On 16 December 2016, the Article 29 Working Party (the "WP29") published three guidance papers on key implementation issues arising under the EU General Data Protection Regulation (the "GDPR"). The WP29 is an independent advisory body composed of representatives from data protection authorities of the Member States, the European Data Protection Supervisor and a representative of the European Commission. As part of its advisory role, the WP29 will provide guidance on the implementation of the GDPR.
The guidance issued concerns three important topics that are relevant under the GDPR, namely: (i) the right to data portability; (ii) data protection officers ("DPOs"); and (iii) the determination and role of the Lead Supervisory Authority. The WP29 published guidance and FAQs on each of these topics. The documents provide useful guidance for companies to bring their processing activities in line with the GDPR by 25 May 2018, the date of its entry into force.
Right to Data Portability
The right to data portability is one of the main and controversial new rights granted by the GDPR to data subjects. The right is intended to give individuals more control over their personal data. Importantly, the right will also have implications for competition and innovation. The WP29 explains that the purpose of the right to data portability is consumer empowerment. At the same time, the WP29 notes that the right should foster opportunities for innovation and the sharing of personal data amongst controllers.
Article 20 of the GDPR, defines the right of data portability as follows:
"The data subject shall have the right to receive the personal data concerning him or her, which he or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller without hindrance from the controller to which the data have been provided."
The WP29 opinion offers guidance on the implementation and interpretation of this new right to data portability. It helpfully clarifies the conditions under which the right applies and provides concrete examples and criteria to illustrate the circumstances in which it will arise.
The WP29 distinguishes two elements of the right to data portability: (i) a right for data subjects to receive personal data processed by a data controller and to store it for their own personal use on a device; and (ii) a right to transmit personal data from one controller to another without hindrance. The WP29 cites the second element as being fundamental for consumer empowerment and encouraging innovation in data portable technologies. Controllers must implement tools to ensure compliance with both elements of the data portability right. The WP29 encourages controllers not only to offer direct download opportunities to the data subjects, but also to allow data subjects to transmit data directly to another data controller through an application programming interface (API).
If data are transferred from one service provider to another for use in another service, the WP29 indicates that both the transferring and the receiving service providers should ensure compliance with the GDPR. For instance, the transferring service provider will have to assess whether it can keep a copy of the data after the transfer. On the other hand, the recipient should determine whether the data provided are relevant and not excessive, with regard to that new data processing. The WP29 also points out that the receiving organisation may become a new data controller. It must therefore clearly and directly state the purpose of the new processing before any request for transmission of the portable data is made.
Conditions for Right to Data Portability
The guidance also clarifies the conditions under which the right to data portability applies:
- Consent or performance of a contract. The right to data portability only applies if the legal basis for the data processing is the data subject's consent or the necessity to perform a contract. Conversely, the data portability right does not apply to data that have been processed on another legal basis, such as processing that is required by law, or for the legitimate interest of the controller.
- Provided by the data subject. The data portability right is limited to personal data provided by the data subject. The WP29 adopts a broad interpretation of 'provided by the data subject' which suggests that the right does not only cover data actively and knowingly provided by the data subject (for example, by completing an online form) but also data provided by the data subject by virtue of the use of the controller's services or devices (such as search history, traffic data, or location data). By contrast, the WP29 excludes from the right to data portability 'inferred data' and 'derived data' created by the data controller on the basis of the data supplied by the data subject, such as a credit score or analysis of the user's health.
- Rights and freedoms of others. The right to data portability cannot adversely affect the rights and freedoms of others. Controllers must assess whether the data includes information about third parties, and whether the transfer of this information could affect the third parties' rights and freedoms. Controllers may need to exclude other data subjects' data or implement consent mechanisms for other data subjects involved. The guidance indicates that such issues are unlikely to arise on the occasion of the transfer of a bank account history, which will include data on other persons, provided that the transferred information is used for the same purpose (i.e., bank account history). However, if the information is to be used for a different purpose, such as a contact directory or for marketing purposes, the third party's rights and freedoms are likely to be affected.
Obligations for Data Controllers
The guidelines also clarify a number of obligations for data controllers:
- Data controllers must inform the data subjects regarding the availability of the right to portability. Controllers should also include information about the right to data portability before any account closure.
- Data controllers must adopt procedures to identify data subjects wishing to exercise their data portability right.
- The procedures adopted by the data controller must ensure that the right is complied with "without undue delay" and in any case within one month of receipt of the request (this term may be extended to three months for complex cases).
- Data controllers are encouraged to ensure the interoperability of the data format provided in the exercise of a data portability request, and to include as much metadata as possible.
- The data controller is responsible for taking all security measures necessary to ensure that personal data is securely transmitted (e.g., by use of encryption) to the right destination (e.g., by use of additional authentication information). Because of the risk that data subjects might request for their data but then fail to keep it secure, controllers responding to portability requests should recommend appropriate format(s) and encryption measures to help the data subject maintain security.
Data Protection Officers
Under the GDPR, many companies will have to appoint a Data Protection Officer ("DPO") and register the DPO with the supervisory data protection authority.
Article 37(1) of the GDPR requires the designation of a DPO :
- where the processing is carried out by a public authority or body;
- where the core activities of the controller or the processor consist of processing operations that require regular and systematic monitoring of data subjects on a large scale; or
- where the core activities of the controller or the processor consist of processing on a large scale of special categories of data (as defined in Article 9 of the GDPR).
The designation of a DPO imposes an important obligation on companies. However, the vague wording of the GDPR created uncertainty. Therefore, the WP29 guidance provides welcome clarifications on the criteria of 'core activities', 'regular and systematic monitoring' and 'large scale' as possible triggers for the mandatory DPO.
The WP29 defines 'core activities' as "key operations necessary to achieve the controller's or processor's goals". It specifies that 'core activities' include activities for which the processing of data "forms an inextricable part of the controller's or processor's activity". For example, a hospital's requirement to process patients' health records is part of its core activity of providing health care services. Conversely, processing personal data merely to pay employees or conduct standard IT support activities do not qualify as 'core activities'.
As to the 'large scale' criterion, the WP29 recommends considering the following factors:
- The number of data subjects concerned, either as a specific number or as a proportion of the relevant population;
- The volume of data and/or the range of different data items being processed;
- The duration, or permanence, of the data processing activity; and
- The geographical extent of the processing activity.
The WP29 cites as an example of 'large scale' processing a hospital's processing of patients' data or the processing of customer data in the regular course of business by an insurance company or a bank. By contrast, the processing of patient data by an individual physician or an individual lawyer's database of clients' convictions are not considered to be 'large scale'.
Based on this, the WP29 explains the notion of 'regular and systematic monitoring of data subjects'. According to the WP29, the notion of 'monitoring the behaviour of data subjects' includes all forms of tracking and profiling on the internet, but is not limited to the online environment and online tracking. The monitoring activity must be 'regular' (i.e., on-going; recurring; or constantly or periodically taking place) and 'systematic' (i.e., occurring according to a system; pre-arranged, organised or methodical; or taking place as part of a general plan; or carried out as part of a strategy).
The WP29 emphasises that Article 37 of the GDPR does not require that the DPO be someone working within the controller or processor's organisation. As a result, the DPO can also be a third party. However, the WP29 states that the personal availability of a DPO (whether physically on the same premises as an employee or via a hotline or other secure means of communication) is essential to ensure that data subjects will be able to contact the DPO.
In its guidelines, the WP29 further explains the independent position of the DPO in an organisation, as well as the required qualifications and tasks of the DPO. The WP29 recommends that DPOs should adopt a risk-based approach and focus on forms of processing that present the highest data protection risk.
The WP29 underlines that the data controller (i.e., the company and not the DPO) remains responsible for the processing activities and for compliance with the GDPR. For companies that do not fall within the categories whose designation of a DPO is mandatory, the company can still voluntarily appoint a DPO. In that case, it will have to comply with the provisions applicable to DPOs under the GDPR (including registration of the DPO with the supervisory data protection authority and protection against dismissal of the DPO). Lastly, companies that voluntarily appoint staff or outside consultants to oversee GDPR compliance but are not DPOs, should ensure that it is clear from the title, status, position and task of these persons that they are not DPOs within the meaning of Article 37 of the GDPR.
Lead Supervisory Data Protection Authority
The third guidance paper published by the WP29 on 13 December 2016 discusses the "Lead Authority", which under the GDPR must provide a one-stop-shop for cross-border processing.
First, the WP29 explains that the one-stop-shop principle only applies to situations of cross-border processing of personal data or processing which substantially affects data subjects in more than one Member State. By contrast, situations involving a mere local processing will be dealt with by the local supervisory authority. Moreover, the one-stop-shop principle does not apply to processing by companies that are not established within the EU (even if the company has a local representative in the EU).
For the processing activities to which the one-stop-shop principle applies, the WP29 offers guidance for identifying the 'lead supervisory authority' which will be the main point of contact for the controller and will coordinate the application of the data protection rules with other concerned supervisory authorities.
The WP29 states that identifying the lead supervisory authority depends on determining the location of the controller's 'main establishment' in the EU (or the location of the 'single establishment' if there is only one). In principle, for the controller, the main establishment will be the place of its central administration, i.e., the place where decisions regarding the purposes and means of the processing of personal data are taken.
However, in cases where decisions about different types of data processing are made in different Member States by distinct members of an organisation, more than one lead authority may be identified. The example given by WP29 is that of a bank whose banking processing activities take place in Germany where its headquarters are based, but whose insurance department is located in Austria. In such a case, the Austrian supervisory authority will be the lead authority for the cross border processing of personal data for insurance purposes, while the German supervisory authority will supervise the processing of personal data for banking purposes.
The WP29 makes it clear that the GDPR does not permit 'forum shopping'. This means that if a supervisory authority does not agree with the controller on the main establishment, the relevant supervisory authority will decide which supervisory authority will be considered as the 'lead', using objective criteria and looking at the facts at hand.
The WP29 announced that more opinions and guidance will follow, including guidelines on Data Protection Impact Assessments and Certification.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.