Category: Privacy, Data Protection & Information Management

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SURVEY ON THE ECONOMICS ON PERSONAL DATA ON MOBILE APPS LAUNCHED BY FRANCE’S PRIVACY WATCHDOG
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New Privacy Enforcement Act commences in Australia
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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
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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
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UK Government publishes new proposed data protection law
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New World tech fall victim to Old World tricks
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The Importance of Managing DSARs

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.

New Privacy Enforcement Act commences in Australia

By Cameron Abbott, Rob Pulham and Stephanie Mayhew

As of yesterday, the Privacy Legislation Amendment (Enforcement and Other Measures) Act 2022 (Privacy Enforcement Act) is now in effect after receiving Royal Assent on 12 December 2022.

As we have previously shared, the Privacy Enforcement Act increases the maximum penalties for serious or repeated privacy breaches. For body corporates/organisations this increases the penalty from the current $2.22 million to whichever is the greater of:

  • $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.

The Act also provides the Australian Information Commissioner with greater enforcement powers to enable privacy breaches to be resolved more quickly and efficiently through more effective information-sharing powers.

While the Privacy Act review has been ongoing since 2020 with an increase to the maximum penalties long-expected, the Privacy Enforcement Act was a quick response to recent major data breaches. Attorney-General, Mark Dreyfus stated that “significant privacy breaches in recent months have shown existing safeguards are outdated and inadequate. These reforms make clear to companies that the penalty for a major data breach can no longer be regarded as the cost of doing business”.

This is just the first step in what is likely to be significant amendments to the Privacy Act that will follow from the Attorney General’s Department’s ongoing review.

We expect that the regulator will start to take a far firmer approach to companies failing to secure their customer’s personal information and now carries a big stick to use in that process.

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!

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.

New World tech fall victim to Old World tricks

By Cameron Abbott, Rob Pulham and Dadar Ahmadi-Pirshahid

OpenSea have reported a breach whereby email addresses registered with the site have been shared with an unauthorised third party.

For landlubbers, OpenSea is the world’s largest marketplace for non-fungible tokens (NFTs).

The Head of Security at OpenSea identified an employee of OpenSea’s third party email delivery vendor as the source of the breach. The employee reportedly misused their access privileges to download and share the list of the site’s registered email addresses with an external party.

People who have shared an email address with OpenSea, such as subscribers to the site’s newsletter, are warned to remain vigilant about attempts by malicious parties to impersonate communications from OpenSea.

OpenSea has dealt with several security incidents this year. Only a month ago, a former OpenSea product manager was arrested and is reportedly the first person to have been charged in connection with a digital asset insider trading scheme. The product manager’s responsibilities included deciding which NFTs would be featured on the site’s homepage, which he allegedly used for his own financial gain. When OpenSea had discovered his conduct in September 2021, OpenSea requested and accepted the product manager’s resignation. Immediately afterwards, OpenSea commissioned a third party review of the incident and implemented the review’s recommendations to strengthen their existing policies.

In May this year, OpenSea’s Discord server was hacked. Just a few months earlier, 254 NFTs valued at around $1.7million USD were stolen through what appear to have been phishing attacks. OpenSea has reportedly reimbursed the victims.

These incidences highlight the status of NFT marketplaces as high value targets for malicious actors and reveals that many of the security vulnerabilities faced in the ‘old’ world of cyber technology remain a threat in the new world of blockchain and NFTs.

Once again, these incidents serve as a reminder for organisations to develop effective cyber security risk management, which requires an approach that encompasses all security vulnerabilities and that includes mechanisms governing employee access and use of sensitive information.

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.

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