Since the Schrems II decision of the Court of Justice of the European Union (CJEU) last year (see our alert here), companies in the European Union found themselves between a rock and a hard place, as many still rely on U.S.-based online service providers in one capacity or another, and the CJEU, in addition to totally invalidating the Privacy Shield framework, mandated additional requirements over the Standard Contractual Clauses (SCCs), the most widely used lawful transfer mechanisms.

Following this CJEU decision, the Bavarian Data Protection Authority (Bayerisches Landesamt für Datenschutzaufsicht) has now effectively barred a European online magazine from using the popular U.S.-based newsletter delivery service, Mailchimp.

Companies using Mailchimp to route their newsletters must generally transfer personal data (e.g., the recipients’ email addresses) to Mailchimp’s servers in the United States. Previously certified under the late EU-U.S. Privacy Shield framework, Mailchimp had to pivot to offer its European customers an alternative transfer mechanism, i.e. the SCCs. While their general validity was left untouched by the Schrems II decision, the CJEU argued that it may be required for companies relying on the SCCs to assess whether additional safeguards should be implemented on top of the SCCs in order to effectively protect personal data.

As expressly mentioned in the Schrems II decision, transfers to cloud service providers in the United States would require such additional safeguards, due to the broad investigative powers of U.S. authorities, e.g., under Section 702 (50 U.S.C. § 1881a) of the Foreign Intelligence Surveillance Act (Cloud Services Act).

Until now, it had seemed that the EU supervisory authorities had granted companies an unofficial grace period to adjust to the amended legal situation, especially as new templates for SCCs taking into consideration the Schrems II decision are expected to be finalized in the coming weeks.

The action of the Bavarian Data Protection Authority shows that this restraint might have come to an end. In a recent press release concerning this investigation, the authority commented that the case was exemplary for their enforcement of the requirements of the Schrems II decision, which had already been taken up with a high degree of intensity even without publicly perceived investigations or sanctions. 

The Bavarian Data Protection Authority based its action expressly on the fact that the European company has not assessed whether additional safeguards for transferring personal data to Mailchimp were required, in particular as Mailchimp may be subject to the Cloud Services Act. While no fine was imposed in this case and the Bavarian Data Protection Authority did not issue a formal decision, the authority still informed the company that their use of Mailchimp was (in their view) not in line with General Data Protection Regulation (GDPR) requirements. The company also promised to cease using Mailchimp in the future.

However, it should be noted that the official reason for not imposing a fine was on the one hand, the low sensitivity of the data transferred (email addresses only) and, on the other hand, the limited scope of the transmission (only two newsletters were sent). The details of the case being leaked and officially commented on by the supervisory authority could be considered as a warning to other EU companies transferring data to U.S. cloud service providers, which should probably expect less leniency from the supervisory authorities from now on. 

The current case was rather clear, as the European company in question has apparently taken no steps at all to establish and document whether additional safeguards were required and were already (because of this omission) in breach of their statutory obligations under GDPR. Future cases will probably not be as easy to decide, in particular when an EU company has documented a respective assessment or even implemented additional safeguards, and supervisory authorities and ultimately courts will have to assess what is really required to ensure adequate security of personal data in countries outside the European Union. 

Following the decision of the Bavarian Data Protection Authority, EU companies using U.S. online service providers, especially cloud services, are therefore encouraged to check the basis of their data transfers to the United States and, if necessary, adapt them to the new legal situation in order to avoid facing potentially high fines. 

K&L Gates’ global data protection team (including in each of our European offices) remains available to assist you in achieving the compliance of your data transfers at global levels.

First Publication: K&L Gates with Thomas Nietsch & Martin Fokken

When the General Data Protection Regulation1)Regulation (EU) 2016/679 on the Protection of Natural Persons with Regard to the Processing of Personal Data and on the Free Movement of Such Data, … Continue reading came into force throughout the European Union nearly three years ago, one of its most eye-catching features was its extraterritorial jurisdiction provisions. These extend the reach of the GDPR to businesses located outside the European Union who offer goods or services to EU residents or who monitor the behavior of EU residents2)Art. 3(2)(a) and (b) GDPR..

Under the threat of becoming liable for a breach of the GDPR and potential fines of up to €20m or four percent of global turnover (whichever the higher), many businesses based in the United States and other locations outside the European Union have simply taken a stance of refusing to deal with EU residents, including taking measures such as geo-blocking websites to EU-based visitors. Other businesses, in the United States and elsewhere, have found themselves contemplating whether they might be subject to the GDPR and how to react merely because they have made a new EU-based business connection, acquired the contact details of a potential customer in the European Union, or even become aware that an employee at a customer organization had moved to the European Union.

A court in the United Kingdom has now considered the limits of extraterritorial jurisdiction of the GDPR, which may provide some reassurance to overseas businesses that limited contact with EU residents via a website may not necessarily lead to them being subject to the GDPR.

(more…)

As of 1 January 2021, the Brexit transition period (Transition Period) ended, and the United Kingdom (UK) officially finalized its exit from the European Union (EU) and the 11th-hour commercial agreement (Agreement) should allow for a smoother transition on the data protection front as the General Data Protection Regulation (GDPR) stops being directly applicable to the UK. It also provided the UK with a six-month grace period to hope for an adequacy decision that would allow for the free transfer of personal data from the EU to the UK.

As the European Data Protection Board (EDPB) amended on 13 January 2021 its Brexit communications² further to the Agreement (Communications), it only addresses:

  • The issue of data transfers from the EU to the UK;
  • The end of the One-Stop-Shop (OSS) mechanism for the UK; and
  • The need for UK entities that would be subject to GDPR to appoint a representative further to Art. 27 GDPR.

However, aside from enacting the end of the OSS and commenting that “the EDPB has been liaising with the ICO [Information Commissioner’s Office, the UK’s Supervisory Authority] over the past months in order to enable a smooth shift to this new situation by ensuring that the EEA authorities follow a shared and efficient approach in handling the existing complaints and cross-border cases involving the ICO, whilst minimizing delays and possible inconveniences to affected complainants[,]” the EDPB did not comment on how such collaboration will effectively play out for companies whose lead Supervisory Authority was the ICO.

Read the full article on Radar First blog.

43rd EDPB Meeting

December 17th, 2020 | Posted by Claude-Etienne Armingaud in Europe | Privacy - (0 Comments)
  1. Adoption of the minutes and of the agenda, Information given by the Chair
    1. Minutes of the 42nd EDPB meeting
    2. Draft agenda of the 43rd EDPB meeting
  2. Consistency mechanism, Guidelines and EDPB
    1. Key Provision ESG
      1. Guidelines on restrictions under Article 23 GDPR
    2. Financial Matters ESG
      1. Guidelines 06/2020 on the interplay of the Second Payment Services Directive and the GDPR (after public consultation)
    3. International Transfer ESG
      1. Guidelines 2/2020 on articles 46 (2) (a) and 46 (3) (b) of Regulation 2016/679 for transfers of personal data between EEA and non-EEA public authorities and bodies (after public consultation)
  3. Current Focus of the EDPB Members
    1. Data Governance Act COM (2020) 767 proposal – presentation by European Commission
    2. Information about the European Commission request for a joint EDPS-EDPB opinion regarding the Data Governance Act
    3. EDPB Strategy
    4. Support Pool of Experts
    5. Request for information from the European Commission regarding Brexit state of play (end of transitional period as well as the impact on EU-UK data flows and further information on possible adequacy decisions)
    6. Information note on data transfers under the GDPR to the United Kingdom after the Brexit transition period
  4. FOR DISCUSSION AND/OR ADOPTION – Expert Subgroups and Secretariat
    1. Cooperation ESG
      1. [BREXIT] Involvement of the UK SA in cooperation and consistency mechanisms
      2. Review of the internal documents on local cases
      3. Handling cross border complaints against public bodies or authorities – request for mandate
      4. Guidelines on handling complaints: revision of the mandate – request for mandate
    2. Compliance, e-Government and Health ESG
      1. Guidelines on certification criteria assessment – request for mandate
    3. Financial Matters ESG
      1. Statement on the protection of personal data processed in relation with the prevention of money laundering and terrorist financing
    4. International Transfers ESG
      1. Art. 64 GDPR Opinion on the draft decision of the Dutch Supervisory Authority regarding the Controller Binding Corporate Rules of Equinix
    5. Compliance, e-Government and Health ESG
      1. Stakeholder event on processing of data for medical and scientific research purposes – request for mandate
    6. Technology ESG
      1. Guidelines on anonymisation / pseudonymisation – request for mandate
    7. EDPB Secretariat
      1. 2021 February plenary
      2. Survey future meetings post COVID
  5. Any other business

42nd EDPB Meeting

November 19th, 2020 | Posted by Claude-Etienne Armingaud in Europe | Privacy - (0 Comments)
  1. Adoption of the minutes and of the agenda, Information given by the Chair
    1. Minutes of the 41st EDPB meeting
    2. Draft agenda of the 42nd EDPB meeting
    3. Publication of minutes of 40th Plenary meeting
    4. Request to extend the deadline for public consultation re recommendation 01/2020 on sup. measures
  2. Current Focus of the EDPB Members
    1. Presentation by the European Commission of the new (updated) two sets of SCCs
  3. FOR DISCUSSION AND/OR ADOPTION – Expert Subgroups and Secretariat
    1. Technology ESG
      1. Statement on eprivacy regulation
      2. Letter to News Media Europe and others regarding cookie walls
    2. International Transfer ESG
      1. Template for BCR approval decision by a supervisory authority
  4. Any other business
  1. Adoption of the minutes and of the agenda, Information given by the Chair
    1. Minutes of the 40th EDPB meeting
    2. Draft agenda of the 41st EDPB meeting
  2. Current Focus of the EDPB Members
    1. Art. 65 ongoing procedure
    2. Draft Art. 65 Decision
  3. FOR DISCUSSION AND/OR ADOPTION – Expert Subgroups and Secretariat
    1. Recommendation on measures that supplement transfer instruments to ensure compliance with the EU level of protection of personal data
    2. Update of the European Essential Guarantees recommendations

With the Brexit transition period ending on 31 December 2020, and no deal in sight, the future of cross-border data transfers between the European Economic Area (the EEA) and the United Kingdom remains unclear. On 1 January 2021, the United Kingdom will be considered as a “third country” and, unless a Brexit deal is proposed dealing with data protection and how data transfers between the EEA and the United Kingdom are to be treated, it could be significantly more difficult for European Union (EU)-based entities to transfer personal data to the United Kingdom.

(more…)

The European Data Protection Board (EDPB) published two sets of new guidelines on 2 September 2020, on the concepts of controller and processor (Guidelines 07/2020, the Guidelines) and on the targeting of social media users (Guidelines 08/2020 – see our Alert here). The earlier aims to replace the previous opinion by EDPB’s predecessor, the WP29, on these concepts by clarifying the main concepts of “controller”, “joint-controllers” and “processor” and by specifying the consequences attached to these notions.

(more…)

With close to one billion active users on social media, platforms and businesses are constantly rolling out new features, upgrading their ad tools and creating new ways to engage with users, moving away from traditional marketing strategies. Those emerging practices are also extensively relying on data analyses to gain insights and enhance more targeted opportunities, therefore shifting platforms and businesses’ focus on revenue.

The evolution towards increasingly personalized marketing practices occurs in parallel with end-users’ awareness of data protection frameworks, which may lead to a rift between transparency expectations towards complex advertising solutions based not only on personal data provided by the users themselves, but also in conjunction with other data collected by social media providers or third parties. Recent headlines about the roles played by social media targeting on democratic decision-making and electoral processes reinforce such perceptions.

(more…)

Link to official PDF version.

The European Data Protection Board

Having regard to Article 70(1)(e) of Regulation 2016/679/EU of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC.

HAS ADOPTED THE FOLLOWING GUIDELINES

(more…)