Integrated Systems

EU on data reform

by msecadm4921

January 28 was European Data Protection Day, a joint initiative by the European Commission and the Council of Europe to raise awareness of how people’s personal information is dealt with and their rights to data protection.

On January 25, the European Commission adopted proposals for a reform of EU data protection rules to strengthen online privacy rights and boost Europe’s digital economy.

Speaking from the World Economic Forum in Davos, and ahead of the Data Protection Day, European Commission Vice-President Viviane Reding and Council of Europe Secretary General Thorbjørn Jagland said: “Hyper-connectivity should go hand-in-hand with the protection of privacy online. The protection of personal data is a fundamental right. Information technology offers huge economic and social potential, which will be fully realised if citizens trust that their personal information online is protected.”

UK response

In the UK, the watchdog the Information Commissioner (ICO) says that it welcomes the Commission’s proposal.  There is no doubt that the EU’s legal framework for data protection needs modernising in the face of increasingly sophisticated information systems, global information networks, mass information sharing, the ever growing online collection of personal data and the increasing feeling of individuals that they have lost control of their personal information.  The proposal seeks to address these needs, according to the ICO. However the ICO warns that what’s proposed is unnecessarily and unhelpfully over prescriptive. This poses challenges for its practical application and risks developing a ‘tick box’ approach to data protection compliance. The proposal also fails to properly recognise the reality of international transfers of personal data, the ICO adds.

Background

The annual Data Protection Day aims to give people the chance to understand what personal data is collected and processed about them and why, and what their rights are with respect to this processing.

The European Commission proposals to reform the EU’s 1995 data protection rules aim to strengthen online privacy rights and boost Europe’s digital economy.

Further information

Watch or download the Commission’s clip on data privacy and social networks – available in all official EU languages:
http://ec.europa.eu/avservices/video/videoplayer.cfm?ref=I072127&sitelang=en
Council of Europe: Data Protection
http://www.coe.int/dataprotection/
European Commission: Data Protection
http://ec.europa.eu/justice/data-protection/

 
As the European Commission says, the 27 EU Member States have implemented the 1995 rules differently, resulting in divergences in enforcement. A single law will do away with the current fragmentation and costly administrative burdens, leading to savings for businesses of around €2.3 billion a year, so it is claimed.  

EU Justice Commissioner Viviane Reding, the Commission’s Vice-President, said: “17 years ago less than 1 per cent of Europeans used the internet. Today, vast amounts of personal data are transferred and exchanged, across continents and around the globe in fractions of seconds. The protection of personal data is a fundamental right for all Europeans, but citizens do not always feel in full control of their personal data. My proposals will help build trust in online services because people will be better informed about their rights and in more control of their information. The reform will accomplish this while making life easier and less costly for businesses. A strong, clear and uniform legal framework at EU level will help to unleash the potential of the Digital Single Market and foster economic growth, innovation and job creation.”

The Commission’s proposals update and modernise the principles enshrined in the 1995 Data Protection Directive to guarantee privacy rights in the future. They include a policy Communication setting out the Commission’s objectives and two legislative proposals: a Regulation setting out a general EU framework for data protection and a Directive on protecting personal data processed for the purposes of prevention, detection, investigation or prosecution of criminal offences and related judicial activities.
Key changes in the reform include:
    A single set of rules on data protection, valid across the EU. Unnecessary administrative requirements, such as notification requirements for companies, will be removed. This will save businesses around €2.3 billion a year.
    Instead of the current obligation of all companies to notify all data protection activities to data protection supervisors – a requirement that has led to unnecessary paperwork and costs businesses €130 million per year, the Regulation provides for increased responsibility and accountability for those processing personal data.
    For example, companies and organisations must notify the national supervisory authority of serious data breaches as soon as possible (if feasible within 24 hours).
    Organisations will only have to deal with a single national data protection authority in the EU country where they have their main establishment. Likewise, people can refer to the data protection authority in their country, even when their data is processed by a company based outside the EU. Wherever consent is required for data to be processed, it is clarified that it has to be given explicitly, rather than assumed.
    People will have easier access to their own data and be able to transfer personal data from one service provider to another more easily (right to data portability). This will improve competition among services.
    A ‘right to be forgotten’ will help people better manage data protection risks online: people will be able to delete their data if there are no legitimate grounds for retaining it.
    EU rules must apply if personal data is handled abroad by companies that are active in the EU market and offer their services to EU citizens.
    Independent national data protection authorities will be strengthened so they can better enforce the EU rules at home. They will be empowered to fine companies that violate EU data protection rules. This can lead to penalties of up to €1 million or up to 2 per cent of the global annual turnover of a company.

    A new Directive will apply general data protection principles and rules for police and judicial cooperation in criminal matters. The rules will apply to both domestic and cross-border transfers of data.

The Commission’s proposals will now be passed on to the European Parliament and EU Member States (meeting in the Council of Ministers) for discussion. They will take effect two years after they have been adopted.

Background

Personal data is any information relating to an individual, whether it relates to his or her private, professional or public life. It can be anything from a name, a photo, an email address, bank details, your posts on social networking websites, your medical information, or your computer’s IP address. The EU Charter of Fundamental Rights says that everyone has the right to personal data protection in all aspects of life: at home, at work, whilst shopping, when receiving medical treatment, at a police station or on the Internet.
In the digital age, the collection and storage of personal information are essential. Data is used by all businesses – from insurance firms and banks to social media sites and search engines. In a globalised world, the transfer of data to third countries has become an important factor in daily life. There are no borders online and cloud computing means data may be sent from Berlin to be processed in Boston and stored in Bangalore.

On 4 November 2010, the Commission set out a strategy to strengthen EU data protection rules (IP/10/1462 and MEMO/10/542). The goals were to protect individuals’ data in all policy areas, including law enforcement, while reducing red tape for business and guaranteeing the free circulation of data within the EU. The Commission invited reactions to its ideas and also carried out a separate public consultation to revise the EU’s 1995 Data Protection Directive (95/46/EC).

EU data protection rules aim to protect the fundamental rights and freedoms of natural persons, and in particular the right to data protection, as well as the free flow of data. This general Data Protection Directive has been complemented by other legal instruments, such as the e-Privacy Directive for the communications sector. There are also specific rules for the protection of personal data in police and judicial cooperation in criminal matters (Framework Decision 2008/977/JHA).

The right to the protection of personal data is explicitly recognised by Article 8 of the EU’s Charter of Fundamental Rights and by the Lisbon Treaty. The Treaty provides a legal basis for rules on data protection for all activities within the scope of EU law under Article 16 of the Treaty on the Functioning of the European Union.

As for companies offering cloud services – remote storing and processing of data on computer servers – the trust in the EU’s coherent regulatory regime will be a key asset and attractive point for investors, it is claimed.

The Commission says that the Regulation provides for sanctions that are proportionate and dissuasive. For first offences, the national supervisory authorities may send a warning letter. For serious violations (such as processing sensitive data without an individual’s consent or on any other legal grounds) supervisory authorities shall impose penalties up to €1 million or up to 2 per cent of the global annual turnover of a company. The fines start out at €250,000 or up to 0.5pc of turnover for less serious offences (a company charges a fee for requests from a user for his data) and move up to €500,000 or up to 1pc for not supplying information to a user or for not having rectified data.

At European level, the The European Data Protection Supervisor (EDPS)  congratulated the Commission on the publication of the package for reforming the data protection rules in Europe. The Commission has presented two legislative proposals: a general Regulation on data protection and a specific Directive for the area of police and justice.

As regards the general Regulation, Peter Hustinx, EDPS, says: “The proposal for the general rules on data protection is ambitious and constitutes a huge step forward for data protection in Europe. Although there is certainly room for further improvement, we generally support the solutions proposed by the Commission. This proposal is an excellent starting point for the adoption of European rules on data protection robust enough to face the information technology-driven challenges before us.”

The EDPS supports the general Regulation on main lines, in particular for the following reasons:
    by proposing a regulation, EU citizens in all Member States can benefit from the same high level of data protection, including stronger data subjects’ rights;
    by introducing compulsory mechanisms (such as impact assessments, data protection officers and documentation on processing), data controllers in the private and in the public sectors are made more accountable for what they do;
    the independence and enforcement powers of national data protection authorities are reinforced;
    at the same time, the administrative burden will be reduced, and
    the consistent implementation of the rules within the EU will free companies from having to deal with diverging national legislative regimes and authorities.
However, the EDPS strongly regrets the inadequate content of the specific Directive on data protection in the area of police and justice. Peter Hustinx states: “The Commission has not lived up to its promises to ensure a robust system for police and justice. These are areas where the use of personal information inevitably has an enormous impact on the lives of private individuals. It is difficult to understand why the Commission has excluded this area from what it intended to do, namely proposing a comprehensive legislative framework.”
The EDPS firmly supports one specific improvement, that domestic processing is covered by the proposed Directive. However, this safeguard only has added value if the Directive substantially increases the level of data protection in this area, which the Commission itself has criticised as too low. With the current proposal, this is absolutely not the case. The EDPS regrets in particular that:
    the Commission does not propose stricter rules for the transfer of personal data outside the EU;
    data protection authorities are not given mandatory powers to effectively control the processing of personal data in this area;
    the possibilities for the police to access data processed in the private sector are not regulated.
The EDPS will analyse the two proposals in detail and will present a detailed formal opinion to the EU legislator in the coming months.
The European Data Protection Supervisor (EDPS) is an independent supervisory authority devoted to protecting personal data and privacy and promoting good practice in the EU institutions and bodies. He does so by:
    monitoring the EU administration’s processing of personal data;
    advising on policies and legislation that affect privacy;
co-operating with similar authorities to ensure consistent data protection.

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