Technology has transformed and disrupted long standing industries as well as created new industries along the way. The digital revolution in the healthcare industry appears to have been long promised but much delayed. There may be a number of understandable reasons why the wheels have not turned so quickly. For instance, unlike say the financial services industry which is private sector led, the healthcare industry has obvious public sector touch points which can make any sort of change slower. But just as information about an individual’s bank balance or salary is considered confidential, so a person’s health information is particularly sensitive, both in a legal sense (because health information is categorised as sensitive under EU data protection law) but also in an obviously everyday sense – people feel that their health information (in most but not all circumstances) is private.
All eyes are currently on the Council of the EU to figure out when and in what form we are likely to see a new EU data protection law emerging. The adoption of this law, which has been in the making since the European Commission presented its vision for a modern privacy regime in 2010, will have vital and global implications for the future of our data-driven existence. This explains the cautious progress so far, but the need for a modernised regime is pressing. Six presidencies have so far managed the adoption process within the Council—which together with the European Parliament has legislative responsibility for passing EU laws—and each has made its own contribution to the process. But the Council has been the key focus of attention of the ongoing legislative process since the European Parliament approved its own draft of the EU Data Protection Regulation in early 2014.
The chairwoman of the French data protection authority (the CNIL), Isabelle Falque-Pierrotin, has long been an outspoken proponent that companies should have internal accountability mechanisms for data protection compliance. On January 13, 2015 the CNIL published a standard defining what accountability means in practice. Companies that demonstrate that they comply with the new standard will be able to obtain an “accountability seal” from the CNIL.
On 7 November 2014 the Polish Parliament passed the Act on the Facilitation of Business Activity which substantially amends the existing Act on Personal Data Protection. As we previously reported, this new Act requires an administrator for information security to be given an independent position within the data controller’s organization. Additionally, the new Act introduces provisions facilitating the transfer of personal data to countries outside the European Economic Area (further implementing provisions from Directive 95/46/EC and the proposed draft General Data Protection Regulation). The new law will come into force on 1 January 2015.
At the heart of EU data protection law is the passionate belief in the right to privacy. Indeed, the Treaty of Lisbon has now recognised both privacy and data protection as fundamental rights under EU law. As fundamental rights, there is a sense in which the scope of privacy and data protection must be expanded to the furthest extent possible. Yet, like any other law, it must be clear when and where EU data protection rules apply and the applicable law provision in the current Data Protection Directive has caused some headaches along the way. Whether the proposed new EU regime will prove to be a calming tonic remains to be seen. Today’s technology pays no attention to geographic borders. What do Cloud Computing networks care about the Atlantic Ocean so long as the network is resilient and customers can access their data? Businesses typically structure their systems in order to provide the best commercial proposition which often (but not always) involves cross-border data transfers. Therefore, cross-border data transfers are a part of everyday business. But businesses need to understand which laws apply to their operations to ensure compliance and avoid being chased by regulators or disgruntled customers. Unfortunately, the Directive’s provision concerning when it applies has not always provided much clarity.
Assuming a fair amount of hard work and that the EU institutions are able to put their political skills to good use, 2015 may be the year that sees the culmination of a legal modernisation process that has been running for the best part of four years. It was in 2010 when the European Commission formally acknowledged that the 1995 Data Protection Directive was ready for a makeover to address the privacy and data protection needs of the 21 century. Since then, stakeholders covering a whole spectrum of views have participated in a process that is approaching a decisive stage. In early 2014, the European Parliament came forward with a bold proposal to amend the Commission’s original draft and put the ball firmly in the Council of the EU’s court. As the Council finalises its own proposal, a picture of what the new framework will look like is starting to emerge.
On 12 March 2014, the European Parliament voted overwhelmingly in favour of the European Commission’s data protection reform with 621 votes for, 10 against, and 22 abstentions for the proposed General Data Protection Regulation. The vote is significant because it confirms the approval of the European Parliament, one of the required participants in the s0-calle “trilogue” process along with the Commission and the Council, which will not change even if the composition of the Parliament changes following the European elections in May.
Data Protection Day in Europe, 28 January 2014, saw the announcement by EU Justice Commissioner Viviane Reding of a more precise timetable for the adoption of the EU’s data protection reform package, comprising a Regulation governing general data protection and a Directive governing the use of personal data in the area of law enforcement and crime. The Council of the EU will agree upon a formal negotiating mandate by the end of June 2014, with a view to inter-institutional negotiations concluding by the end of 2014.
The Council of the EU failed to make any progress towards the adoption of an agreed negotiating position on the Data Protection Regulation at its meeting on Friday, 6 December 2013. While momentum had begun to build following the vote by the EU Parliament’s LIBE Committee in October, expectations of progress within the Council were dampened by the formal agenda circulated before the Justice and Home Affairs (JHA) Committee met, which tabled a review of the current state of play and detailed discussion of the one-stop-shop issue.
The continued uncertainty around the draft EU Data Protection Regulation presents something of a challenge for data controllers. It’s clear that it could require them to make significant changes to how they handle individuals’ data, but the ongoing fundamental political disagreements make it difficult to predict which changes will make it into the final form of the legislation. So it is interesting to see the recommendations on the UK ICO’s blog on where to start in preparing for reforms, highlighting three areas: consent, breach notification, and privacy by design.
On November 27, the European Commission released a strategy memo on rebuilding trust in the mechanisms allowing data to flow from the European Union (“EU”) to the United States. The Commission recognizes that EU-U.S. data flows are essential to the strategic and economic partnerships between the two markets. However, revelations about U.S. surveillance programs have, according to the Commission, caused EU Member States and citizens to believe that the current data transfer mechanisms do not provide adequate protections for personal data. To address those concerns and rebuild trust in transatlantic data flows, the Commission recommends six initiatives, including specific recommendations for reforming the U.S. privacy framework. Of particular note, the Commission identified several shortcomings with the EU-U.S. Safe Harbor framework and offered 13 recommendations for reform. And the Commission once again calls on the United States to adopt comprehensive privacy legislation.
On 20 November 2013, Hogan Lovells hosted a cybersecurity seminar at its London offices, gathering a panel of experts in the field to discuss a subject that has become a growing concern for businesses worldwide. The seminar sought to address the cyber risks currently facing businesses, what businesses should do if a cyber attack occurs, the legal issues a business should consider when responding to a cyber attack, and the options for protecting your business with cyber risk and data protection insurance.
The EU Parliament’s Committee on Civil Liberties, Justice and Home Affairs (“LIBE”) voted on Monday to adopt its report on the draft General Data Protection Regulation and the separate Directive for the law enforcement sector. This vote sets out the Parliament’s position for its negotiations with the Council and Commission (known as the “trialogue” stage). The Committee aims to have a plenary Parliamentary vote in March before the Parliamentary elections.
On October 17, Jan Albrecht, rapporteur to the EU Parliament’s Committee on Civil Liberties, Justice and Home Affairs (“LIBE”), issued a release in which he claims that “Edward Snowden and the PRISM scandal laid the ground” for including a prohibition against telecommunications and Internet companies transferring data to other countries’ governmental authorities unless otherwise permitted by EU law. Albrecht’s release offers 10 points to describe the draft Regulation that LIBE is scheduled to vote upon on October 21. If LIBE adopts the draft, the Parliament, Council, and Commission will begin work on negotiating the final legislation, which parliamentarians hope will be adopted before elections in May 2014.
Earlier this week, The New York Times published “Europe Aims to Regulate the Cloud,” an article considering the impact on cloud computing of the proposed European Data Protection Regulation which quoted Hogan Lovells Partner Mark Taylor. Taylor commented that over-regulation in this area could impact the adoption and use of cloud services in the EU, and this in turn could have a broader economic impact given the level of penetration which cloud-related services are now achieving. This blog post contains a link to the article.
On Monday, a European Parliament Inquiry established to investigate the recent U.S. National Security Agency surveillance revelations indicated that its final report would recommend suspension of the popular EU-U.S. Safe Harbor Framework.
On 7 October 2013, the Ministries for Justice and Home Affairs of the 28 Member States of the European Union met in Luxembourg to further discuss the draft General Data Protection Regulation that is intended to replace the current European data protection framework, particularly debating the controversial “one-stop-shop” principle that would provide organization’s one lead regulator in Europe.
Earlier today, in a brisk memo (reproduced in its entirety below), EU Vice President Viviane Reding called EU data protection reform “the answer to PRISM” and called PRISM a “wake-up call.” She itemized the need for broad jurisdiction and enforcement, and stated that governments collecting data on EU citizens outside their territory never should obtain it directly from [...]
The European Court of Justice (ECJ) is considering a critical case regarding the “right to be forgotten” and the application of EU data protection law to Internet intermediaries. The case involves a Spanish individual who is seeking to require Google to delete references to newspaper articles mentioning his prior involvement in debt collection proceedings from its search results. The ECJ’s adviser, Advocate General Niilo Jääskinen, recently issued a non-binding opinion stating that although EU law should apply to Google, the company should not be deemed a “data controller” for its search engine activities. The opinion also warned that the “right to be forgotten” can adversely affect freedom of expression.
On June 11, the French Minister for Digital Economy indicated during questioning by a French Member of Parliament about the status of the draft data protection regulation that the Minister of Justice had rejected, during the meeting of the European Council held last week, the latest version of the draft regulation.
Concerned that the prescriptive nature of the proposed EU Data Protection Regulation will impose a significant additional administrative burden on regulators, the UK Information Commissioner’s Office as published on its website a letter to the Secretary of State for Justice which re-states the Information Commissioner’s concerns about the proposed Regulation.
The New York Times reported on May 13 that U.S. companies showed up in force at the International Data Protection Day conference that day in Berlin. The Times article also mentioned the presence of Hogan Lovells at the conference. In addition to the heightened interest in data protection evidenced by U.S. business that is described in the NY Times, the Berlin conference showcased the continued sparring between the EU and the U.S. on the adequacy of U.S. privacy laws and also provided a comprehensive update on data protection developments worldwide. The topics for the day began with the proposed EU data protection regulation and ended with U.S. privacy and security enforcement, with numerous developments in other countries sandwiched in between.
On April 19, the European Union’s Article 29 Working Party adopted Explanatory Document WP204 on processor Binding Corporate Rules (BCRs). Processor BCRs provide a new avenue for data controllers to transfer EU personal data to processors (such as cloud service providers) located in third countries not considered to ensure an adequate level of protection under the 1995 EU Data Protection Directive. The Article 29 Working Party, noting the success of controller BCRs and citing the “growing interest of industry in such a tool,” provided initial guidance on processor BCRs in June 2012 through Working Document WP195 (which we previously covered here). WP195 presented a “toolbox” that laid out the criteria for approval of processor BCRs, as well as explanatory notes on the content expected in the processor BCRs. As of January 1, 2013, the EU began accepting applications for approval of processor BCRs.
On April 23, the French data protection authority, the CNIL (Commission Nationale de l’Informatique et des Libertés), published its annual report for 2012, emphasizing a significant increase in complaints, audits, and sanctions. In this blog post, we review each of these topics addressed by the CNIL’s report.