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On April 28, the Court of Justice of the European Union (CJEU) issued an opinion concluding that consumer protection associations are permitted to bring representative actions against infringements of personal data protection “independently of the specific infringement of a data subject’s right to the protection of his or her personal data and in the absence of a mandate to that effect.” According to the judgment, Germany’s Federal Union of Consumer Organisations and Associations brought an action for an injunction against a global social media company’s Ireland division for allegedly infringing on General Data Protection Regulation (GDPR) rules governing the protection of personal data, the combat of unfair commercial practices, and consumer protection when offering users free games provided by third parties. Germany’s Federal Court of Justice called into question whether a consumer protection association has standing to bring proceedings in the civil courts against infringements of the GDPR without obtaining a mandate from users whose data was misused. Germany’s Federal Court of Justice also observed that the GDPR could be inferred to read that “it is principally for the supervisory authorities to verify the application of the provisions of that regulation.”
In its ruling, CJEU concluded that consumer protection associations in the EU can bring representative actions against the social media company for alleged violations of the GDPR, writing that the GDPR “does not preclude national legislation which allows a consumer protection association to bring legal proceedings, in the absence of a mandate conferred on it for that purpose and independently of the infringement of specific rights of the data subjects, against the person allegedly responsible for an infringement of the laws protecting personal data . . . where the data processing concerned is liable to affect the rights that identified or identifiable natural persons derive from that regulation.” Permitting associations to bring representative actions is “consistent with the objective pursued by the GDPR . . . in particular, ensuring a high level of protection of personal data,” CJEU stated.
On March 25, the U.S. and the European Commission announced their agreement in principle on a new Trans-Atlantic Data Privacy Framework (Framework) to foster cross-border transfers of personal data from the EU to the U.S. (See also White House and European Commission fact sheets here and here.) Under the Framework, the U.S. has committed to implementing reforms and safeguards to “strengthen the privacy and civil liberties protections applicable to U.S. signals intelligence activities.” The announcement follows negotiations that began after the Court of Justice of the EU (CJEU) issued an opinion in the Schrems II case (Case C-311/18) in July 2020, holding that the EU-U.S. Privacy Shield did not satisfy EU legal requirements.
As previously covered by InfoBytes, the CJEU’s ruling (which could not be appealed) concluded that the Standard Contractual Clauses issued by the European Commission for the transfer of personal data to data processors established outside of the EU are valid. However, the Court invalidated the EU-U.S. Privacy Shield. In annulling the EU-U.S. Privacy Shield, the CJEU determined that because the requirements of U.S. national security, public interest, and law enforcement have “primacy” over the data protection principles of the EU-U.S. Privacy Shield, the data transferred under the EU-U.S. Privacy Shield would not be subject to the same level of protections prescribed by the GDPR. Specifically, the CJEU held that the surveillance programs used by U.S. authorities are not proportionally equivalent to those allowed under the EU law because they are not “limited to what is strictly necessary,” nor, under certain surveillance programs, does the U.S. “grant data subjects actionable rights before the courts against the U.S. authorities.”
According to the factsheet released by the White House, the U.S. has made “unprecedented commitments” that build on the safeguards that were in place under the annulled EU-U.S. Privacy Shield with the goal of addressing issues identified in the Schrems II decision. These commitments include (i) strengthening the privacy and civil liberties safeguards governing U.S. signals intelligence activities through measures that would limit U.S. intelligence authorities’ data collection to what is necessary to advance legitimate national security objectives; (ii) establishing a new, multi-layered redress mechanism with independent and binding authority “consist[ing] of individuals chosen from outside the U.S. Government who would have full authority to adjudicate claims and direct remedial measures, as needed”; and (iii) enhancing the U.S.’s existing rigorous and layered oversight of signals intelligence activities, and requiring U.S. intelligence agencies to “adopt procedures to ensure effective oversight of new privacy and civil liberties standards.” The factsheet further stated that participating companies and organizations will continue to be required to adhere to the EU-U.S. Privacy Shield principles, including the requirement of self-certification through the U.S. Department of Commerce. EU individuals will also continue to have access to avenues of recourse to resolve complaints against businesses and organizations participating in the Framework, including through alternative dispute resolution and binding arbitration.
The White House stated that President Biden will issue an executive order outlining the aforementioned commitments “that will form the basis of the Commission’s assessment in its future adequacy decision.” According to the announcement, the U.S. and European Commission “will now continue their cooperation with a view to translate this arrangement into legal documents that will need to be adopted on both sides to put in place this new Trans-Atlantic Data Privacy Framework.”
On March 15, the Irish Data Protection Commission (DPC) adopted a decision fining a global social media company €17 million (approximately $18.6 million) after finding that the company failed to prevent a series of data breaches in 2018. The DPC conducted an inquiry into a series of 12 data breach notifications it received between June 7, 2018 and December 4, 2018, to examine the extent that the company complied with GDPR requirements related to the processing of personal data. Following the inquiry, the DPC found that the company violated GDPR Articles 5(2) and 24(1) by failing “to have in place appropriate technical and organizational measures which would enable it to readily demonstrate the security measures that it implemented in practice to protect EU users’ data, in the context of the twelve personal data breaches.” Article 5 outlines principles related to the processing of personal data and requires companies to ensure that EU residents’ personal data is processed “in a manner that ensures appropriate security of the personal data, including protection against unauthorized or unlawful processing and against accidental loss, destruction or damage, using appropriate technical or organizational measures.” Article 24(1) requires controllers to “implement appropriate technical and organizational measures to ensure and to be able to demonstrate that processing is performed in accordance with” the GDPR. The DPC noted that because the processing under examination constituted “cross-border” processing, the “decision represents the collective views of both the DPC and its counterpart supervisory authorities throughout the EU.”
On February 24, the Irish Data Protection Commission (DPC) released their 2021 Annual Report. According to the report, the EU’s General Data Protection Regulations (GDPR) enforcement efforts have gained “significant momentum” by, among other things: (i) “resolving thousands of complaints”; (ii) “processing thousands more data breach notifications”; (iii) “imposing fines and corrective measures”; (iv) “auditing the gamut of Irish political parties”; and (v) “settling its enforcement action in relation to certain processing elements of the Public Services Card on terms protective of the data rights of citizens generally.” Among other things, the report discussed new data regulation regimes, such as the Digital Markets Act, the E-Privacy Regulation, and the Artificial Intelligence Act, “which demonstrate that the GDPR was never going to resolve all data issues in one single legislative instrument.” The report also outlined the DPC’s regulatory strategy for the next five years, which it released in December and includes placing a focus on mounting “targeted actions aimed at ensuring children and more vulnerable internet users are protected in personal data terms—without shutting off their access.”
On February 10, the French data protection agency, Commission Nationale de l’Informatique et des Libertés (CNIL), issued a decision related to a multinational technology company’s practice of transferring data collected through its analytics tool to the U.S. The analytics tool, which measures the number of user visits, assigns a unique identifier to each visit (which constitutes personal data). The identifier and associated data are then transferred by the company to the U.S. CNIL stated that it received numerous complaints related to the transfer of the collected data and noted that complaints were filed against 101 data controllers for allegedly transferring personal data to the U.S. The agency analyzed the conditions under which the collected data was being transferred, and assessed the risk potential for individuals raising the concerns. According to CNIL, the company’s trans-Atlantic data transfers “are currently not sufficiently regulated” in spite of “additional measures” adopted by the company to regulate these data transfers. These measures “are not sufficient to exclude the accessibility of this data for U.S. intelligence services,” CNIL determined, noting that “in the absence of an adequacy decision (which would establish that this country offers a sufficient level of data protection with regard to the GDPR) concerning transfers to the United States, the transfer of data can only take place if appropriate guarantees are provided for this flow in particular.”
CNIL stated that these data transfers violate Article 44 et seq. of the GDPR (which governs the transfer of personal data to a third country or to an international organization), and ordered a “website manager to bring this processing into compliance with the GDPR, if necessary by ceasing to use the [analytics tool] functionality (under the current conditions) or by using a tool that does not involve a transfer outside the EU.” The website operator must comply within one month. Additional compliance orders were also issued to other website operators using the analytics tool. CNIL also recommended that the analytics tool should only be used to produce anonymous statistical data, and stated that it has launched an evaluation program to determine solutions that are exempt from consent.
According to sources, the Luxembourg President of the Administrative Tribunal issued an ordinance on December 17 partially suspending a July decision issued by the Luxembourg National Commission for Data Protection (CNPD) against a global technology corporation for alleged violations of the EU’s General Data Protection Regulations (GDPR). As previously covered by InfoBytes, the CNPD fined the corporation $746 million euro (approximately $888 million USD), issuing a decision against the corporation’s European headquarters, claiming the corporation’s “processing of personal data did not comply with the [GDPR].” The decision—which required corresponding practice revisions, the details of which were not disclosed—followed an investigation started in 2018 when a French privacy group claiming to represent the interests of Europeans filed complaints against several large technology companies to ensure European consumer data is not manipulated for commercial or political purposes. The December ordinance suspends orders that required the corporation to make a number of changes to its data processes by January 15 or risk additional daily fines. Sources stated that the CNPD’s order “had not been formulated in clear, precise and free of uncertainty terms” that would allow the corporation to meet the conditions. The corporation’s appeal is still pending.
On November 10, the UK Supreme Court issued a judgment in an appeal addressing whether a claimant can bring data privacy claims in a representative capacity against a global technology company in a class action suit. The claimant sought compensation on behalf of a class under section 13 of the Data Protection Act 1998 (DPA 1998) for damages suffered when the tech company allegedly tracked millions of iPhone users’ internet activity in England and Wales over a period of several months between 2011 and 2012, and used the collected data without users’ knowledge or consent for commercial purposes. The DPA 1998 was replaced by the UK General Data Protection Regulation and the Data Protection Act 2018 but was in force at the time of the alleged breaches and is applicable to this claim, the Court explained in a press summary. The Court also noted that, except in antitrust cases, UK legislation does not allow class actions and Parliament has not yet legislated to establish a class action regime related to data protection claims. The Court noted that the claimant sought to use “same interest” precedent, which allows a claim to be brought “by or against one or more persons who have the same interest as representatives of any other persons who have that interest.”
The Court reasoned that the case was “doomed to fail” because “the claimant seeks damages under section 13 of the DPA 1998 for each individual member of the represented class without attempting to show that any wrongful use was made by [the tech company] of personal data relating to that individual or that the individual suffered any material damage or distress as a result of a breach of the requirements of the Act by [the tech company].” The Court added that users’ “loss of control” over personal data did not constitute “damage” under section 13 of the DPA 1998 because the users were not shown to have lost money or suffer distress. If the case had been allowed to proceed, the tech company could have faced a £3 billion damages award.
On September 2, the Irish Data Protection Commission (Commission) announced that a final decision was reached in a General Data Protection Regulation (GDPR) investigation into a U.S.-based messaging service’s handling of individuals’ personal information. The final Article 65 decision, published by the European Data Protection Board (EDPB), imposes a €225 million on the company, and resolves an investigation into whether the company met its transparency obligations with respect to its data processing activities. The Commission alleged that the company violated provisions of the GDPR through the way it processed users’ and non-users’ data, as well as in the way it processed and shared data with other companies’ owned by the parent global social media company.
According to the final decision, “a number of concerned supervisory authorities” raised objections to aspects of the draft decision, taking issue, among other things, with the size of the proposed fine, which was originally set between €30 and €50 million. Because the Commission was unable to reach a consensus with the objecting concerned supervisory authorities, a dispute resolution process was triggered. The EDPB ultimately ordered the Commission to reassess and increase its proposed fine. In addition to imposing the administrative fine, the Commission also ordered the company “to bring its processing into compliance by taking a range of specified remedial actions.”
Recently, a global technology corporation disclosed a $746 million euro (approximately $888 million USD) fine issued by the Luxembourg National Commission for Data Protection (CNPD) for alleged violations of the EU’s General Data Protection Regulations (GDPR). The corporation’s Form 10-Q for second quarter 2021 states that on July 16, the CNPD issued a decision against the corporation’s European headquarters, claiming its “processing of personal data did not comply with the [GDPR].” In addition to the fine, the decision also requires corresponding practice revisions, the details of which were not disclosed. The corporation noted that the decision is “without merit” and stated it intends to defend itself “vigorously” in this matter. According to sources, the decision follows an investigation started in 2018 when a French privacy group claiming to represent the interests of Europeans filed complaints against several large technology companies to ensure European consumer data is not manipulated for commercial or political purposes.
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