch DPA. By way of such an instruction the DPA can inform the company what steps it should take to avoid paying a fine. However, if the violation concerned was either intentional or a matter of serious culpable negligence, the DPA is not obliged to issue such an instruction and can impose a fine directly.
3. Entry into force expected shortly
The new legislation is expected to enter into force shortly.