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Nigel Miller

Privacy Policies – Do’s and Don’ts following WhatsApp €225m fine

Nigel Miller (partner)
Ben Nolan
Ben Nolan (associate)

At the beginning of September, WhatsApp was fined €225 million by the Irish Data Protection Commissioner (“DPC”) for a number of failings related to its compliance with the GDPR’s transparency obligations (primarily set out in Art. 13 and 14 GDPR).  The fine is the second highest handed out under the GDPR to date and the decision sheds light on some of the key issues to be taken into account when drafting and updating privacy notices.

Many of the practices for which WhatsApp was fined are relatively standard. The decision should, therefore, come as a warning shot for organisations, especially those in the online consumer technology space, to make sure that they are providing individuals with all the required information.

The DPC’s decision is extremely long winded (266 pages), so we have summarised the key “do’s” and “don’ts” for privacy notices in light of the decision below.

DO’S AND DON’TS

When providing information on the purposes for which you process personal data and the lawful bases upon which such processing is based (as required by Art. 13(1)(c) GDPR):

DO

  • Provide information to individuals around how their personal data is actually used to achieve the relevant purpose. For example, if personal data are processed “to promote safety and security”, you should explain how the data are used to achieve those purposes, rather than simply stating the overall objective.
  • Provide information regarding the categories of personal data which are processed for each purpose. Up until now, it has been relatively common for controllers to simply set out the purposes for which they process personal data and the corresponding lawful basis, without clarifying which types of personal data are required for each purpose.
  • If more than one lawful basis applies in respect of a specific purpose for which you process personal data, clearly specify the circumstances when each basis will apply (for example, if you rely on both consent and also legitimate interests to send marketing communications, you should explain when each of these will apply).
  • Where processing is carried out on the basis of Art. 6(1)(c) GDPR (i.e. to comply with a legal obligation), you should provide information as to the types of law which require such processing to take place.

DON’T

  • Use vague wording to explain your purpose for processing the data (e.g. will readers know what you mean if you say that you use their data for the purpose of “improving their experience”?)

When providing information regarding your reliance on legitimate interests (as required by Art. 13(1)(d) GDPR):

DO

  • Be as specific as possible in setting out the relevant interest which applies which makes the processing necessary.
  • If the processing is being carried out based on the legitimate interests of a third party, you should specify the relevant third party who will benefit from the processing.

DON’T

  • Bundle together numerous interests to justify processing being carried out for one purpose.
  • Simply say you rely on legitimate interests to carry out a certain type of processing without mentioning what your interests are (this is more common than you think!).

When providing information on the third parties with which you share personal data (as required by Art. 13(1)(e) GDPR):

DO

  • If you identify the “categories of recipients” (rather than the specific third parties with whom personal information is shared), be as specific as possible when setting out such categories. For example, if your privacy policy says that you share customers’ personal information with service providers, you should provide information on the different types of service providers you share data with (e.g. IT service providers, data hosting service providers, marketing agencies etc.).
  • Identify the categories of data which are transferred to the specific third parties referred to the notice. (NB. To date, it is uncommon for controllers to provide this level of information in connection with data sharing.)
  • If you share personal data with other group members, clearly identify the specific entities with which the data is shared.

When providing information on international transfers (as required by Art. 13(1)(f) GDPR):

DO

  • If relying on an adequacy decision(s) to transfer personal data internationally, identify the specific adequacy decision(s) relied upon.
  • Identify the categories of data that are being transferred internationally. (NB. Again, providing this level of information has been uncommon in practice.)

DON’T

  • Use conditional language such as “may” when referring to reliance on a transfer mechanism (e.g. “we may transfer personal data internationally on the basis of an adequacy decision”).

When providing information on the right to withdraw consent (as required by Art. 13(2)(c) GDPR):

DO

  • Inform individuals that this does not affect the lawfulness of processing based on consent before its withdrawal (the DPC considers this necessary to “manage the data subject’s expectations” and ensure they are fully informed on the right).
  • Include the relevant information in the section of the privacy notice which discusses data subject rights, as this is the area individuals are most likely to consult for information around this.

If you have collected personal data indirectly but are exempt from providing relevant individuals with a privacy notice on the basis that this would involve “disproportionate effort”:

DO

  • Make sure that you still provide all the information required under Art. 14(1) and (2) in a privacy notice which you make publicly available – you can’t rely on this exemption if not!
  • Clearly identify in the privacy notice the parts of the document which are intended to apply in respect of individuals who have not been provided the privacy notice directly.

DON’T

  • Assume that posting your privacy notice on your website will be sufficient to satisfy the requirement that the privacy notice be made “publicly available”. In the WhatsApp decision, the DPC noted that:

“WhatsApp should give careful consideration to the location and placement of such a public notice so as to ensure that it is discovered and accessed by as wide an audience of non-users as possible. [A]…non-user is unlikely to have a reason to visit WhatsApp’s website of his/her own volition such that he/she might discover the information which he/she is entitled to receive”.

OTHER COMMENTS

Much of the DPC’s decision focused on the way in which WhatsApp presented information in its privacy notice, with WhatsApp being found to have violated Art. 12(1) GDPR (which requires controllers to provide information in a concise, transparent, intelligible and easily accessible form, using clear and plain language) in numerous instances. In this regard, the following practical tips can be drawn from the decision:

  • Avoid excessive linking to external documents in your privacy notice, particularly where these duplicate or (even worse) contradict information set out in your privacy notice or elsewhere. Readers should not have to “work hard” to get to grips with the notice.
  • Consider where in your privacy notice you are setting out information to ensure information is presented in a cohesive way and in the place that readers would expect. For example, the DPC considered that it would be logical to include information on the right to withdraw consent and the right to a complain to a data protection regulator in the “data subject rights” section of WhatsApp’s privacy notice as this is where most readers would come to find this information.
  • Avoid using vague and opaque language.

CONCLUSION

The DPC expects the information to be provided in privacy notices to be extremely granular, even more so than most organisations (and even data protection practitioners) would have expected to date, whilst still presenting the information in a concise and accessible manner. This will no doubt prove challenging for larger organisations carrying out complex processing operations, who will have to remain fully on top of their processing activities and data flows to stand a chance of providing the information expected by the DPC. The cost of compliance could be significant.

The decision is by an EU data protection regulator and relates to EU GDPR. It is not clear whether the UK ICO, which tends to be more pragmatic on data protection compliance, would take such a hard-line stance on the issues investigated by the DPC. However, it is clear that UK organisations that have a presence in the EU or are otherwise caught by the extra-territorial scope of the EU GDPR will need to update their privacy notices in line with the DPC’s decision.

 

If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak with your usual Fox Williams contact.

 

Nigel Miller

Do B2B companies not based in the EU need to comply with the GDPR?

Kolvin Stone
Kolvin Stone (partner)

I’ve long questioned the extraterritorial scope of the EU General Data Protection Regulation and if non-EU based organizations that engage solely in business-to-business activities fall under the GDPR.

The GDPR is at best ambiguous on this issue, and the guidance published to date from the regulators is unhelpful.

This issue has been brought into focus because of Brexit and the numerous inquiries I’ve received about whether U.K. B2B companies (with no physical presence in the EU) need to appoint an EU representative (and comply with the GDPR more generally in the EU).

The point has been raised by the privacy activist organization founded by Max Schrems (NOYB – European Center for Digital Rights), which stated in its submission in December 2020 on the European Commission’s proposed new standard contractual clauses that further guidance is needed to clarify the scope of the requirement to appoint an EU representative.

What is the issue in a nutshell?

Article 3(2)(a) of the GDPR states controllers and processors not based in the EU are subject to the GDPR where they process personal data of individuals in the EU in the course of offering goods or services to those individuals.

So, a U.K.-based clothing retailer selling items to an individual in France needs to comply with the GDPR. Makes sense as the retailer could be collecting a fair amount of information about the individual, including name, address, payment information and possibly some profile data.

But what happens if the U.K.-based retailer is selling to a company and only collecting business contact details in that context? It is not offering goods to an individual but a company. Does that mean the GDPR does not apply?

Interpretation of Article 3(2)(a)

On a literal reading of Article 3(2)(a), the answer must be yes. The B2B retailer is not offering goods to an individual.  The European Data Protection Board has published guidance to help clarify the scope of Article 3(2)(a) and all of the examples relate to business to consumer scenarios. Not helpful at all.

The EDPB could have taken the opportunity to make clear that Article 3(2)(a) also applies to B2B scenarios, and individuals should be read as individuals acting on behalf of companies. It did not do this, and I’m not sure why.

Is that an implicit recognition that Article 3(2)(a) may not apply to B2B scenarios? It would be somewhat of an anomaly that personal information collected in the context of B2B transaction is subject to the GDPR if you have an establishment in the EU but out of scope where you are not in the EU. And what about protecting the privacy rights of individuals at companies that are clearly entitled to protection?

Unfair advantage

It would create somewhat of an unfair advantage where you sell into the EU but are based outside of it. The GDPR and the extraterritoriality provisions were intended to level the playing field to ensure non-EU based technology businesses were also subject to the GDPR when active in the EU. Recognizing this, it is hard to justify an interpretation that excludes B2B transactions for non-EU based businesses.

There is no getting away from the fact that Article 3(2)(a) only refers to individuals and the EDPB guidance highlights B2C transactions.

While it seems odd to distinguish between B2B and B2C in this way, this distinction is well established (even if controversial) in the U.K. where B2B (e.g., corporate email accounts) communications are excluded from the scope of Privacy and Electronic Communications Act 2002. Only B2C (e.g., private email accounts) communications require opt-in consent. There are then forms for having different standards depending on whether the processing of personal data is in the context of B2B or B2C transactions.

Purposive and pragmatic interpretation

For my part, while Article 3(2)(a) is ambiguous, I’ve always worked on the basis that non-EU based organizations that engage solely in B2B activities are within the scope of the GDPR, although I have often had clients query this and highlight the fact that they are not selling to individuals.

With Brexit having occurred, clarity is important as U.K. businesses need to know as a matter of urgency the scope of their obligations as there is a real cost to having to appoint an EU representative.

The U.K. Information Commissioner’s Office has no clear official position on this issue and there are mixed messages on whether an EU representative is needed when the activities are pure B2B.

Scope for a UK approach

In September, the U.K. government published a consultation document on a new National Data Strategy with laudable goals to “build a world-leading data economy” with laws that are “not too burdensome” and “a data regime that is neither unnecessarily complex nor vague.”

In this context, is there scope for the U.K. to develop a different and more business-friendly interpretation of the GDPR? The U.K. courts and lawyers have historically taken a more literal approach to interpretation as compared to the EU courts and lawyers. Hence, my EU peers do not necessarily see the same issue with Article 3(2)(a). If the U.K. developed a more literal interpretation to Article 3(2)(a), that may reduce some regulatory friction to trade with the U.K. It would mean non-U.K.-based B2B businesses would not need to have a U.K. representative.

That, though, does not help the many U.K.-based businesses that are asking whether they now need to appoint an EU representative. Clarity from regulators would be extremely welcome.

 

If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak with your usual Fox Williams contact.

Nigel Miller

Post-Brexit – data transfers

Nigel Miller (partner)

As the UK and the EU have now reached a deal on Brexit, what’s the position on data transfers as from 1 January 2021?

Here’s a high-level summary:

Transfers from UK to EEA – these will be subject to UK GDPR. The UK government has confirmed that such transfers are not restricted and so can continue as before without the need for any transfer tool to be put in place.

Transfers from UK to third countries outside the EEA – the position remains similar to the current GDPR rules. Although the UK will in due course make its own adequacy decisions, for the time being existing EU adequacy decisions and the EU approved standard contractual clauses will continue to be recognised.

Transfers from EEA to UK – from 1 January 2021 the UK is a “third country” so far as EU GDPR is concerned; therefore, transfers from EEA to UK will be restricted transfers. The UK was seeking an “adequacy decision” from the European Commission as part of the Brexit deal to permit such transfers to continue without the need for a transfer tool to be put in place. A joint declaration published alongside the deal makes clear that the EU will undertake this adequacy assessment. However, an adequacy decision was not part of the deal. Pending this, a temporary arrangement has been agreed to allow data to continue to be transferred from the EEA to the UK for the next four months (extendable to six months).

Given this temporary arrangement, thankfully it is not necessary for organisations involved in such transfers to rush to put in place standard contractual clauses or another transfer tool as from 1 January. However, this will need to be kept under careful review in Q1 and Q2 2021.

Transfers to the US which relied on Privacy Shield – as a result of the Schrems II decision in July 2020, which invalidated the Privacy Shield arrangement, another transfer tool needs to be put in place, such as standard contractual clauses. But see next point.

Using standard contractual clauses – as well as transfers which have become restricted transfers as a result of Brexit, all restricted transfers will need to be reviewed in 2021 with the implementation of the proposed new standard contractual clauses issued by the European Commission in November 2020 – see https://idatalaw.com/2020/11/20/new-standard-contractual-clauses/

In addition to the above, following Schrems II, in order to rely on standard contractual clauses organisations must carry out a “transfer impact assessment” to determine whether the clauses guarantee an equivalent level of protection for the transferred data as applies under GDPR; if implementation of SCCs alone would not guarantee an equivalent level of protection, then “supplementary measures” need to be put in place to ensure such a level of protection – see further https://idatalaw.com/2020/11/20/new-guidance-for-international-transfers-post-schrems-ii/

Putting aside international transfers for a moment, we wish you all the best for a healthy and successful 2021!

Nigel Miller

Six data protection steps for return to the workplace

As lock-down restrictions start to ease and businesses begin to reopen, the ICO has set out the key steps organisations need to consider around the use of personal information.

Six key steps:

The six key data protection steps are:

Only collect and use what’s necessary

This reflects the data protection principle of “purpose limitation”.

To help you decide if collecting and using people’s health data is necessary to keep your staff safe, you should ask yourself a few questions:

  • How will collecting extra personal information help keep your workplace safe?
  • Do you really need the information?
  • Will the test you’re considering actually help you provide a safe environment?
  • Could you achieve the same result without collecting personal information?

If you can show that your approach is reasonable, fair and proportionate to the circumstances, then it is unlikely to raise data protection concerns.

Keep it to a minimum

This reflects the data protection principle of “data minimisation”.

When collecting personal information, including people’s Covid-19 symptoms or any related test results, organisations should collect only the information needed to implement their measures appropriately and effectively.

Don’t collect personal data that you don’t need. In some case, some information only needs to be held for a short period, and there is no need to create a permanent record.

Be clear, open and honest with staff about their data

This reflects the data protection principle of “transparency”; people have a right to know their information will be handled.

Some people may be affected by some of the measures you intend to implement. For example, staff may not be able to work. You must be mindful of this, and make sure you tell people how and why you wish to use their personal information, including what the implications for them will be. You should also let employees know who you will share their information with and for how long you intend to keep it. You can do this through a clear, accessible privacy notice.

Treat people fairly

This reflects the data protection principle of “fairness”.

If you’re making decisions about your staff based on the health information you collect, you must make sure your approach is fair. Think carefully about any detriment they might suffer as a result of your policy, and make sure your approach doesn’t cause any kind of discrimination.

Keep people’s information secure

This reflects the data protection principles of “integrity and confidentiality” and “storage limitation”.

Any personal data you hold must be kept securely and only held for as long as is necessary.

Staff must be able to exercise their information rights

As with any data collection, organisations must inform individuals about their rights in relation to their personal data, such as the right of access or rectification. Staff must have the option to exercise those rights if they wish to do so, and to discuss any concerns they may have with organisations.

Legal basis for processing:

As well as following these principles, if you decide to implement symptom checking or testing, you must identify a lawful basis for using the information you collect.

We would suggest that employers avoid reliance on “consent” as the legal basis, as employee consent is unlikely to be valid for data protection purposes as employees do not have a free and genuine choice. The most appropriate legal basis, therefore, will be that the collection of health data is in the “legitimate interests” of the employer, such interests not being overridden by the interests of the employees.

In addition, as health data is one of the “special categories” of personal data, an additional lawful basis is required.  Again, we would suggest that employers avoid reliance on “explicit consent”, and instead rely on the necessity to process the information to comply with the employer’s health and safety at work obligations.

Finally, if you are processing health data on a “large-scale”, you will also need to conduct a “data protection impact assessment” (DPIA). The GDPR does not define what constitutes large-scale. In essence, this will be determined mainly by the number of employees involved. While a small business is unlikely to be processing employee data on a large-scale, even if you are not strictly required to carry out a DPIA, it is good practice to do so.

Our recommendations:

  • Provide a Covid-19 specific privacy notice to your employees, as a supplement to your general staff privacy notice.
  • Supplement your data retention policy to set out when personal information collected must be reviewed, deleted or anonymised.
  • If you are collecting employee health data, or checking and testing, document your legitimate interests assessment (LIA). This does not have to be in any particular form but should address the three tests: the purpose test (identify the legitimate interest); the necessity test (consider if the processing is necessary); and the balancing test (consider the individual’s interests).
  • Consider how the information will be stored to ensure it is kept secure, and who will have access to the information.
  • Do you have an internal data subject access request policy? If not, it’s a good time to introduce one to ensure DSARs are handled effectively.
  • If you are processing health data on a large scale, or just to comply with good practice, prepare a data protection impact assessment. This can be done as part of your wider return to work risk assessment.

 

Contact us

If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak with your usual Fox Williams contact.