Welcome to the February Global Data & Privacy Update. This update is dedicated to covering all the latest legislative developments affecting the way data is managed and protected, as well as reporting on the most recent news in breaches and industry developments for the month.

General Data Protection Regulation: s29 Working Party issues Statement and Work Programme in respect of the new Regulation and the Directive on Police and Justice

On 2 February 2016, the Article 29 Working Party (the “WP29”) adopted a Statement and Work Programme setting out the next steps for the WP29 in respect of the implementation of the EU General Data Protection Regulation (the “Regulation”) and the Directive on Police and Justice, both of which it believes will significantly change the structure and the way the WP29 works today.

The Statement and Work Programme outline the priorities for the WP29 and the tasks of the WP29's subgroups during the transition from adoption to the implementation of a new Data Protection regime in Europe and the WP29's preparations to become the European Data Protection Board (the “EDPB”).

The Work Programme Based on Four Priorities

The 2016 action plan sets out the following four priorities for the Working Party:

1. Setting up the EDPB structure in terms of administration (e.g. IT, human resources, service level agreements and budget).

A WP29-EDPB task force has been set up with the Chair, the Vice -Chairs and the European Data Protection Supervisor (EDPS). A key element will be the development of the IT systems for the EDPB in the context of the one stop shop. The task force will also work on human resources, budget implications and the future rules of procedure of the EDPB.

2. Preparing the one stop shop and the consistency mechanism

It requires developments on several building blocks of the Regulation such as:

  • the designation of lead data protection authority
  • the one-stop shop on enforcement cooperation
  • the EDPB consistency mechanism

3. Issuing guidance for controllers and processors

Priority subjects have been selected by the WP29 to provide guidelines or processes to help controllers and processors to prepare for the entry into force of the Regulation. They will relate to the following topics:

  • New portability right
  • Notion of high risk, and Data Protection Impact Assessment (DPIA)
  • Certification
  • Data protection officer

4. Communication around the EDPB/GDPR

It is essential to make this new legal body of the EU already visible and identifiable as a key player which legitimately stems from the Regulation. The WP29 therefore plans:

  • Creation of an online communication tool
  • Strengthening relationships with EU institutions agencies or other supervision groups
  • Participation in external events to promote the new governance model

This action plan will be reviewed periodically and will be complemented in 2017 with new objectives and deliverables. The WP29 will consult regularly and where appropriate, the relevant stakeholders (e.g.: business representatives and civil society representatives), in order to exchange views on the implementation of the GPDR.)

Work Programme

The subgroups of the WP29 will continue to analyse and provide its opinion on relevant subject matters under the current Directive 95/46/EC, maintaining topics from the work programmes and looking at new topics to be dealt with in the two upcoming years, taking into account the transitional period before the implementation of the Regulation, and anticipating, to the extent possible, the application of this new legal framework.

The International Transfers subgroup will continue to:

  • Analyse the impact the ruling of the Court of Justice of the European Union in the case, invalidating the Safe Harbor framework, has on other international data transfer mechanisms (i.e., Standard Contractual Clauses and Binding Corporate Rules);
  • Examine and deliver an opinion on the EU-U.S. Privacy Shield once it has been released;
  • Analyse the impact of the Regulation on existing international data-transfer mechanisms.

EU to US Data Flows – the defining privacy issue for 2016

As we await the details of the agreement struck under the new EU-US Privacy Shield and whether it will in fact provide the protection for European personal data that has been promised, we look at current developments in the US which may affect the EU-US Privacy Shield:

  • On 24 February 2016, US President Barack Obama signed and enacted the Judicial Redress Act, extending the Privacy Act remedies to citizens of certified states. The Act will allow
    • The entry into force of the Judicial Redress Act will pave the way for signature of the EU-US Privacy Shield by providing EU citizens a method of redress where their personal information is shared unlawfully which was one of the issues highlighted in the Schrems case.
    • Obama said the new law makes sure data is protected under US privacy laws, “not only [for] American citizens, but also foreign citizens.”
    • The s29 Working Party issued a statement on 24 February setting out that "The signature of the Judicial Redress Act by President Obama is a historic achievement in our efforts to restore trust in transatlantic data flows, paving the way to the signature of the EU-US Data Protection Umbrella Agreement".
  • On 9 February 2016, President Obama signed and issued an Executive Order setting out the US Government's mission to uphold the highest standards for collecting, maintaining and using personal data and its establishment of a permanent Federal Privacy Council (“Privacy Council”) that will serve as the principal interagency support structure to improve the privacy practices of government agencies and entities working on their behalf.
  • Despite the positive actions which President Obama has taken to support the privacy initiative in order to move forward with the EU-US Privacy Shield, the news over the last couple of week has been dominated by the current events taking place between Apple and the Federal Bureau of Investigation.
    • In the Autumn of 2015, American privacy supporters were relieved that draconian legislation requiring companies to create backdoors for the US government to overcome encryption of individuals’ private information did not make its way through Congress. At the time the Obama administration represented that it would stop seeking such legislation and would refrain from otherwise pressuring companies to provide the government with this kind of access.
    • This week those representations have been called into question as Obama has been publicly pulled into the FBI's battle to force Apple to unlock a suspected terrorist's iPhone. In what is being marketed as a Privacy vs Security debate, the FBI is attempting to force Apple to find a work around to the Apple feature which deletes all data from an iPhone after 10 incorrect passwords in order to access the data of one of the terrorists suspected of being responsible for the San Bernardino terrorist attack. Unsurprisingly due to the circumstances in this instance, the bureau has gained public support in its efforts however if the bureau is successful it is feared that it will use this power to force Apple and others to produce these kinds of turnarounds in other investigations, putting the security of both personal data and other at risk.

Will payments for causing distress and class action suits become the norm?

Whilst we await a date for the Supreme Court hearing in Google v Vidal-Hall, we consider the wider implications of this case and other developments in this area in respect of the bringing of class action suits and nominal sums being awarded against companies who are found not to abide by data protection legislation.

Last July the Court of Appeal upheld the judgment of the High Court in Google v Vidal-Hall, which classified the cause of action for misuse of private information as a tort. It also concluded that the approach of the Data Protection Act 1998 to compensation for distress is incompatible with EU Human Rights law and should be struck down accordingly. The claimants had argued that Google misused their private information when it used cookies in a web browser to track their browser generated information.

Google was granted permission to appeal in part to the Supreme Court to challenge the ruling that section 13(2) DPA 1998 is a breach of Article 8 of the Charter of Human Rights and that it should be struck out.  The Court considered that the first part of its application to appeal, on the classification of misuse of private information as a tort, did not raise an arguable point in law. If Google succeeds, we could return to the previously understood position, in which nominal damages may be awarded for distress provided that the claimant can show loss, leaving the majority of those who suffer invasion of privacy unable to obtain any compensation for distress.

If the Supreme Court upholds the judgment of the lower courts, it is possible that class action suits for nominal sums could be brought against companies that are accused of misusing personal data, potentially have a huge financial impact on companies holding large amounts of personal data. 

Also on this topic, in Germany, legislators are on the verge of putting class action data protection suits on a statutory footing. Draft reforms to the country's Act on Actions or Injunctions, introduced in December, will give consumer protection agencies legal standing, to bring cases on behalf of consumers whose data has been misused. This will not include action in relation to trans-Atlantic data flows, however.

ICO issues new consultation on Privacy Notices

The Information Commissioner's Office (ICO) is inviting responses to its Consultation: Privacy notices,

transparency and control – a code of practice on communicating privacy information to individuals. The new consultation from the UK's DPA focusses on the requirement to make notices more eye-catching. The aim is to better convey the importance of reading the notices to consumers, so that they understand their rights in relation to the processing of their personal data. The consultation continues until 24 March 2016.

CJEU Hears Arguments Regarding Whether IP Addresses are Personal Data

On 25 February 2016, the Court of Justice of the European Union (“CJEU”) heard arguments on the following two questions referred by the German Federal Court of Justice:

  1. Do IP addresses constitute personal data and therefore cannot be stored beyond what is necessary to provide an Internet service; and
  2. Is the EU Data Protection Directive 95/46/EC contrary to a provision in the German Telemedia Act which states that a website provider may collect and process the personal data of users without their consent only to the extent it is necessary to (1) enable the general functionality of the website or (2) arrange payment

On 28 October 2014, the German court referred the questions to the CJEU for a preliminary ruling in connection with a case that arose in 2008 when a German citizen challenged the German federal government’s storage of the dynamic IP addresses of users on government websites. The citizen’s claim initially was rejected by the court of first instance.

It is expected that the CJEU will follow its decision in 2011 wherein it confirmed that IP addresses are personal data.