30 Nov 2017

Data Protection update - November 2017

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Welcome to the November 2017 edition of our Data Protection update, our monthly bulletin on key developments in data protection law. As always, please do let us know if you have any feedback or suggestions for future editions.

Data protection

Cybersecurity

ICO enforcement

Data protection

Less than six months to go…. the GDPR clock is ticking…..

According to a recent survey, 92% of European businesses (not to mention 75% of UK law firms!) are unprepared for the entry into force of the General Data Protection Regulation (GDPR).

Statistics aside, the clock is ticking for all business to finalise their plans for the implementation of the GDPR in May 2018. If you are still wondering where to start our GDPR Countdown (found here) provides an essential eight point data protection checklist which will go some way towards helping businesses take steps to ensure compliance with the GDPR.

If you need further advice or assistance in preparing for the GDPR, do get in touch.

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House of Lords notes the complexity of Data Protection Bill

In our October bulletin (found here) we reported that the Data Protection Bill's second reading has taken place in the House of Lords.

Lord Ashton of Hyde and Baroness Williams of Trafford have responded to the points raised during the debate at the second reading. The pair published a letter that addresses 12 points, including the bill’s complexity, the rights of data subjects and assistance for data controllers; directing peers to guidance prepared by the ICO and law firms on the rights and obligations of data controllers and data subjects.

During the second reading, the Lords queried the issue of data controllers who spuriously claim that a subject access request is “manifestly unfounded or excessive”. The position clarified in the letter is that this is a high bar which the ICO will scrutinise heavily to stop controllers from preventing data subjects exercising their rights.

The letter also emphasises that there is no distinction between personal data collected before the new regime comes into force and that which is collected after; both sets should be treated in the same way and all personal data will be subject to the provisions of the new law. Controllers already have, and shall continue to have, an obligation to ensure personal data is held for a specified purpose, is up to date and is not kept for longer than is necessary for that purpose.

To read the letter, please click here.

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House of Lords propose a data ethics code of practice

Lord Stevenson of Balmacara has proposed that within six months of passing the Data Protection Bill into law, the Information Commissioner's Office (ICO) should prepare an ethics code of practice for data controllers.

He suggested that in issuing the code the ICO could set out the moral and ethical issues around data processing; and could:

  • include a duty of care from controllers and processors to data subjects, and define best practice;
  • consider, among other things, the risks and limitations of new technologies;
  • provide guidance on default privacy settings, data minimisation standards, presentation and language of terms and conditions, transparency, data sharing and accuracy; and
  • empower the ICO to impose fines for non-compliance with the code.

To read more, please click here.

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Government wants unhindered and uninterrupted flows of data between the UK and the EU post-Brexit

The UK Government has reiterated its plans to establish an agreement with the remainder of the EU Member States that will allow personal data to flow across EU borders unhindered post-Brexit.

The UK Government, in responding to the report titled "Brexit: the EU data protection package", stated that it is committed to ensuring that the UK remains a global leader on data protection after Brexit and re-iterated that the UK is seeking an enhanced mechanism that builds on what the existing model of adequacy provides for third countries.

The Government went on to confirm that it will continue to align its data protection framework with the EU to forge a strong future partnership and ensure continued law enforcement and security cooperation, recognising the importance of sharing personal data for commercial purposes and wider cooperation, including to help in the fight against crime and terrorism.

Those comments build on the contents of a 'future partnership' paper the Government published in August which called on the EU to recognise the alignment of the UK's data protection framework before the UK leaves the EU (as reported in our August bulletin here).

To read the Government's response letter please click here.

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Article 29 Working Party (WP29) sends warning to WhatsApp

The WP29 sent its first warning to WhatsApp in October 2016 outlining concerns in relation to WhatsApp's updated terms of use and privacy policy; the information provided to users at that time, and the validity of users' consent.

The WP29 has since sent a further letter to WhatsApp dated 24 October 2017 indicating its serious concerns that a satisfactory resolution to the issues raised in their first warning has not been reached. The WP29 questions the effectiveness of the new "Notice for EU users" published by WhatsApp on 16 August 2017 which is found amongst the Frequently Asked Questions on its website. Although the notice provides additional information regarding the nature and purposes of data sharing by WhatsApp with the Facebook family of companies, WP29 does not consider that it addresses the issues of WhatsApp’s non-compliance with current data protection law.

Another serious concern is that users' consent is not freely given. WhatsApp effectively adopted an approach in which users are required to signal their consent to the data sharing and, failing to do so means they are unable to avail themselves of WhatsApp's messaging service. Currently, consent must be "freely given, clear, specific, informed and unambiguous”. Under the GDPR, valid consent will be even harder to demonstrate and options offered by WhatsApp will need to be sufficiently granular to ensure consent is validly obtained. WP29 also calls on WhatsApp to provide controls allowing for consent to be easily withdrawn as required by the GDPR.

To read the Letter of the Chair of the WP29 to WhatsApp, please click here.

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Cyber Security

Uber suffered and concealed a huge data breach

This month Uber disclosed that it suffered a large scale global data breach in October 2016, in which hackers were able to download 57 million names, email addresses and mobile phone numbers including 600,000 drivers' names and licence details.

The company concealed the breach for more than a year after paying the hackers $100,000 to delete the data and keep the breach quiet. It has been reported that at least six national authorities are investigating the taxi company breach of users' and drivers' data.

From a UK and EU data protection perspective, it is worth noting that a cover-up of a cyber breach in itself is not an offence, as there is currently no statutory obligation to notify the ICO of a breach. This will of course change next year post-implementation of the GDPR, where such a breach would require notification to the relevant regulators within 72 hours of Uber becoming aware of the breach.

In terms of the gravity of the breach, and the possible fines that could be imposed, a failure to have adequate security to protect against a breach of this kind is likely to be considered a serious breach. The ICO could consider this to have been exacerbated by the failure to report this which meant that individuals who might have been affected were been unable to take steps to mitigate the effects of the hack.

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Building giant Jewson suffers cyber-attack

Builders merchant Jewson has confirmed in writing to customers that their personal data may have been stolen in a cyber break-in that occurred late this summer, informing them that names, locations, billing addresses, passwords, emails, phone numbers, payment details, card expiry dates and CVV numbers "may" have fallen into the hands of an unauthorised person.

The company has responded by taking its store offline. Up to 2000 customers who used the Jewson Direct online store between 23 August 2017 and 3 November 2017 could have been affected.

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The Paradise Papers – The world’s second largest data leak

On 5 November, the International Consortium of Investigative Journalists (ICIJ) released 13.4 million files, which are now known as the 'Paradise Papers'. The leaked files, which have come from offshore law firm Appleby Global, shine a light on the offshore world. The Paradise Papers identify those who have used law firms, trust companies and intermediaries to assist in the setting up and maintenance of offshore investment structures.

Interestingly, not many media outlets have commented on the fact that a firm’s cyber security has been compromised, and data has been leaked.

However, news like this should serve as a warning to companies, ahead of the GDPR, when there will be a requirement to notify the ICO and also consider whether to the breach should be communicated to data subjects (unless the breach is unlikely to result in a high risk to the rights and freedoms of those data subjects; the controller could show it had adequate protection in place at the time of the breach; or a disclosure to data subjects would involve disproportionate effort). Businesses should start reviewing their IT security immediately in order to assess the risks of their customer and staff information from being leaked.

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Cyber Security

Warning for employees after charity worker prosecuted for data protection offences

People working with personal information have been warned they must obey data protection laws, after a charity worker was prosecuted for making his own copies of sensitive personal data.

Robert Morrisey (RM) sent spreadsheets containing the information of vulnerable clients to his personal email address without the knowledge of his employer, the data controller.

RM sent 11 emails from his work email account earlier this year which contained the sensitive personal data of 183 people, three of whom were children. Additional investigation showed that he had done a similar exercise the year before.

RM admitted unlawfully obtaining personal data in breach of Section 55 of the Data Protection Act 1998. He was given a conditional discharge for two years and was also ordered to pay prosecution costs of £1,845.25, as well as a victim surcharge of £15.

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Verso Group data broker fined by ICO

On 2 November 2017, Verso Group (UK) limited was fined £80,000 by the ICO for a serious and deliberate contravention of the first data protection principle under the Data Protection Act 1998 to process personal data "fairly and lawfully".

Verso Group (UK) Limited are a data brokering company that supplies personal data to lead generating companies for direct marketing purposes.

An investigation by the ICO found that the company had supplied personal data for direct marketing purposes to Prodial Ltd and to EMC Advisory Services Ltd, who have both received large fines for making unsolicited nuisance calls. The company's practices spanned a number of years and the company did not ensure that the data it was supplying to third parties was provided with the individuals' consent.

To read the Monetary Penalty Notice, please click here.

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