European Data Protection Digest

European Commission Sends Draft Regulation out for Review

December 8, 2011

 

The European Commission has released two documents that will serve as the basis of a new data protection framework in the European Union. The documents are under review by Directorates-General, whose comments will be considered before the final version of the new regulation is published in late January.

In a speech delivered on Tuesday in Brussels, European Commission Vice-President Viviane Reding said data protection rules “need to be adapted to new technological challenges.”

The draft regulation, which will repeal the existing Directive 95/46/EC, includes a right to be forgotten; a requirement to seek explicit consent when processing data for marketing and other purposes; a greater emphasis on the protection of children; a requirement for data protection officers, and a breach notification requirement, among other mandates.

The draft “is remarkable in a lot of respects,” notes Daniel Cooper of Covington & Burling LLP’s London office. “The commission is not nibbling at the edges. This really will be fairly seismic in terms of impact.”

Cooper notes that there are many changes. “Some you would expect, but the commission has added a lot that will be entirely new—processors will be directly regulated; there are new rights, such as the right to be forgotten and new data portability rights…it’s a candy shop of new and interesting provisions.”

This summary provides a snapshot of the changes, focusing on Articles 15, 18, 28, 29, 30, 32, 36, 63, 65 and 68 of the draft, which cover

  • the right to be forgotten;
  • data protection officers;
  • certification and seal programs;
  • breach notifications;
  • data protection impact assessments;
  • consent, and
  • the Article 29 Working Party (which will become the new European Data Protection Board).

The Right To Be Forgotten

Article 15 provides a right for individuals to bring about the erasure of data pertaining to them in certain circumstances—a so-called right to be forgotten.

The commission’s emphasis on the privacy rights of children shines through in this article, where it states that the right to be forgotten “shall apply especially in relation to personal data which are made available by the data subject while he or she was a child.”

The commission seems to be acknowledging that adults should not be made to live in perpetuity with data they posted during a less mature point in their lives, says Cooper. 

Data Protection Officers

Article 32 requires that data controllers and processors in private-sector enterprises with more than 250 employees--as well as all public authorities and those controllers and processors whose core activities “by virtue of their nature, scope and purposes require regular and systematic monitoring of data subjects-- appoint a data protection officer (DPO) to a two-year term that can be renewed.

This requirement will likely expand the number of DPOs in Europe. However, some member states may see a contraction in this area. States such as Germany, for example, which has lower ceilings for the DPO requirement, will have to transpose the new regulation’s 250-person requirement, a fact that Cooper feels is likely to be a source of debate.

Notwithstanding that potential debate, the “net result will be more DPOs across Europe,” Cooper says.

The draft regulation says that data protection officers should be appointed “on the basis of professional qualities and, in particular, expert knowledge of data protection law and practices.”

In addition, the DPO “shall directly report to the management of the controller or the processor,” and the controller/process must support the DPO by providing the resources “necessary to carry out the duties and tasks.”

Certification and Seal Programs

Article 36 says that member states and the European Commission “encourage the establishment of data protection certification mechanisms and of data protection seals and marks.”

The commission’s goal is to give data subjects an easy way to “assess the level of data protection provided by controllers and processors.”

The draft regulation states that the data protection certification mechanisms “shall contribute to the proper application of this regulation, taking account of the specific features of the various sectors and different processing operations.”

Breach Notification

Articles 28 and 29 lay out terms for notifying controllers, authorities and data subjects when a breach occurs.

Data controllers are required to notify their supervisory authority “without undue delay and, as a rule, not later than 24 hours after the personal data breach has been established.”

Data processors working on behalf of data controllers must notify the controller of a personal data breach within 24 hours.

In addition to notifying the authority, data controllers must also notify data subjects affected by the breach if the breach is deemed likely to “adversely affect the protection of the personal data or privacy of the data subject.”

Notification to data subjects is not required if “the controller has demonstrated to the satisfaction of the supervisory authority that it has implemented appropriate technological protection measure, and that those measures were applied to the data concerned by the personal data breach.”

Article 28 also outlines the elements that should be included in a breach notification.

Data Protection Impact Assessments

Under the new law, data controllers and processors would be required to carry out privacy impact assessments before embarking on the processing of certain personal data, specifically, when the processing is likely “to present specific risks to the rights and freedoms of data subjects by virtue of their nature, scope or purposes,” such as that associated with sensitive health information, sexual matters, ethnicity, finances or other sensitive areas.

The regulation requires that “Without prejudice to the protection of commercial or public interests or the security of the processing operation, the assessment shall be made easily accessible to the public.”

Consent

As Francoise Gilbert of IT Law Group notes in her analysis of the changes, the “rules for consent are strengthened” under the new law. “Consent must be ‘specific, informed and explicit.’ The controller bears the burden of proving that the data subjects have given their consent to the processing of their personal data for specified purposes.”

Covington & Burling’s Cooper feels this should come as no surprise. “Many companies have already moved in this direction,” he says, adding the commission’s intention is to avoid reliance on implied consent.

European Data Protection Board

The new law establishes the European Data Protection Board, which will replace the current Article 29 Working Party. Like the WP29, the new board will comprise a representative from each member state’s data protection authority and the European Data Protection Supervisor (EDPS).

The draft regulation proposes that the EDPS serve in the secretariat role for the new group. In an address to the Article 29 Working Party in Brussels on Wednesday, Vice-President Reding said the EDPS as secretariat “would be a cost-effective solution drawing upon the ready-made experience of that office.”

Sanctions

In her analysis, Bird & Bird Partner and IAPP Europe Advisory Board Member Ruth Boardman said the draft regulation “as it stands promises greater harmonization—but at the price of a significantly harsher regime, requiring more action by organizations and with tough penalties of up to five percent of worldwide turnover for the most serious data protection breaches.

Additional Analysis and Perspective on the Draft Regulation

European Commission Drafts to Reform the EU Data Protection Framework Enter Interservice Consultation (Hunton & Williams Privacy & Information Security Law Blog)
Draft EU Data Protection Rules Revealed
(Bird & Bird)
European Commission Unveils Draft of Proposed Regulation on Personal Data Protection
(IT Law Group)
Draft data protection regulation leaked; doubtful whether it will get enacted in this form
(Amberhawk’s Hawktalk blog)

—IAPP Staff