Since 25 May 2018, two of the most hotly debated questions have been: (1) when can we expect the newly-strengthened and upgraded powers of data protection authorities across Europe to be kicked into gear; and (2) who, or what, will be the first major scalp? It appears we may be approaching an answer to these questions, and the key players will surprise nobody: the Irish Office of the Data Protection Commission (“DPC”); and Facebook.

The DPC and the internet behemoth look set to take part in the first large-scale engagement of the investigatory powers of the DPC under the General Data Protection Regulation (“GDPR”) and the Irish Data Protection Act 2018 (the “2018 Act”). The intention to conduct a formal investigation involving Facebook was announced by the DPC on Wednesday last, following almost a week of fall-out from the news that the social network had suffered a data breach that impacted upon 50 million users globally (with a potential effect on a further 40 million accounts) arising out of three software flaws in its systems.

Why the GDPR, and why Ireland? Whilst the DPC indicated that it believed less than 10% of affected accounts belonged to users within the EU, the fact of European citizens’ involvement has brought the region’s new data protection regime into play. In addition, as Facebook’s “main establishment” in the EU is in Ireland, the DPC is the company’s “lead supervisory authority” in the EU and, consequently, has overall responsibility for the GDPR’s enforcement. In accordance with notification requirements under the GDPR, Facebook informed the DPC of the breach within 72 hours of its occurrence (interestingly, it was noted by the DPC that the notification itself “lacked detail”).

Understanding the next steps Media outlets around the world have focused on the potential financial impact of an administrative fine being placed on Facebook following the breach (estimated at up to $1.6 billion, 4% of global annual turnover), the effect of the negative publicity on the company’s share prices, and the long-term impact on the network’s reach and influence on economies, politics and society more broadly. However, in order to fully understand the possible financial and reputational effects, more basic questions as regards the investigation itself need to be considered in the first instance, including:

  1. what the DPC will be investigating;
  2. on what basis will the investigation be carried out;
  3. powers of the DPC in conducting the investigation; and
  4. the manner in which the investigation will progress.

What is being investigated? According to the DPC itself, the investigation will examine “compliance with [Facebook’s] obligation under the GDPR to implement appropriate technical and organisational measures to ensure the security and safeguarding of the personal data it processes”. Deciphering the jargon, it is a requirement of the GDPR that those handling personal data ensure that such data is subject to an adequate level of security (although, in the spirit of the GDPR’s principles-based approach, no specific requirements are set out in the regulation itself).

Essentially, the DPC wants to examine the security measures employed by Facebook to protect the personal data of European users in order to determine whether they constituted “appropriate technical and organisational measures to ensure a level of security appropriate to the risk”. In this regard, account must be taken of the particular risks presented by the processing in question. If the security implemented does not, in the view of the DPC, meet the standards appropriate to the risk, Facebook would be in breach of its obligations under GDPR.

Conduct of the investigation The DPC has a range of powers under the 2018 Act, including the power to initiate investigations in order to ascertain whether an infringement of data protection laws has occurred or is occurring. This investigation can commence on foot of a complaint received from a data subject (in the case of Facebook, as the DPC is the lead supervisory authority this complaint could be made anywhere within the EU), or, importantly, can be commenced of the DPC’s own volition.

The 2018 Act prescribes how this formal investigation will be conducted. Authorised officer(s) of the DPC will be instructed to carry out the investigation and submit a report following its completion; these instructions may limit the extent of the investigation or specify the matters or circumstances to be investigated. The data controller, in this case Facebook Ireland, must be notified of the fact of the investigation as well as the matters to which it relates and must be given a minimum of seven days (and a maximum of 28 days) to respond. In conducting the investigation, an authorised officer may do any or all of the following:

  1. enter and search a premises in which any activity connected with the processing of personal data takes place or the officer believes such activity takes place (a search warrant is necessary only in the case of a private dwelling);
  2. inspect, copy, remove or retain documents, information or data equipment from a premises;
  3. operate data equipment (and receive such assistance from any capable person as is necessary in order to do so, including being provided with passwords);
  4. issue notices requesting information;
  5. require the controller/processor (or an employee thereof) to provide information, records or documents and, if necessary, appear before the officer in order to provide such information or documents;
  6. question the controller/processor/employee (and administer an oath in order that the controller/processor/employee’s answers are given under oath);
  7. if necessary, seek an order from the Circuit Court requiring compliance by a controller/processor/employee with requests under nos. 1 to 6 above;
  8. conduct a full, private oral hearing, to include; a. requiring persons to attend; b. requiring persons to produce documents, records or other information; and c. examining and cross-examining the individual; and
  9. make applications to the High Court requesting restriction of data processing where it considers that there is an urgent need to do so.

The extent of these powers is clear. As well as obtaining any and all information necessary, a DPC investigation can effectively be conducted, insofar as is permitted under law, in the same manner as a court proceeding – evidence given by an individual will have the same quality as testimony given in court. Importantly, however, any statements or admissions made by a person shall not be admissible as evidence in proceedings for an offence brought against that person.[1] It is certainly arguable that this provision, when combined with the implications of untruthful responses (i.e. perjury), will allow for more open and honest engagement by individuals when being questioned by the DPC than if a fear of prosecution were to hang over the evidence.

Investigation report Following the investigation, the authorised officers will produce a report. A draft of this report must be provided to the controller/processor and he/she/it must be given a minimum of 28 days to make submissions to the officer on the content of the report. Following these submissions, if any, a suitably revised report is then to be submitted to the DPC by the authorised officer, and this revised report must state the officer’s belief as to whether or not an infringement of data protection law is occurring and his or her grounds for this belief. If the officer believes an infringement is occurring or has occurred he or she should not, however, include any recommendation as to corrective action or punishment; this is a matter for the DPC upon review of the report. As we know, these corrective actions include the power to impose heavy fines and/or require the controller/processor to take such actions as may be specified by the DPC. In reviewing the report, the DPC may request further information from or actions by the officer, may itself conduct an oral hearing and/or may seek submissions directly from the controller/processor.

The future Now we know the DPC will be conducting a formal investigation into Facebook, and we understand:

  1. why it has decided to conduct such an investigation;
  2. how the investigation will proceed; and
  3. the powers that are held by the DPC and its authorised officers in conducting the investigation.

What we do not know is the outcome. For Facebook, possible outcomes include any punishment it may face as a result of the investigation but also the publicity associated with the fact of the investigation occurring. For the DPC, the public, international media and industries with significant, personal data-based activities will be examining how effectively it uses its powers and how willing it is to impose the huge fines which have been promised/threatened. More broadly, there may be outcomes for us all regarding both our future relationship with Facebook/social media generally and the protection we expect our personal data to receive from those for which our data is their business.