On October 29, 2018, the Office of the Privacy Commissioner of Canada (the “OPC”) released final guidance (“Final Guidance”) regarding how businesses may satisfy the reporting and record-keeping obligations under Canada’s new data breach reporting law. The law, effective November 1, 2018, requires organizations subject to the federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) to (1) report to the OPC breaches of security safeguards involving personal information “that pose a real risk of significant harm” to individuals, (2) notify affected individuals of the breach and (3) keep records of every breach of security safeguards, regardless of whether or not there is a real risk of significant harm.
As we previously reported, the OPC had published draft guidance for which it had requested public comment. Like the draft version, the Final Guidance includes information regarding how to assess the risk of significant harm, and regarding notice, reporting and recordkeeping requirements (i.e., timing, content and form). The Final Guidance adds a requirement that a record must also include either sufficient detail for the OPC to assess whether an organization correctly applied the real risk of significant harm standard, or a brief explanation as to why the organization determined there was not a real risk of significant harm.
The Final Guidance additionally clarifies the following:
- Who is responsible for reporting and keeping records of the breach? Businesses subject to PIPEDA requirements must report breaches of security safeguards involving personal information “under its control.”
- Who is “in control” of personal information? The Final Guidance notes that in general, when an organization (the “principal”) provides personal information to a third party processor (the “processor”), the principal may reasonably be found to be in control of the personal information it has transferred to the processor, triggering the reporting and record-keeping obligations of a breach that occurs with the processor. On the other hand, if the processor uses or discloses the same personal information for other purposes, it is no longer simply processing the personal information on behalf of the principal; it is instead acting as an organization “in control” of the information, and would thereby have the obligation to notify, report, and record. The Final Guidance acknowledges that determining who has personal information “under its control” must be assessed on a case-by-case basis, taking into account any relevant contractual arrangements and “commercial realities” between organizations, such as shifting roles and evolving business models. The Final Guidance recommends that principals ensure “sufficient contractual arrangements [are] in place with the processor to address compliance” with the PIPEDA breach reporting, notification and record-keeping obligations.
- When do other entities besides affected individuals and the OPC need to be notified? If a breach triggers notification due to a real risk of significant harm, “any government institutions or organizations that the organization believes… may be able to reduce the risk of harm… or mitigate the harm” resulting from the breach must also be notified.
Though the privacy commissioner called the new law a “step in the right direction,” the commissioner also voiced concerns about the law, including that: (1) breach reports to the OPC do not contain the information that would allow for the regulator to assess the quality of an organization’s data security safeguards; (2) the lack of financial sanctions for inadequate data security safeguards misses an opportunity to incentivize organizations to prevent breaches; and (3) the government has not provided the OPC with enough resources to “analyze breach reports, provide advice and verify compliance.”