Category: Government Regulation, Legislation & Enforcement

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SURVEY ON THE ECONOMICS ON PERSONAL DATA ON MOBILE APPS LAUNCHED BY FRANCE’S PRIVACY WATCHDOG
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Australia passes Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022
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Update from the Australia/New Zealand privacy conference and the changes to Australian privacy and cybersecurity laws
4
EU Digital Services Act: Fundamental Changes for Online Intermediaries?
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UK Data Protection: Beware of the consequences of unsolicited marketing emails!
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Privacy and cybersecurity laws expected to undergo a significant overhaul in the wake of Optus data breach
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Argentina announces upgrades to data protection obligations
8
UK Government publishes new proposed data protection law
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The Importance of Managing DSARs
10
An even ‘hacking’ field – Government Surveillance Bill passed by Parliament

SURVEY ON THE ECONOMICS ON PERSONAL DATA ON MOBILE APPS LAUNCHED BY FRANCE’S PRIVACY WATCHDOG

By Claude-Étienne Armingaud, Camille Scarparo and Alexandra Séguis

This survey follows the CNIL’s announcement on 24 November 2022 that it aims at “better understanding the economic challenges associated with the collection and processing of personal data in mobile applications” as part of its 2022-2024 strategic plan.

The CNIL considered data collection via mobile applications greatly lacks transparency as opposed to cookies collection on websites.

The expected inputs are to be used for the purpose of drafting recommendations to be submitted to public consultation during the second semester of this year.

Concurrently to its ever-active enforcement of website cookie framework, the CNIL also recently started going after mobile applications for their use of personal data, often leverage as a primary source of revenue for free-to-play mobile games. The most recent example being the French mobile game publisher Voodoo SAS, with a fine of EUR3 million for breach of user consent for targeted ads on 29 December 2022. Indeed, the CNIL considered that even when users did not consent to the tracking for advertising purposes, Voodoo still accessed the IDFV (Apple’s “IDentifier For Vendors” (“IDFV”) – an identifier assigned to app operators, which facilitates targeted advertising) and processed browsing information for advertising purposes, constituting a violation of French privacy law and the GDPR.

The CNIL now calls for economic contributions from experts, interest groups, regulatory entities and experienced private individuals in the field. The call for contributions closes on 10 February 2023. Contributions can be submitted by completing a questionnaire and/or a written statement at the following email address: ecodesapplis@cnil.fr.

All contributions will be covered by professional secrecy and will be published in the form of a synthetic and aggregated report.

Australia passes Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022

By Cameron Abbott, Rob Pulham and Stephanie Mayhew

Earlier this week (on 29 November), the Australian Parliament passed the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 (Bill) which was introduced to Parliament on 26 October 2022.

The Bill amends the following:

  • Privacy Act 1988 to expand the Australian Information Commissioner’s enforcement and information sharing powers and increase penalties for serious or repeated interferences with privacy;
  • Australian Communications and Media Authority Act 2005 to enable the Australian Communications and Media Authority to disclose information to a non-corporate Commonwealth entity that is responsible for enforcing one or more laws of the Commonwealth; and
  • Australian Information Commissioner Act 2010 to allow the Australian Information Commissioner to delegate certain functions or powers.

The biggest result is the increase to maximum penalties for serious or repeated privacy breaches from the current $2.22 million for organsiations to an amount not more than the greater of the following:

  • $50 million;
  • if the court can determine the value of the benefit that the body corporate, and any related body corporate, have obtained directly or indirectly and that is reasonably attributable to the conduct constituting the contravention—3 times the value of that benefit;
  • if the court cannot determine the value of that benefit—30% of the adjusted turnover of the body corporate during the breach turnover period for the contravention.

We will post some answers to key FAQs about these amendments shortly.  For example – what is qualified as a ‘serious and repeated’ interference of an individual’s privacy and how we consider the penalties may be applied – i.e. how a company’s adjusted turnover may be determined.

Australian Information Commissioner, Angelene Falk said the changes create “closer alignment with competition and consumer remedies” under the EU GDPR and “facilitate engagement with domestic regulators and our international counterparts to help us perform our regulatory role efficiently and effectively.” Notably, it also brings the penalties in line with recent changes to the penalties under the Australian Consumer Law regime.

The penalty increase is intended to act as a powerful deterrent, so organsiations no longer see privacy risk as a ‘risk of doing business’.

Update from the Australia/New Zealand privacy conference and the changes to Australian privacy and cybersecurity laws

By Cameron Abbott, Rob Pulham and Stephanie Mayhew

We’ve just returned from the annual iapp Australia/New Zealand privacy conference held in Sydney this week, and it was a whirlwind. Even if you’re not one of around half of Australians affected by two of the biggest data breaches in our recent history, you’ll be aware a lot is changing – and a lot more is poised to change – in this space.

We’ll be blogging over the coming weeks about some of the key themes and changes your organisation will need to prepare for, including:

– new regulatory enforcement tools

– higher expectations of the way personal information is collected and secured, and when it needs to be destroyed

– potential removal of key exemptions such as the employee records exemption that your business may currently rely on,

– and of course the major penalty increases that seek to deter privacy breaches being viewed as ‘the cost of doing business’,

as Australia tightens the protections around the collection and use of Australians’ personal information.

Stay tuned!

EU Digital Services Act: Fundamental Changes for Online Intermediaries?

By Claude-Étienne Armingaud, Dr. Ulrike Elteste and Dr. Thomas Nietsch

The European Union has taken another step to set out its new legal framework for online intermediaries. Following the publication of the Digital Markets Act (Regulation (EU) 2022/1925) in the EU Official Journal on 12 October 2022, the Digital Services Act has now also been published in the EU Official Journal as Regulation (EU) 2022/2065.

While the Digital Markets Act focuses on the behavior of large “gatekeepers” towards other businesses, the Digital Services Act aims to fully harmonize the rules on the safety of online services and the dissemination of illegal content online. In particular, its Articles 4 to 10 replace the current provisions on the liability privilege enjoyed by online intermediaries in the eCommerce Directive 2000/31/EC. The privilege as such broadly remains intact, but is punctured in a number of ways. For example, the Digital Services Act encourages preemptive screening and provides that “trusted flaggers” must receive priority in the future. Providers of online platforms that allow consumers to enter into distance contracts with traders must obtain certain minimum information from the traders they admit to their platform. They may have to notify consumers if they become aware that products sold on their platform do not comply with legal requirements.

Again, “very large” online platforms and search engines receive the legislator’s (and the EU Commission’s) special attention. They must comply with additional transparency requirements and analyze and mitigate systemic risks.

But other intermediaries must also timely amend their terms of service, improve their complaint handling, and increase their transparency to avoid fines that can reach 6% of their global turnover. Specifically, online platforms must in the future provide clear information on “each specific advertisement presented to each individual recipient”, including “meaningful information directly and easily accessible from the advertisement about the main parameters used to determine the recipient to whom the advertisement is presented and, where applicable, about how to change those parameters”.

Most obligations bearing on companies subject to the Digital Services Act will start to apply on 17 February 2024. However, all but small online platforms and search engines will be required to publish information on the usage of their services (Statement) on their website, with an initial Statement to be published by 17 February 2023 at the latest. Intermediaries designated as “very large online platforms” or “very large online search engines” by the EU Commission will need to comply with most of their new obligations from four months after being notified of their “very large” status.

UK Data Protection: Beware of the consequences of unsolicited marketing emails!

By Claude-Étienne Armingaud and Keisha Phippen

Sending unsolicited marketing emails could prove costly to UK organisations, as bike and car accessory retailer Halfords have recently discovered.

Last month, Halfords were handed a fine of £30,000 by the Information Commissioner’s Office (ICO) for sending around half a million unsolicited marketing email messages to customers who had not previously opted-in to marketing (see here).

The fine was issued under the Privacy and Electronic Communications Regulations (PECR), which gives people specific privacy rights in relation to electronic communications and restricts how unsolicited direct marketing is carried out.

An investigation carried out by the ICO found that the retailer broke the laws governing electronic communications by sending out emails relating to a government voucher scheme that gave people £50 off the cost of repairing a bike at any participating store or mechanic in England. The email not only pointed customers to the government website, it also invited them to book a bike assessment and to redeem their voucher at their chosen Halfords store. The ICO concluded that the insinuation of Halfords having a direct connection with the government scheme encouraged its customers to redeem the voucher in its stores and that Halfords was therefore advertising its own services.

PECR prevents organisations from sending emails or messages to people unless they have consented to it or they are an existing customer who has bought similar products or services in the past (known as the “soft opt-in” rule).

Halfords argued that the email constituted a service message and should not be categorised as direct marketing, but the ICO maintained that the email did constitute direct marketing because it satisfied the definition of such under Paragraph 35 of the ICO’s Direct Marketing Guidance (see here).  In addition, the ICO concluded that the soft opt-in rule could not apply because the targeted customers had already opted out. 

Andy Curry, Head of Investigations at the ICO said: “This [decision] sends a message to similar organisations to review their electronic marketing operations, and that we will take necessary action if they break the law.”

Privacy and cybersecurity laws expected to undergo a significant overhaul in the wake of Optus data breach

By Cameron Abbott, Rob Pulham and Stephanie Mayhew

Over the past two years, the Privacy Act has been the subject of long-awaited reform in Australia however, it seems the Optus data breach may have given it some much needed momentum.

The Optus attack is understood to have affected the details of 11.2m Optus customers, and of that 2.8m individuals have had their driver’s licence and/or passport numbers compromised. The hacker claims to have extracted the data from an API – software that allows two different systems to talk to each other. Therefore, if the claim is true the hacker didn’t need to provide authentication (e.g. a username and password) to retrieve the data.

In the wake of the attack, the Government has shared its plans to pursue substantial reforms that will include increased penalties under the Privacy Act (currently capped at $2.22m per offence) as well as changes to data breach notification laws to allow companies to rapidly inform financial institutions of affected individuals in an effort to minimise fraud.

The data breach also highlights the risks involved in collecting large amounts of personal information and storing this for excessive time periods. While the Privacy Act promotes the collection of a minimum amount of personal information, i.e. only that information that is necessary for a particular purpose and which the entity intends to use or disclose – individuals generally have limited control over how long their information is retained for.

During the initial stages of the Privacy Act review, the Attorney General’s Department sought submissions from entities on their views as to whether individuals should be given the right to have their personal information erased. Optus in submissions to the review argued against such a change stating that the right to erase personal data would involve significant technical hurdles and compliance costs that would outweigh the benefits. Of course this incident has happened just as stores are gearing up for Halloween – a fitting time for those public submissions to come back to haunt them.

Argentina announces upgrades to data protection obligations

By Cameron Abbott, Stephanie Mayhew and Dadar Ahmadi-Pirshahid

Argentina’s Data Protection Authority, the Agency for Access to Public Information (the Agency), has published a draft bill that proposes to bring Argentina’s 22 year old data protection law more in line with the European Union’s General Data Protection Regulation.

Amongst other things, the bill modernises Argentina’s data protection law to deal with more recent issues including cloud computing, biometric and genetic data. It provides greater scope for international transfers of information by allowing transfers under the sanction of adequate data protection guarantees in the absence of a decision by the Agency that the importing country has adequate data protection. It additionally requires Data Controllers to document and notify the Agency of data breaches within 48 hours of becoming aware of a breach.

The draft bill is open for public comment until 30 September 2022. Any entity wishing to submit commentary is encouraged to reach out to K&L Gates to help facilitate the submission process.

UK Government publishes new proposed data protection law

By Claude-Étienne Armingaud, Nóirín McFadden and Keisha Phippen

The UK Government has finally published its highly anticipated Data Protection and Digital Information Bill (the Bill), marking the first significant post-Brexit change to the UK’s data protection regime. Following Brexit, the UK continued following the EU General Data Protection Regulation, incorporated into UK law as the UK GDPR, and the UK implementation of the EU ePrivacy Directive, the Privacy and Electronic Communications Regulations 2003 (PECR), also remained in force.

The Bill is only at the start of the legislative process, and it remains to be seen how it will develop if it is amended during its passage through Parliament, but early indications are that it represents more of an evolution than a revolution in the UK regime. That will come as a relief to businesses that transfer personal data from the EU to the UK, because it reduces the risk that the EU might rescind the UK’s adequacy status.

For a start, the Bill actually preserves the UK GDPR, its enabling legislation the Data Protection Act 2018, and the PECR, because it is drafted as an amending act rather than a completely new legislative instrument. This does not contribute to user-friendliness, as interpreting UK data protection requirements will require a great deal of cross-referencing across texts.

The more eye-catching proposed changes in the Bill include:

  • The inclusion of a list of “legitimate interests” that will automatically qualify as being covered by the lawful basis in UK GDPR Article 6(e).
  • Some limitations on data subject access requests, such as the possibility of refusing “vexatious or excessive” requests.
  • More exemptions from the requirement to obtain consent to cookies.
  • Much higher fees for breach of PECR.

The Bill will now progress through various Parliamentary stages over the coming months in order to become law.

The Importance of Managing DSARs

By Claude-Étienne Armingaud and Inès Demmou

With its December 2021 fine imposed on French telephone operator Free Mobile, the French data protection authority (CNIL) reiterated the importance of responding to data subject access requests (DSARs) within the relevant timeline (usually 30 days), with all the relevant and required information (Article 13 and 14 GDPR) and ensuring the security of users’ personal data (Article 32 GDPR). 

Another sanction by the Dutch Supervisory Authority relating to the principle of data minimization confirmed that such DSARs could not be conditioned by overly complex mechanisms, such as a requirement to upload a full copy of an identity document.

These sanctions demonstrate that data subjects have acquired the awareness necessary to exercise their rights, and that data controllers must implement effective channels and internal processes to handle DSARs properly, effectively, in a timely manner, and in a way that would not, in turn, generate its own set of breaches of the GDPR. 

To find out more, see our full alert here.

An even ‘hacking’ field – Government Surveillance Bill passed by Parliament

By Cameron Abbott and Ella Richards

The Surveillance Legislation Amendment (Identify and Disrupt) Bill 2020 (Identify and Disrupt Bill) passed both houses of federal parliament on 25 August 2021. The new legislation extends the power of law enforcement agencies to identify and disrupt suspected online criminal activity through the provision of three new warrants.

The new warrants provide the Australian Federal Police and the Australian Criminal Intelligence Commission with the power to:

  1. Modify or delete the data of suspected offenders (data disruption warrants);
  2. Collect intelligence on criminal networks (network activity warrants), and
  3. Take control of a suspected offenders’ online account (account takeover warrants).

Anyone required to assist with government hacking is protected from civil liability. However, anyone who refuses to comply can face up to 10 years’ imprisonment.

Online criminal networks are evolving rapidly with the use of anonymising technology – making the detection of serious online crime near impossible. Encrypted applications such as Discord have stated that approximately 536 verified dealers sold $100,000+ of illegal substances/stolen goods in one week, despite Discord’s “zero-tolerance” approach to illegal activity.

On the other hand, the Office of the Australian Information Commissioner (OAIC) previously warned that the new warrant powers could adversely impact the privacy of a large number of individuals – including those with no suspected involvement in criminal activity.

The complexity of online crime makes it increasingly necessary for law enforcement agencies to level the playing field, identify suspected criminal activity and intercept that activity before it is actioned. However, proportionate consideration of individual privacy rights has created a lively debate in the passage of the legislation thus far.

The Surveillance Legislation Amendment (Identify and Disrupt) Bill 2021 is now awaiting Royal Assent. Keep an eye on our Cyber Law Watch blog further updates.

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